President Muhammadu yesterday presented the 2022 budget of N16.39 trillion to a joint session of the National Assembly, justifying his quest for more financial borrowings.
The President, who also noted that the federal government’s debt was within sustainable limits, said nation’s the borrowings were tied to specific strategic projects.
Recall that the federal government had come under hard criticisms over its decision to more borrowings.
The President, however, noted the concerns raised by Nigerians, saying projects for which the funds were secured could be publicly verified. He added that the deficit arising from the N16.39 trillion 2022 budget would be financed by new borrowings.
Buhari also said that the two economic recessions witnessed by his administration necessitated the debt.
He said: “We plan 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.
“Some have expressed concern over our resort to borrowing to finance our fiscal gaps. They are right to be concerned. However, we believe that the debt level of the Federal Government is still within sustainable limits. Borrowings are to specific strategic projects and can be verified publicly.
“As you are aware, we have witnessed two economic recessions within the period of this administration. In both cases, we had to spend our way out of recession, which necessitated a resort to growing the public debt.
‘’It is unlikely that our recovery from each of the two recessions would have grown as fast without the sustained government expenditure funded by debt.
“Very importantly, we have endeavoured to use the loans to finance critical development projects and programmes aimed at improving our economic environment and ensuring effective delivery of public services to our people.
‘’We focused on the completion of major road and rail projects; the effective implementation of power sector projects; the provision of potable water; construction of irrigation infrastructure and dams across the country; and critical health projects such as the strengthening of national emergency medical services and ambulance system, procurement of vaccines, polio eradication and upgrading Primary Health Care Centres across the six geopolitical zones.”
Titled “Budget of Economic Growth and Sustainability”, Buhari said the 2022 Appropriation Bill would cater for the security of the country, diversification of the economy, and infrastructure, among others.
“The allocations to MDAs were guided by the strategic objectives of the National Development Plan of 2021 to 2025, which are diversifying the economy, with robust MSME growth; investing in critical infrastructure; strengthening security and ensuring good governance; enabling a vibrant, educated and healthy populace; reducing poverty; and minimizing regional, economic and social disparities.
“The 2022 Appropriation, therefore, is a Budget of Economic Growth and Sustainability. Defence and internal security will continue to be our top priority. We remain firmly committed to the security of life, property and investment nationwide.
‘’We will continue to ensure that our gallant men and women in the armed forces, police and paramilitary units are properly equipped, remunerated and well-motivated.
“The 2022 budget is also the first in our history, where MDAs were clearly advised on gender responsive budgeting. These are part of critical steps in our efforts to distribute resources fairly and reach vulnerable groups of our society”, he said.
According to the 2022 to 2024 Medium Term Expenditure Framework and Fiscal Strategy Paper, MTFE/FSP passed by the National Assembly, the parameters set out for the 2022 Budget included 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 also gave highlights of the expenditure.
The President added: “ A total expenditure of N16.39) trillion is proposed for the Federal Government in 2022.
‘’The proposed expenditure 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; capital expenditure of 5.35 trillion Naira, including the capital component of Statutory Transfers; Debt Service of N3.61 trillion; and sinking fund of N292.71 billion to retire certain maturing bonds.”
To enhance revenue mobilisation, President Buhari said there would be policy reforms, among others.
“Our strategies to improve revenue mobilisation will be sustained in 2022 with the goal of achieving the following objectives: and
“Enhance tax and excise revenues through policy reforms and tax administration measures;
”Review the policy effectiveness of tax waivers and concessions; boost Customs revenue through the e-Customs and Single Window initiatives; and safeguard revenues from the oil and gas sector.”
“Distinguished senators and members, House of Representatives, I commend you for the passage of the Petroleum Industry Act 2021. It is my hope that the implementation of the law will boost confidence in our economy and attract substantial investments in the sector.
“In line with our plan to accompany annual budgets with Finance Bills, partly to support the realization of fiscal projections, current tax and fiscal laws are being reviewed to produce a draft Finance Bill 2022.
“It is our intention that once ongoing consultations are completed, the Finance Bill would be submitted to the National Assembly to be considered alongside the 2022 Appropriation Bill,’’ the President said.said.
Expressing optimism that 2022 would unlock more of the country’s potentials, Buhari said: “Nigeria is currently emerging from a very difficult economic challenge. We must continue to cooperate and ensure that our actions are aimed at accelerating the pace of economic recovery so that we can achieve economic prosperity and deliver on our promises to the Nigerian people.”
“The fiscal year 2022 is very crucial in our efforts to ensure that critical projects are completed, put to use and improve the general living conditions of our people.’’