The Federal Executive Council (FEC) on Wednesday approved the 2022-2024 medium term expenditure framework and the fiscal strategy paper (MTEF/FSP) as required by the Fiscal Responsibility Act, with projected revenue of N6.54 trillion for the 2022 fiscal year.
Minister of finance, budget and national planning, Zainab Ahmed, who announced this while briefing State House correspondents, after the weekly virtual meeting of the council, said the revenue was projected to increase in 2023 to N9.15 trillion.
“We have presented to the Federal Government the projected revenues for 2022 to 2024. Specifically for 2022, the revenue that we expect is N6.54 trillion N2.62 trillion to accrue to the Federation Account and VAT respectively.”
Under the paper which was approved by the council, a net oil and gas revenue which will be available for the Federation Account for distribution will be N6.151 trillion in 2022.
The key macro-economic assumptions contained in the MTEF/FSP include a crude oil benchmark price of $57 per barrel for 2022, crude oil production of 1.88 million barrels per day, and a dollar exchange rate of N410.15 to one US dollar, an inflation rate of 13 percent in 2022, and a nominal GDP of 149.369 trillion.
“What is interesting is that the non-oil GDP continues to grow at 169.69 trillion compared to oil GDP of 14.68 trillion included in the nominal GDP. Nominal consumption is 130,49.36 billion.
The MTEF/FSP describes the Federal Government’s socio-economic and developmental objectives and priorities for the reporting period of 2022 to 2024.
It also has the fiscal strategies to put in place and policies to achieve government economic priorities, including highlights of the key drivers of government’s revenue and the spending plans.
“The goal for us is to improve the nation’s macro-economic situation and reposition the economy on the path of inclusive diversified as well as sustainable growth.
The MTEF/FSP also consists of medium-term macro-economic projections, fiscal targets and estimates of revenue and expenditure including government’s financial obligations.
“We provided to council, the macro-economic background base, which were presented to council on Wednesday,” said the minister.
Other Key information shows that Nigeria’s economy recovered from a negative growth of -1.8 percent in 2020, to 2.5 percent in 2021, with a projected increase to 4.2 percent in 2022.
The report also revealed that inflation has moderated from the two-month high, coming down to 17.93 percent.
The minister also announced a foreign reserve of $34.2 billion at the end of May, a $640 million declined from the previous month.
On the 2022 expenditures, Ahmed announced that the 2022 budget would be 3 percent higher than the 2021 budget in terms of the size of expenditure.
“The total expenditure that we have projected and approved by Council is an aggregate expenditure of N13.98 trillion. This includes N1.1 trillion of government-owned enterprises expenditure as well as grants and donor-funded projects in the sum of N62.24 billion.
“This means that this budget is just 3 percent higher than the 2021 budget in terms of the size of expenditure.
“We also reported to council the budget deficit and the financing items for the expenditure. The budget deficit that is projected for 2022 is N5.62 trillion, up from N5.60 trillion in 2022.
“This amount represents 3.05 percent of the estimated GDP, which is slightly above the 3 percent threshold that is spent suffered in the Fiscal Responsibility Act. The FRA and empowers Mr. President to exceed the threshold if, in his opinion, the nation faces national security threats. And it is our opinion and FEC agreed that we can exceed it.
“The deficit is going to be financed by new foreign borrowing. And domestic borrowing, both domestic and foreign in the sum of N4.89 trillion on privatisation proceeds of N90.73 billion and drawdowns from existing project titles of N635 billion.
“I just want to state that the projected debt to revenue ratio in the report is 43 percent which, of course, we know Nigerians all have concerns about. The actual debt to revenue ratio in 2019 was 58 percent. So this is an improvement over 2019. In 2020, the ratio was up to 85 percent.”
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