President Muhammadu Buhari has projected a N16.45 trillion expenditure. plan for 2022
He has requested the National Assembly to review the 2022 – 2023 Medium Term Expenditure Framework and Fiscal Strategy (MTEF/FSP) to accommodate his new focus.
In the earlier plan, the government projected N13.98 trillion expenditure which the lawmakers approved.
The government will need to source for N7.91 trillion to finance the deficit.
President Buhari in a letter to Senate President Ahmad Lawan and House of Representatives Speaker Femi Gbajabiamila, read in plenary yesterday, explained that the expected increase in government expenditure was due to additional provision of N100 billion for the Independent National Electoral Commission (INEC) to conduct the 2023 general elections.
Other reasons given by the President include provision of N54 billion for National Agency for Science and Engineering Infrastructure (NASENI) from the Federal Government share of the Federation Account and additional capital provision of N1.70 trillion.
Others are additional provision of N510 billion in the service wide vote for national poverty reduction, with growth strategy (N300 billion), police operation fund (N50 billion), Hazard allowance for health workers (N50 billion), public service wage adjustment (additional N80 billion) and MDAs electricity bill debt (additional N37 billion).
In the new MTEF proposal, the aggregate fiscal deficit is expected to increase by about N692 billion or 3.42 per cent of GDP.
The President’s letter added: “Federation Account Revenue: Gross revenue projection decreased by N341,57 billion, from N8.870 trillion to N8.528 trillion.
“Deductions for federally-funded upstream project costs and 13 per cent Derivation, decreased by N335.3 billion and N810.25 million respectively.
“Net Oil and Gas revenue projection declined by N5.42 billion from N6.540 trillion to N6.535 trillion.
“FGN Retained Revenue: A projected decline in Net Oil and Gas Revenue by N5.42 billion.
“An increase in projected FGN’s Retained Revenue from N8.36 trillion to N10.13 trillion (inclusive of GOEs), largely based on: A projected increase in the revenues of Government Owned Enterprises (GOEs) by N837.76 billion.
“MDAs Internally Generated Revenue by N697.6 billion;
“The introduction of Education Tax of N306 billion and dividend of N8.3 billion from the Bank of Industry as revenue lines; and
“FGN share of oil price royalty of N96.9 billion which is expected to be transferred to the Nigerian Sovereign Investment Authority based on the provisions of the PIA.
FGN Expenditure: The FGN Aggregate Expenditure (including GOEs and Project-tied Loans) is projected to increase by N2.47 trillion, from N13.98 trillion to N16.45 trillion.
The President added in the letter: “The revision was necessitated by the need to reflect the new fiscal terms in the Petroleum Industry Act (PIA) 2021, as well as other critical expenditures in the 2022 Budget.
The underlying drivers of the 2022 fiscal projections, such as oil price benchmark, oil production volume, exchange rate, GDP growth, and inflation rate reflect emergent realities and the macroeconomic outlook, and remain unchanged as in the previously approved 2022-24 MTEF&FSP.
“The PIA establishes a progressive fiscal framework aimed at encouraging investment in the Nigerian petroleum industry. This significantly alters the Oil and Gas fiscal terms and has necessitated changes in the 2022-2024 Medium Term Fiscal Framework.
“The fiscal effects of PIA implementation are assumed to kick in by mid-year 2022. The revised 2022-24 Fiscal Framework is the premised on hybrid of January-June (based on current fiscal regime) and July-December (based on PIA fiscal regime), while 2023 and 2024 are now fully based on the PIA.
“Arising from this, and other critical expenditures that should be accommodated in the 2022 Budget, the changes to the 2022 projections In the Fiscal Framework are as follows:
“Gross revenue projection decreased by N341.87 billion, from N8.870 trillion to N8.528 trillion, Deductions for Federally-funded upstream project costs and 13% Derivation, decreased by N335.3 billion and N810.25 million respectively, a net Oil and Gas revenue projection declined by N5.42 billion from N6.640 trillion to N6.535 trillion,
“A projected decline in Net Oil and Gas Revenue by N5.42 billion; an increase in projected FGN’s Retained Revenue from N8.36 trillion to N10.13 trillion (inclusive of GOEs), largely based on a projected increase in the revenues of Government Owned Enterprises (GOEs) by N837.76 billion, MDAs Internally Generated Revenue by N697.6 billion”.
It also includes the introduction of Education Tax of N306 billion and Dividend of N8.3 billion from the Bank of Industry as revenue lines; and FGN share of oil price royalty of N96.9 billion which is expected to be transferred to the Nigerian Sovereign Investment Authority based on the provisions of the PIA.”
On government expenditure, he said “the FGN Aggregate Expenditure (including GOEs and Project-tied Loans) is projected to increase by N2.47 trillion, from N13.98 trillion to N16.45 trillion.
It also include “Hazard Allowance for Health workers (N50 billion), Public Service Wage Adjustments (additional N80 billion), and MDAs’ Electricity Bills Debt (additional N37 billion), additional Capital provision of N1.70 trillion, attributed to projected increases in Capital Supplementation by N179.1 billion, GOEs Capital by N222.1 billion; TETFUND Expenditure by N290.7 billion; Multilateral/ Bilateral Project-tied Loans by N517.5 billon, and MDAs’ Capital Expenditure by N390.5 billon (including N178.1 billion provision for population and housing census to be carried out in 2022.
“The Aggregate Deficit (inclusive of GOEs and Project-tied Loans) is projected to increase by N692.0 billion or to 3.42% of GDP from 3.05% of GDP.
Speaker Femi Gbajabiamila refused to allow members debate the President’s letter, ruling all those who sought for the letter to be debated out of order.
He said “both you Ndudi (Elumelu) and Hon Ossai refered to Order 12 Rule 19 and you refered to paragraph 4. The said Order 12 Rule 19 is talking about the budget. The MTEF is not the budget. We are not discussing the appropriation bill today. You are referring to an order that deals with the appropriation bill. We don’t have the appropration bill before us. You are ruled out of order”.
Rrp. Ossai Nicholas Ossai had raised a point of order saying the MTEF is a money bill which should pass through all stages including the first and second reading, at which point it must be subjected to debated before being sent to the committee.
But Gbajabiamila responded, “I believe we have passed the stage of the MTEF. What has been brought is an amendment. The MTEF debate is supposed to be on the general principles of the bill which has already been debated. They have not changed.
“I don’t know what you what to debate again if it remains unchanged.It is an exercise in futility. I did say to the committee that they should thoroughly look at it and when they bring it if you find anything there different, we can bring it up then. You are ruled out of order”
“For us to approve that MTEF as amended being sought by Mr President, it now becomes imperative that we look at those ingredients he is asking to amend and of course be able to interact with our constituents who sent us to this floor to represent their interest whether such input meet their requirement.”
(The Nation)