Buhari Seeks Senate Adjustments To 2022 Fiscal Framework
PRESS STATEMENT
Buhari Seeks Senate Adjustments To 2022 Fiscal Framework
***Wants Benchmark Increase To $73 Per Barrel, Subsidy Raise to
N4trn
***Demands Additional N182.45bn For Police
The Senate, on
Tuesday, April 12, 2022 read on the floor a request from President Muhammadu
Buhari to approve adjustments to the 2022 Fiscal Framework. The request was contained in a letter dated 5th April, 2022. The letter was read during plenary by the Senate President, Ahmad
Lawan.
President
Buhari, in the letter, explained that an adjustment to the 2022 became
imperative in view of new developments in both the global and domestic
economies.
According to
him, the developments were occasioned by spikes in the market price of crude
oil, which were a fallout of the Russian-Ukraine war.
“As you are
aware, there have been new developments both in the global economy as well as
in the domestic economy which have necessitated the revision of the 2022 Fiscal
Framework on which the 2022 Budget was based”.
“These
developments include spikes in the market price of crude oil, aggravated by the
Russian-Ukraine war, significantly lower oil production volume due principally
to production shut-ins as a result of massive theft of crude oil between the
production platforms and the terminals”.
“The decision
to suspend the removal of Petroleum Motor Spirit (PMS) subsidy at a time when
high crude oil prices have elevated the subsidy cost has significantly eroded
government revenues”.
President
Buhari therefore, requested the Upper Legislative Chamber to approve an
increase in the oil benchmark by US$11 per barrel, from US$62 per barrel to
US$73 per barrel.
The President
also sought a reduction in the projected oil production volume by 283,000
barrels per day, from 1.883 million barrels per day to 1.600 million barrels
per day.
He also requested
the Chamber to approve an increase in the estimated provision for PMS subsidy
for 2022 by N3.557 trillion, from N442.72 billion to N4.00 trillion Naira.
President
Buhari, underscored the need cut in the provision for Federal funded upstream
projects being implemented by N200 billion, from N352.80 billion to N152.80
billion Naira.
The President
propose an increase in the projection for Federal Government Independent
Revenue by N400 billion Naira; and an additional provision of N182.45 billion
Naira to cater for the needs of the Nigerian Police Force.
He added that,
“based on the above adjustments, the Federation Account (Main Pool) revenue for
the three tiers of government is projected to decline by N2.418 trillion, while
FGN’s share from the Account (net of transfer to the Federal Capital Territory
and other statutory deductions) is projected to reduce by N1.173 trillion Naira”.
He disclosed
that the amount available to fund the FGN Budget is projected to decline by
N772.91 billion due to the increase in the projection for Independent Revenue
(Operating Surplus Remittance) by N400 billion.
Buhari explained
further that Aggregate Expenditure is projected to increase by N192.52 billion
Naira, due to increase in personnel cost by N161.40 billion Naira and other
service wide votes by N21.05 billion (both for the Nigeria Police Force),
additional domestic debt service provision of N76.13 billion Naira, and net
reductions in Statutory Transfers by N66.07 billion Naira.
In a breakdown,
the President said the net deductions would see a cut by N13.46 billion Naira
from N102.78 billion Naira to N89.32 billion Naira for NDDC; NEDC, by N6.30
billion Naira from N48.08 billion Naira to N41.78 billion Naira; UBEC, by
N23.16 billion Naira from N112.29 billion Naira to N89.13 billion Naira; Basic
Health Care Fund, by N11.58 billion Naira from N56.14 billion Naira to N44.56
billion Naira; and NASENI, by N11.58 billion Naira from N56.14 billion Naira to
N44.56 billion Naira.
The President
noted that the total budget deficit is projected to increase by N965.42 billion
Naira to N7.35 trillion Naira, representing 3.99% of GDP.
According to
him, the incremental deficit will be financed by new borrowings from the
domestic market.
Signed:
Dr. Ezrel Tabiowo, FAI, FIMC, CMC, FCP, Fsca
Special Assistant (Press)
To President of the Senate
Tuesday, April 12, 2022.