Extra allocation to INEC, others see Buhari raise 2022 budget
...raises revenue projection by 21% to N10.13trn
Nigerian President Muhammadu Buhari has written to lawmakers seeking a 17.67 percent increase of the Federal Government’s projected expenditure in 2022 to N16.45 trillion from N13.98 trillion.
The projected increase in expenditure equates to N2.47 trillion additional spending, which Buhari said was partly due to the N100 billion extra provision to the Independent National Electoral Commission (INEC) to cater for 2023 General Elections.
President Buhari made the demand in a submission of the Revised 2022-2024 Medium Term Fiscal Framework (MTFF), accompanied by a letter read by Speaker of the House of Representatives, Femi Gbajabiamila at plenary on Tuesday.
The increase in expenditure was accompanied by a 21 percent rise in projected revenues to N10.13 trillion. Analysts had said the initial revenue projection of N8.36 trillion was over ambitious based on previous revenue trend where Nigeria has only managed about 50 percent of budgeted revenues.
The increase in projected revenues leaves the door open to an even higher than planned fiscal deficit despite Buhari’s projection that the deficit will increase by N692.0 billion, representing 3.42% of GDP from 3.05% of GDP in the initial fiscal deficit estimate of N5.62 trillion.
According to the President, the increase in expenditure is also due to the provision of N54 billion to the National Agency for Science and Engineering Infrastructure NASENI, which represents 1% Federal Government Share of Federation Account.
The letter identified other reasons for the increase as: “additional provision of N510 billion in the Service Wide Votes to cater for National Poverty Reduction with Growth Strategy (N300 billion), Police Operations Fund (N50 billion), Hazard Allowance for Health Workers (N50 billion), Public Service Wage Adjustments (additional N80 billion), and MDAs’ Electricity Bills Debt (additional N37 billion)”.
The rise is also due to 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 billion; and, MDAs Capital Expenditure by N390.5 billion (including N178.1 billion provision for population and housing census to be carried out in 2022)”.
Buhari stated that it was necessary to revise the MTEF to reflect the new fiscal terms in the recently signed Petroleum Industry Act (PIA) 2021, as well as other critical expenditures in the 2022 Budget.
He however indicated that 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 changes to the 2022 projections in the Fiscal Framework demanded by the President include; 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% derivation, decreased by N335.3 billion and N810.25 million respectively and net Oil and Gas revenue projection declined by N5.42 billion from N6.540 trillion to N6.535 trillion.
Other proposed amendments include; 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).
This is largely based on:”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 N969 billion which is expected to be transferred to the Nigerian Sovereign Investment Authority based on the provisions of the PIA”.