2022 Budget: Senate approves N13.98trn MTEF/FSP projections

The Senate Wednesday approved the N13.98trillion 2022 budget proposal as contained in the 2022 – 2024 Medium Term Expenditure Framework ( MTEF) and Fiscal Strategy Paper (FSP), forwarded to it for consideration by President Muhammadu Buhari in July this year .

Projected N5.62trillion budget deficit and N4.89trillion new borrowings , were however kicked against by some Senators during general debate on report submitted on the proposals by joint Committees mandated by the Senate to work on the parameters and projections .

The joint committees led by the Committee on Finance in the report submitted to the Senate , recommended approval of all the projections and parameters proposed for the 2022 budget by the executive in the documents.

The Joint Committee report was presented by Senator Solomon Olamilekan Adeola (APC, Lagos West), who chairs the Finance Committee.

Approved by the Senate as recommended by the committee , are the projected N13.98trillion total expenditure profile for the federal government in 2022, proposed revenue of N8.36trillion , fiscal deficit of N5.62trillion , new borrowings of N4.89trillion and debt service estimate of N3.12trillion.

Others are proposed recurrent expenditure component of N6.21trillion , capital component of N3.47trillion and statutory transfers totalling N613.4billion.

Also approved were parameters upon which the budgetary proposals were based which are $57 per barrel oil price benchmark , 1.88million barrel oil production per day , N410.15 to US dollar exchange rate , 4.20% projected GDP growth rate and inflation rate of 13.00% .

As stated in the report , the N5.62 trillion deficit budgeting , was sustained by the Senate due to the Federal Government’s conservative approach to target setting and its determination to improve collection efficiency of major revenue generating agencies.

It further called on the Salaries and Wages Commission to review the salary structure of all Ministries, Departments and Agencies (MDAs), in other to come up with a new salary structure that will reflect the true financial position of the Agencies.

The chamber also demanded a continuous review of the Fiscal Responsibility Act to ensure that all revenues are remitted to the Consolidated Revenue Fund (CRF) as at when due, in order to curtail frivolous deductions and diversion of funds by the MDAs.

It further maintained that all laws relating to mining businesses be reviewed as a matter of urgency, to ensure upward review of rates applied to royalties, ground rent and licenses renewal of all mining companies operating in Nigeria to ensure transparency in the collection of revenue by relevant agencies, as well as recommend stringent sanctions in proposed new laws to address illegal mining.

The Senate amid its recommendations also called on the Nigeria Customs Service to accelerate the process of installing scanners at all ports across the country to curb the issues of smuggling and underpayment of custom duties on imported goods which has resulted in huge loss of revenue to the government.

It also charged the Federal Government to urgently implement the Petroleum Industry Act recently assented to by the President in order to curtail the problems of smuggling and round-tripping of petroleum products imported into the country.

In addition, the chamber recommended that the proposed budget of Government Owned Enterprises (GOEs) be reviewed upward to show the reflection of their capabilities to generate more revenue as a result of the findings of the Joint Committee.

Consequently, it further recommended that the offices of the Accountant General (AGF), Auditor General of the Federation (AuGF) and Fiscal Responsibility Commission be strengthened in the area of staffing and proper funding of its activities to ensure optimal performance of their duties in order to adequately monitor the remittances of all government revenue.

The chamber posited that the Act establishing some MDAs such as – Nigeria Investment Promotion Council (NIPC), National Lottery Trust Fund Act, Bank of Industry Act, Bank of Agriculture Act, Energy Commission Act and Nigeria Nuclear Regulatory Commission – if reviewed and amended as a matter of urgency, would assist to generate more revenue to the coffers of government.

It also recommended that the Federal Government budget be reviewed and purged of some agencies with demonstrated capacity to stand on their own without any recourse to Federal Government of Nigeria budget.

The chamber gave example of such agencies to include the National Agency for Food and Drug Administration and Control (NAFDAC) and Nigerian College of Aviation Technology, Zaria.

During general debate on the report , Senators Gabriel Suswam ( PDP Benue North East ) , Adamu Aliero ( APC Kebbi Central ) , James Manager ( PDP Delta South) etc , kicked against the increasing figures of deficit budgeting and new borrowings on yearly basis .

But the President of the Senate , Ahmad Lawan , in his remarks said the country did not make hey when the sun shine which according to him, led us to where we are today as far as borrowings are concerned .

“I agree that we need to reduce borrowings but we need to borrow at this time for the required massive infrastructural development “, he said .

He however called on stringent oversight functions by the standing committees of the Senate on internal revenue generation for funding of the 2022 budget.