President Muhammadu Buhari on Thursday formally laid the N16.39 trillion budget expenditure for 2022 fiscal year tagged: ‘Budget of Economic Growth and Sustainability’ before the joint session of the National Assembly.

The N16.39 trillion budget estimates which was predicated on the key parameters and fiscal assumptions encapsulated in the 2022 – 2024 Medium Term Expenditure Framework and Fiscal Strategy Paper passed by the National Assembly, include total federally-collectible revenue estimated at N17.70 trillion.

These include: conservative oil price benchmark of $57 per barrel; 1.88mbpd oil production (inclusive of Condensates of 300,000 to 400,000 barrels per day); N410.15/$ exchange rate; 4.2 percent projected GDP growth rate and 13 percent inflation rate.

According to him, the total federally distributable revenue was estimated at N12.72 trillion while total revenue available to fund the 2022 federal budget is estimated at N10.13 trillion. This includes Grants and Aid of N63.38 billion, as well as the revenues of 63 Government-Owned Enterprises.

The oil revenue is projected at N3.16 trillion, Non-oil taxes are estimated at N2.13 trillion and FGN Independent revenues are projected to be N1.82 trillion.

The proposed expenditure for 2022 fiscal year comprises N768.28 billion as Statutory Transfers; N6.83 trillion Non-debt Recurrent Costs; N4.11 trillion as Personnel Costs; N577 billion for Pensions, Gratuities and Retirees’ Benefits; N792.39 billion for Overheads; N5.35 trillion for Capital Expenditure including the capital component of Statutory Transfers; N3.61 trillion for Debt Service and N292.71 billion for Sinking Fund to retire certain maturing bonds.

In his address, President Buhari assured that the administration will prioritize defence and internal security, while continuing to ensure that our gallant men and women in the armed forces, police and paramilitary units are properly equipped, remunerated and well-motivated as well as distribute resources fairly and reach vulnerable groups of our society.

On the 2022 fiscal balance, Federal Government projected N6.26 trillion representing 3.39 percent of estimated GDP, slightly above the 3 percent threshold set by the Fiscal Responsibility Act 2007.

According to him, Federal Government planned to “finance the deficit mainly by new borrowings totalling N5.01 trillion, N90.73 billion from Privatization Proceeds and N1.16 trillion drawdowns on loans secured for specific development projects.”

Mr President also unveiled the administration’s plan to review the policy effectiveness of tax waivers and concessions; boost customs revenue through the e-Customs and Single Window initiatives; and safeguard revenues from the oil and gas sector.

While acknowledging that Nigeria has witnessed two economic recessions within the period of this Administration, he argued that the country “had to spend our way out of recession, which necessitated a resort to growing the public debt. It is unlikely that our recovery from each of the two recessions would have grown as fast without the sustained government expenditure funded by debt.”

He assured that the loans will be used to finance critical development projects and programmes aimed at improving our economic environment and ensuring effective delivery of public services to our people, including: completion of major road and rail projects; effective implementation of Power sector projects; provision of potable water; construction of irrigation infrastructure and dams across the country; and critical health projects such as the strengthening of national emergency medical services and ambulance system, procurement of vaccines, polio eradication and upgrading Primary Health Care Centres across the six geopolitical zones.

He also expressed Federal Government’s medium-term plan to grow our Revenue-to-GDP ratio from about 8 percent currently to 15 percent by 2025, adding that at that level of revenues, the Debt-Service-to-Revenue ratio will cease to be worrying.
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