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Buhari Seeks Senate Adjustments To 2022 Fiscal Framework

Buhari Seeks Senate Adjustments To 2022 Fiscal Framework



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.




Dr. Ezrel Tabiowo, FAI, FIMC, CMC, FCP, Fsca


Special Assistant (Press)

To President of the Senate 


Tuesday, April 12, 2022.


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