The Federal Executive Council (FEC) announced the approval of the 2022 Appropriation Bill for an aggregate expenditure of N16.39 trillion, with an oil benchmark target of $57 per barrel, oil production pegged at 1.88 billion barrels per day and an exchange rate of N410.15 to a dollar. President Buhari is expected to present the budget to the National assembly on Thursday.
The was announced by the Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, in a meeting with State House correspondents on the outcome of the Council meeting, presided over by President Muhammadu Buhari, on Wednesday in Abuja, citing that the FG will continue borrowing to fund infrastructure.
The Minister said the FG’s expenditures, including salaries and other overheads, is barely covered or swallowed up by the revenue, justifying the need to borrow.
What she said
“If we just depend on the revenues that we get, even though our revenues have increased, the operational expenditure of government, including salaries and other overheads, is barely covered or swallowed up by the revenue.
“So, we need to borrow to be able to build these projects that will ensure that we’re able to develop on a sustainable basis,” she said.
She added that Nigeria’s borrowing which although is a great concern, is still healthy, citing that as at July 2021, total borrowing is 23% of GDP which is still comparatively low.
She added that Nigeria has a revenue problem, although revenues have been increasing, adding that the Finance Ministry reported to the FEC that revenues from non-oil have performed, as at July, at the rate of 111%, which means outperforming the prorated budget.
On Budget targets, she said underlying targets for the budget provisions included oil price – $57 per barrel; oil production – 1.88 mbpd; exchange rate – N410.15 to a dollar; Oil Revenue – N3.15 trillion and Non-Oil Revenue – N2.13 trillion.
Others are Federal Government’s Independent Revenue of N1.82 trillion; Total Projected Federal Government Revenue of N10.13 trillion; Debt Service of N3.61 trillion; Statutory Transfers of N768.28 billion (including N462.53 billion capital component) and Personnel costs and Pensions of N4.69 trillion; (inclusive of N617.72 billion for the 63 GOEs).
Overhead costs of N792.39 billion (inclusive of N451.0 billion for the 63 GOEs); and Capital expenditure (inclusive of capital component of Social Investment Programmes, capital in Statutory Transfers, capital of 63 GOEs, Capital Supplementation as well as Grants and Donor funding) of N5.35 trillion (inclusive of N647.08 billion for the 63 GOEs).
The Minister added that the resultant deficit of N6.258 trillion will be financed by new borrowings of N5.012 trillion (domestic – N2.506 trillion and foreign – N2.506 trillion); drawdowns on Project-tied Multilateral/Bilateral loans – N1.156 trillion; and Privatization Proceeds of N90.73 billion.
On the adjustments to the Medium-Term Fiscal Framework 2022-2024, she listed Statutory Transfers of N768.28 billion and Debt Service of N3.61 trillion and Sinking Fund for Maturing Debts of N292.71 billion Naira.
A Recurrent Expenditure (Non-Debt) of N6.83 trillion, inclusive of N350.0 billion for the recurrent component of Social Investment Programme; and Aggregate Capital Expenditure of N5.35 trillion, inclusive of GOEs’ capital expenditure, multilateral/bilateral loan funded projects, Capital Supplementation and Grants/Aid funded projects, representing 33% of the expenditure budget.
