The Senate on Wednesday approved President Muhammadu Buhari’s revised 2022-2024 Medium Term Expenditure Framework (MTEF).
The Upper Chamber had on Tuesday referred the revised MTEF to its Committee on Finance for consideration ahead of the expected Appropriated Bill 2022 presentation by President Muhammadu Buhari on Thursday (October 7) to the joint session of National Assembly.
The approval of the revised framework followed the consideration of a report by the Committee on Finance.
The Chairman of the Committee, Senator Olamilekan Adeola, in his presentation, said that Gross Revenue Projection was reduced by N341.57 billion, from N8.870 trillion to N8.528 trillion just as
deductions for federally-funded upstream projects’ costs and 13 percent derivation were also slashed by N335.3 billion and N810.25 million, respectively.
The lawmaker explained that 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.
According to him, the Federal Government’s retained revenue is projected to increase by N1.773 trillion, from N8.36 trillion to N10.13 trillion.
The chairman told the lamakers that the new increase to the FGN Expenditure stood N5.241 trillion.
A statement issued by the Special Assistant on Media to President of the Senate, Ezrel Tabiowo, the Senate after considering the recommendations of the committee approved the aggregate expenditure of N16.39 trillion from the previous N13.98 trillion for the year 2022 as well as retained revenue of N10.3 trillion; and N635.4 billion fiscal deficit.
The upper chamber also commended the Budget Office of the Federation and the Federal Ministry of Finance, Budget and National Planning for insisting that MDAs submit their revenue profile as premise for being captured in the 2022 budget proposal.
President Buhari had in his letter to the upper chamber dated October 4, 2021, stated that the revision of the MTEF 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.
He explained that the underlying drivers of the 2022 fiscal projections, such as oil price benchmark, oil production volume, exchange rate, GDP growth, and inflation rate reflected emergent realities and the macroeconomic outlook, and remained unchanged as in the previously approved 2022-2024 MTEF/FSP.
He wrote: “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”, the President added
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 percent 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.
On the projected increase in Federal Government’s revenue, the President 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 FGN 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.
Buhari further clarified that the FGN Aggregate Expenditure (including GOEs and Projected-tied Loans) was increased by N2.47 trillion, from N13.98 trillion to N16.45 trillion.
This is even as he hinged the increase in expenditure to N100 billion additional provision to INEC, to cater for the 2023 General Elections; and the provision of N54 billion to NASENI, which represents 1 percent FGN share of Federation Account.
Others items covered in the MTEF include a 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 (50 billion), Public Service Wage Adjustments (additional N80 billion), and MDAs’ Electricity Bills Debt (additional N37 billion); and additional Capital provision of N1.70 trillion.
Buhari pointed out 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.
