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N’ Assembly Passes Revised 2022-2024 Fiscal Framework
- Okays N16.39trn budget proposal for 2022
- Buhari to present appropriation bill Thursday
By Deji Elumoye, Udora Orizu and Juliet Akoje
The two chambers of the National Assembly Wednesday approved President Muhammadu Buhari’s revised proposal of the 2022-2024 Medium Term Expenditure Framework (MTEF-FSP), which also okayed N16.39 trillion federal budget proposal for 2022.
This is just as the president’s request letter to present the 2022 Appropriation Bill to the federal legislators at a joint sitting on Thursday was read at both chambers by the presiding officers during Wednesday’s plenary.
President Buhari had on Tuesday sought the lawmakers’ approval to increase the 2022 budget estimate from N13.98 trillion to N16.45 trillion.
The revised framework was received and referred to both chambers’ Committee on Finance for expeditious consideration ahead of Thursday’s budget presentation to the National Assembly.
Consequently, the approval of the revised framework on Wednesday followed the consideration and adoption of a report by both chambers’ Committee on Finance, chaired by Senator Olamilekan Adeola and Hon. James Faleke respectively.
Both chambers, in their recommendation, approved the aggregate expenditure of N16.39 trillion from the previous N13.98 trillion for the year 2022.
They also gave their approval to the retained revenue of N10.3 trillion; and N635.4 billion fiscal deficit.
The upper and lower chambers also commended the Budget Office of the Federation and the Federal Ministry of Finance, Budget and National Planning for insisting that ministries, departments and agencies (MDAs) submit their revenue profile as premise for being captured in the 2022 budget proposal.
In his presentation, the Chairman, Senate Committee on Finance, Senator Adeola, disclosed that the new increase to the federal government expenditure is N5.241 trillion.
He said: “That Gross Revenue Projection was decreased by N341.57 billion, from N8.870 trillion to N8.528 trillion. Deductions for federally-funded upstream projects costs and 13 per cent derivation was slashed by N335.3 billion and N810.25 million, respectively. While Net Oil and Gas revenue projection declined by N5.42 billion from N6.540 trillion to N6.535 trillion, non-oil taxes remain unchanged. The federal government’s retained revenue is projected to increase by N1.773 trillion, from N8.36 trillion to N10.13 trillion.”
On his part, the Chairman, House Committee on Finance, Hon. Faleke, said: “That the aggregate expenditure of N16. 39 trillion be approved. That the retained revenue of N10.3 trillion be approved. That the Fiscal Deficit of N635.4 billion be approved. That the Budget Office of the Federation and the Federal Ministry of Finance, Budget and National Planning be commended for insisting that ministries departments and agencies (MDAs) submit their revenue profile as premise for being captured in the 2022 budget proposal.”
President Buhari had, in the request letter to the National Assembly dated October 4, 2021, explained that the revision was necessitated by the need to reflect the new fiscal terms in the Petroleum Industry Act, 2021, as well as other critical expenditures in the 2022 budget.
According to him, 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 2022-2024 MTEF/FSP.
“The PIA established 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 2022-2024 Fiscal Framework is 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,” he said.
Accordingly, President Buhari listed the changes to the 2022 Fiscal Framework projections and approved by the Senate to include Gross Revenue projection decreased by N341.57 billion, from N8.870 trillion to N8.528 trillion; decreased deductions for federally funded upstream projects costs and 13 per cent derivation 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.
Giving a breakdown of the projected increase in federal government’s revenue, he said N837.76 billion was from increase in revenue of government owned enterprises; N697.6 billion from MDAs internally generated revenue; the introduction of Education Tax of N306 billion and dividend of N8.3 billion from the Bank of Industry as revenue lines; and federal government share of oil price royalty of N96.9 billion which is expected to be transferred to the Nigerian Sovereignty Investment Authority based on the provisions of the PIA.
He added that the federal government Aggregate Expenditure (including GOEs and Projected-tied Loans) was increased by N2.47 trillion, from N13.98 trillion to N16.45 trillion.
Buhari noted that the increase in expenditure was due to N100 billion additional provision to the Independent National Electoral Commission (INEC), to cater for the 2023 general election; and the provision of N54 billion to NASENI, which represents 1 per cent federal government share of Federation Account.
Others are 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); and additional capital provision of N1.70 trillion.
He explained that the provision for additional capital in the framework was as a result of projected increases in Capital Supplementation by N179.1 billion; GOEs Capital by N222.1 billion; TETFUND Expenditure by N290.7 billion; Multi-lateral/Bi-lateral 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.
Meanwhile, President Buhari has written formally to the two chambers of the National Assembly seeking permission to present the 2022 Appropriation Bill on Thursday.
The joint session is to be co-chaired by the Senate President, Dr Ahmad Lawan, and the Speaker of the House of Representatives, Hon. Femi Gbajabiamila, in their position as Chairman and Vice-Chairman of the National Assembly respectively.
President Buhari, in a letter dated October 4, 2021, read by the Senate President, Lawan, and the House Speaker, Gbajabiamila, solicited for the permission of the leadership of the National Assembly to lay the 2022 budget estimates before the parliament.
The president’s letter read: “May I crave the kind indulgence of the Distinguished Senate/House to grant me the slot of 12:00 Hours on Thursday, 7th October, 2021, to formally present the 2022 Appropriation Bill to the Joint Session of the National Assembly.
“Please, Accept, Distinguished Senate President/Speaker of House of Representatives the assurances of my highest regards, as I look forward to addressing the Joint Session.”
In response to the president’s request, both chambers in pursuant to Order 21 Rule 8(1) and (2) of the Standing Orders, resolved to admit the president and his entourage to address a joint sitting of the National Assembly on Thursday, 7 October 2021 at 12noon, for the purpose of presenting the 2022 budget estimates.
In line with the parliamentary tradition, the senators and members of the House of Representatives will converge at the House of Representatives chamber by 11.45am ahead of President Buhari’s budget presentation by noon on Thursday.
