Senate Approves N13.98trn 2022 Budget Projection


Ahead of the presentation of the 2022 appropriation bill to the National Assembly by President Muhammadu Buhari, the Senate yesterday passed the 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).

The passage of the 2022-2024 MTEF/FSP followed the consideration and exhaustive deliberation of a report by the joint committee on Finance, Local and Foreign Debts, Banking, Insurance and other Financial Institutions, Petroleum Resources (Upstream), Downstream Petroleum Sector and Gas.

The report of the joint committee was presented by chairman of the Finance committee, Senator Solomon Olamilekan Adeola (APC, Lagos West).

The upper chamber, during consideration of the report, gave its nod to the federal government’s revenue projection of N8.36 trillion and proposed expenditure of N13.98 trillion.

Accordingly, it also approved the daily crude oil production of 1.88mbpd, 2.23mbpd, and 2.22mbpd for 2022, 2023 and 2024, particularly “in view of average 1.93mbpd over the last 3 years and the fact that a very conservative oil output benchmark has been adopted for the medium term in order to ensure greater budget realism”.

The Senate, in its recommendations, approved a benchmark oil price of USD$57 per barrel, adopted the exchange rate of N410.15/US$ by the executive arm of government for 2022-2024, and gave its nod to the projected Gross Domestic Product (GDP) growth rate of 4.20%, as well as 13% inflation rate.

In addition, the chamber approved a fiscal deficit of N5.62 trillion, new borrowings of N4.89 trillion – an amount which includes foreign and domestic borrowing – subject to the provision of details of the borrowing plan to the National Assembly.

The Senate also approved other parameters such as statutory transfers totaling N613.4 billion, debt service estimate of N3.12 trillion; sinking fund to the tune of N292 billion; pension, gratuities and retirees benefits of N567 billion.

Out of the aggregate federal government’s expenditure of N13.98 trillion, the upper chamber approved the sum of N6.12 trillion for Total Recurrent (non-debt); N3.47 trillion as Personnel Cost for Ministries, Departments and Agencies (MDAs); N3.26 trillion for Capital Expenditure (exclusive transfers); N350 billion Special Intervention (recurrent); and N10 billion for Special Intervention (capital).

The Red Chamber recommended that the fiscal deficit estimate of N5.62 trillion should also be sustained 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 order to come up with a new salary structure that will reflect the true financial position of the agencies.

The Senate also demanded a continuous review of the Fiscal Responsibility Act to ensure that all revenues are remitted to the Consolidated Revenue Fund (CRF) as and when due in order to curtail frivolous deductions and diversion of funds by 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 imposing stringent sanctions in proposed new laws to address illegal mining.

The Senate also called on the Nigeria Customs Service to accelerate the process of installing scanners at all ports across the country to curb 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 upper 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.

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 to enable them 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 the federal government’s budget.

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

Lawan Refers EFCC, New Petroleum Agencies Board Nominees To Committees For Screening

Meanwhile, president of the Senate, Ahmad Lawan, has forwarded President Muhammadu Buhari’s nominees for the board of the Economic and Financial Crimes Commission (EFCC) to the committee on Anti-Corruption and Financial Crimes for screening.

Also forwarded were the names of appointees for the newly established boards of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NPRA) and Upstream Regulatory Commission (URC) to the committees on Petroleum (Downstream) and (Upstream), respectively.

The nominees were referred to the relevant committees for legislative action during the start of yesterday’s plenary proceedings, following the receipt of three separate requests from the president to that effect.

The upper chamber had on Tuesday received a request from President Buhari to confirm the nominees as members of the board of the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

The president in another letter to the upper chamber also sought the confirmation of the board of the Upstream Regulatory Commission.

He explained in the letter dated September 16, 2021, that the request to confirm the chairman, chief executive and executive directors for the Nigerian Midstream and Downstream Petroleum Regulatory Authority was made in accordance with the provision of Section 34(3) of the Petroleum Industry Act 2021.

The nominees for confirmation into the Nigerian Petroleum Regulatory Board are Idaere Gogo Ogan (Chairman); Engr. Sarki Auwalu (Chief Executive); Abiodun A. Adeniji (Executive Director, Finance and Accounts); and Ogbugo Ukoha (Executive Director, Distributions Systems, Storage and Retail Infrastructure).

In a separate letter dated September 16, 2021, President Buhari relied on the provision of Section 11(3) of the Petroleum Industry Act 2021 to request the Senate to confirm the appointment of four nominees as chairman, chief executive and executive commissioners to the board of the Upstream Regulatory Commission.

The nominees for screening and confirmation are Isa Ibrahim Modibo (Chairman); Engr. Gbenga Komolafe (Chief Executive); Hassan Gambo (Executive Commissioner, Finance and Accounts); and Ms Rose Ndong (Executive Commissioner, Exploration and Acreage Management).

Buhari in a third request contained in a letter dated September 17, 2021, sought the confirmation of the secretary and board members EFCC.

He explained that the request for the confirmation of the nominees was in accordance with the provision of section 2(1) of the Economic and Financial Crimes Commission (Establishment) Act, 2004.

Those to be screened by the Anti-Corruption and Financial Crimes Committee include George Abbah Ekpungu, Secretary (Cross River); Luqman Muhammed (Edo); Anumba Adaeze (Enugu); Alhaji Kola Raheem Adesina (Kwara); and Alhaji Yahaya Muhammad (Yobe).