Buhari presents N16.39 trillion budget for 2022

President Muhammadu Buhari has presented a total budget of N16.39 trillion for the year 2022 to the National Assembly.

According to him, the N16.39 trillion naira budget comprises Statutory Transfers of 768.28 billion Naira; Non-debt Recurrent Costs of 6.83 trillion; Personnel Costs of 4.11 trillion Naira; Pensions, Gratuities and Retirees’ Benefits 577.0 billion Naira; Overheads of 792.39 billion Naira;  Capital Expenditure of 5.35 trillion Naira, including the capital component of Statutory Transfers; Debt Service of 3.61 trillion Naira;  and Sinking Fund of 292.71 billion Naira to retire certain maturing bonds.

The Senate President, Ahmed Lawan, said the National Assembly is committed to passing the budget before the end of the year.

Speaking at the assembly chambers, the President tagged the appropriation bill “a Budget of Economic Growth and Sustainability.”

He said the budget will focus on diversifying the economy, with robust MSME growth; investing in critical infrastructure; strengthening security and ensuring good governance; enabling a vibrant, educated and healthy populace; reducing poverty; and minimizing regional, economic and social disparities.

“Defence and internal security will continue to be our top priority,” the President said. “We remain firmly committed to the security of life, property and investment nationwide.

“We will continue to ensure that our gallant men and women in the armed forces, police and paramilitary units are properly equipped, remunerated and well-motivated.”

He also noted that the 2022 budget is the first time in Nigerian history, “where MDAs were clearly advised on gender-responsive budgeting.

“These are part of critical steps in our efforts to distribute resources fairly and reach vulnerable groups of our society,” he said.

Buhari added that the 2021 budget performance has seen actual revenues go 34% below target as of July 2021, due to the under-performance of oil and gas revenue sources, citing that the Federal Government’s retained revenues (excluding Government Owned Enterprises) amounted to 2.61 trillion Naira against the proportionate target of 3.95

“The 2022 Budget will be the last full-year budget to be implemented by this administration. We designed it to build on the achievements of previous budgets and to deliver on our goals and aspirations as will be reflected in our soon-to-be-launched National Development Plan of 2021 to 2025,” the President said.

On the 2021 budget performance, Buhari added that based on the 2021 Fiscal Framework, total revenue of 8.12 trillion naira was projected to fund aggregate federal expenditure of 14.57 trillion naira (inclusive of the supplementary budget). The projected fiscal deficit of 6.45 trillion Naira, or 4.52 per cent of GDP, is expected to be financed mainly by domestic and external borrowings.

“By July 2021, Nigeria’s daily oil production averaged 1.70 million barrels (inclusive of condensates) and the market price of Bonny Light crude averaged 68.53 US Dollars per barrel.

“Accordingly, actual revenues were 34 per cent below target as of July 2021, mainly due to the underperformance of oil and gas revenue sources. Federal Government’s retained revenues (excluding Government Owned Enterprises) amounted to 2.61 trillion Naira against the proportionate target of 3.95 trillion Naira for the period.

“The Federal Government’s share of Oil revenue totalled 570.23 billion naira as of July 2021, which was 51 per cent below target, while non-oil tax revenues totalled 964.13 billion naira. The poor performance of oil revenue relative to the budget was largely due to the shortfall in production as well as significant cost recovery by NNPC to cover the shortfall between its cost of importing petrol and the pump price.

“On the expenditure side, as at end of July 2021, a total of 6.79 trillion naira had been spent as against the pro-rated expenditure of 7.91 trillion naira. Accordingly, a deficit of 4.17 trillion naira was recorded as at end of July 2021. The deficit was financed through domestic borrowing,” Buhari said.

The President disclosed that the priorities of the 2022 budget would be diversifying the economy, with robust MSME growth; investing in critical infrastructure; strengthening security and ensuring good governance; enabling a vibrant, educated, and healthy populace; reducing poverty; and minimizing regional, economic and social disparities.

The parameters for the 2022 Budget are Conservative oil price benchmark of 57 US Dollars per barrel; Daily oil production estimate of 1.88 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day); Exchange rate of four 410.15 per US Dollar; and Projected GDP growth rate of 4.2 per cent and 13 per cent inflation rate.

Revenue estimates

Based on these fiscal assumptions and parameters, total federally-collectable revenue is estimated at 17.70 trillion naira in 2022,” Buhari said.

Total federally distributable revenue is estimated at 12.72 trillion naira in 2022 while total revenue available to fund the 2022 Federal Budget is estimated at 10.13 trillion naira. This includes Grants and Aid of 63.38 billion naira, as well as the revenues of 63 Government-Owned Enterprises. Oil revenue is projected at 3.16 trillion, non-oil taxes are estimated at 2.13 trillion naira and FGN Independent revenues are projected to be 1.82 trillion naira.