The federal government has unveiled its 2022-2024 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) with a projection to spend the sum of N13. 981 trillion in 2022.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, who presented the framework at a briefing in Abuja on Thursday, said that the budget would rise to N15.498 trillion and N16.777 trillion in 2023 and 2014, respectively.
With the rising prices of crude oil in the international market, she said that the framework had a benchmark of $57 per barrel in 2022 and 2023, which would drop to $55 pb in 2024.
According to Ahmed, the crude oil benchmarks were “premised on the averages of leading forecasting institutions, factors affecting market fundamentals, global economic recovery, plans by governments and market sentiments.”
She noted that the World Bank forecasts that crude oil prices would rise gradually from an average of $60 pb in 2022 to $61 pb in 2023 and 61.9 pb in 2024. Oil prices have been in the region of $77 pb, lately.
The Gross Domestic Product (GDP) growth rate is projected to rise from this year’s projection of 2.5 per cent to 4.20 per cent in 2022.
According to the MTEF/FSP, the GDP growth rate would fall to 2.3 per cent in 2023 before rising to 3.3 per cent in 2024.
Ahmed explained that the reduction in the GDP projection for 2023 was due to the fact that it would be an election year, which would normally affect economic activities.
She said that weaker-than-expected economic performance remained a threat to the federal government’s ambitious revenue growth targets as seen in the first five months of the 2021 fiscal year.
“As of May, N1.49 trillion was realized out of the prorated sum of N2.16 trillion. This represents 69% performance,” Ahmed disclosed. Non-Oil revenue stood at N1.954 trillion, within the period January-May 2021.
She said that the amount available for distribution from the Federation Account was N2.78 trillion.
Of this amount, the Federal Government received N998.57 billion, while the States and Local Governments received N506.59 billion and N390.48 billion respectively from the Main Pool Account.
Federal, State and Local governments received N132.70 billion, N442.33 billion and N309.63 billion respectively from the VAT Pool Account.
On the expenditure side, she disclosed that between January–May 2021, N4.86 trillion (representing 92.7% of the prorated budget) has been spent.
Her words, “This excludes GOEs’ and project-tied debt expenditures. Of the expenditure, N1.80 trillion was for debt service (37% of FGN expenditures); and N1.50 trillion for Personnel cost, including Pensions (31% of FGN revenues). As at May, N973.13 billion had been released for capital expenditure.”
The minister stated that fuel subsidy which cost as much as N150 billion in a particular month has become an albatross for the Nigerian economy and argued that it must be eliminated.
