THUR 07 OCT, 2021-theGBJournal- A total expenditure of sixteen point three-nine (N16.39) trillion Naira is proposed for the Federal Government in 2022.
The FG’s draft expenditure outlay presented today at the National Assembly by President Muhammadu Buhari, comprises Statutory Transfers of N768.28 billion, Non-debt Recurrent Costs of N6.83 trillion, Personnel Costs of N4.11 trillion, Pensions, Gratuities and Retirees’ Benefits N577.0 billion, Overheads of N792.39 billion and Capital Expenditure of N5.35 trillion Naira, including the capital component of Statutory Transfers, Debt Service of 3.61 trillion Naira as well as Sinking Fund of N292.71 billion to retire certain maturing bonds.
The 2022 revenue estimates which is based on these fiscal assumptions and parameters, estimates total federally-collectible revenue at N17.70 trillion in 2022.
Total federally distributable revenue is estimated at N12.72 trillion in 2022 while total revenue available to fund the 2022 Federal Budget is estimated at N10.13 trillion. This includes Grants and Aid of N63.38 billion, as well as the revenues of 63 Government-Owned Enterprises.
Oil revenue is projected at N3.16 trillion, Non-oil taxes are estimated at N2.13 trillion and FGN Independent revenues are projected to be N1.82 trillion.
The 2022 to 2024 Medium Term Expenditure Framework and Fiscal Strategy Paper sets out the parameters for the 2022 Budget as follows:
– Conservative oil price benchmark of 57 US Dollars per barrel;
– Daily oil production estimate of 1.88 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day);
– Exchange rate of four 410.15 per US Dollar; and
– Projected GDP growth rate of 4.2 percent and 13 percent inflation rate.
President Buhari said his administration expects the total fiscal operations of the Federal Government to result in a deficit of N6.26 trillion. This represents 3.39 percent of estimated GDP, slightly above the 3 percent threshold set by the Fiscal Responsibility Act 2007.
‘’Countries around the world have to of necessity over-shoot their fiscal thresholds for the economies to survive and thrive. We need to exceed this threshold considering our collective desire to continue tackling the existential security challenges facing our country,’’ he said.
The president argued that the debt level of the Federal Government is still within sustainable limits and said his administration plans to finance the deficit mainly by new borrowings totalling N5.01 trillion, N90.73 billion from Privatization Proceeds and N1.16 trillion drawdowns on loans secured for specific development projects.
‘’ Borrowings are to specific strategic projects and can be verified publicly,’’ President Buhari said.
He said the FG’s target over the medium term is to grow the country’s Revenue-to-GDP ratio from about 8 percent currently to 15 percent by 2025.
‘’At that level of revenues, the Debt-Service-to-Revenue ratio will cease to be worrying. Put simply, we do not have a debt sustainability problem, but a revenue challenge which we are determined to tackle to ensure our debts remain sustainable.’’
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