News
PMB Presents 2022 ‘Budget of Economic Growth and Sustainability’ To NASS [Full Text]
President Muhammadu Buhari. today has presented the 2022 budget dubbed “Budget of Economic Growth and Recovery” to a joint session of the National Assembly in the Green Chamber.
Below is the full text of the President’s speech on the occasion:
PROTOCOLS
1. It is my great pleasure to be here once again to present the 2022 Federal Budget Proposals to this distinguished Joint Session of the National Assembly.
2. Distinguished and Honourable leaders, and members of the National Assembly, let me start by commending you for the expeditious consideration and passage of the Supplementary Appropriation Bill 2021. This further underscores your commitment to our collective efforts to contain the COVID-19 Pandemic and address the various security challenges facing our country.
3. I will also take this opportunity to thank you for the quick consideration and approval of the 2022-2024 Medium-term Expenditure Framework and Fiscal Strategy Paper. Our hope is that National Assembly will continue to partner with the Executive by ensuring that deliberations on the 2022 Budget are completed before the end of this year so that the Appropriation Act can come into effect by the first of January 2022.
4. The 2022 Budget will be the last full-year budget to be implemented by this administration. We designed it to build on the achievements of previous budgets and to deliver on our goals and aspirations as will be reflected in our soon-to-be-launched National Development Plan of 2021 to 2025.
5. Distinguished Senators and Honourable Members, in normal times, I make use of this opportunity to provide an overview of global and domestic developments in the current year, a summary of our achievements, and our plans for the next fiscal year.
6. However, these are exceptional times. The grim realities of COVID-19 and its lethal variants are still upon us. From President to Pauper, the virus does not discriminate.
7. This is why our country still maintains its COVID -19 guidelines and protocols in place to protect its citizens and stop the spread of this disease.
8. Over the past few days, we have consulted with the Presidential Steering Committee on COVID-19 and the leadership of the National Assembly on how best to present the 2022 budget proposal keeping in mind the deep-rooted traditions in place and the guidelines for safe mass gatherings.
9. We ultimately decided that the most responsible and respectful approach was to hold a shorter than usual gathering while allowing the Honourable Minister of Finance, Budget and National Planning to provide fuller details of our proposals in a smaller event.
10. I am sure many of you will be relieved as my last budget speech in October 2020 lasted over fifty minutes.
11. Still, over the next few minutes, I will provide key highlights of our 2021 performance as well as our proposals for 2022.
PERFORMANCE OF THE 2021 BUDGET
12. The 2021 ‘Budget of Economic Recovery and Resilience’ is based on a benchmark oil price of 40 US Dollars per barrel, oil production of 1.6m b/d, and an exchange rate of 379 Naira to US Dollar. Furthermore, a Supplementary budget of 982.73 billion Naira was recently enacted to address exigent issues in the Security and Health sectors.
13. Based on the 2021 Fiscal Framework, total revenue of 8.12 trillion Naira was projected to fund aggregate federal expenditure of 14.57 trillion Naira (inclusive of the supplementary budget). The projected fiscal deficit of 6.45 trillion Naira, or 4.52 percent of GDP, is expected to be financed mainly by domestic and external borrowings.
14. By July 2021, Nigeria’s daily oil production averaged one 1.70million barrels (inclusive of condensates) and the market price of Bonny Light crude averaged 68.53 US Dollars per barrel.
15. Accordingly, actual revenues were 34 percent below target as of July 2021, mainly due to the underperformance of oil and gas revenue sources. Federal Government’s retained revenues (excluding Government Owned Enterprises) amounted to 2.61 trillion Naira against the proportionate target of 3.95 trillion Naira for the period.
16. The Federal Government’s share of Oil revenue totaled 570.23 billion Naira as of July 2021, which was 51 percent below target, while non-oil tax revenues totaled 964.13 billion Naira. The poor performance of oil revenue relative to the budget was largely due to the shortfall in production as well as significant cost recovery by NNPC to cover the shortfall between its cost of importing petrol and the pump price.
17. The National Assembly will recall that in March 2020 the Petroleum Products Pricing Regulatory Agency announced that the price of petrol would henceforth be determined by market forces.
18. However, as the combination of rising crude oil prices and exchange rate combined to push the price above the hitherto regulated price of 145 Naira per liter, opposition against the policy of price deregulation hardened on the part of Labour Unions in particular.
19. Government had to suspend further upward price adjustments while engaging Labour on the subject. This petrol subsidy significantly eroded revenues that should have been available to fund the budget.
20. On a positive note, we surpassed the non-oil taxes target by eleven (11) percent in aggregate. The sustained improvement in non-oil taxes indicates that some of our revenue reforms are yielding positive results. We expect further improvement in revenue collections later in the year as more corporate entities file their tax returns and we accelerate the implementation of our revenue reforms.
Improving Revenue Generation and Administration
21. We have stepped up the implementation of the strengthened framework for performance management of government-owned enterprises (GOEs), with a view to improving their operational efficiencies, revenue generation, and accountability. The 50% cost-to-income ratio imposed on the GOEs in the Finance Act 2020 has contributed significantly to rationalizing wasteful expenditures by several GOEs and enhanced the level of operating surpluses to be transferred to the Consolidated Revenue Fund (CRF). I solicit the cooperation of the National Assembly in enforcing the cost-to-income ratio and other prudential guidelines during your consideration of the budget proposals of the GOEs, which I am also laying before you today.
22. On the expenditure side, as at end of July 2021, a total of six-point seven-nine (6.79) trillion Naira had been spent as against the pro-rated expenditure of seven-point nine-one (7.91) trillion Naira. Accordingly, a deficit of four-point one-seven (4.17) trillion Naira was recorded as at end of July 2021. The deficit was financed through domestic borrowing.
23. Despite our revenue challenges, we have consistently met our debt service commitments. We are also up to date on the payment of staff salaries, statutory transfers, and overhead costs. As at (4th of October 2021, a total of 1.732 trillion Naira had been released for capital expenditure.
24. I am pleased to inform you that we expect to fund MDAs’ capital budget fully by the end of the fiscal year 2021.
25. Capital releases thus far have been prioritized in favor of critical ongoing infrastructural projects in the power, roads, rail, agriculture, health, and education sectors.
26. We have made progress on the railway projects connecting different parts of the country. I am glad to report that the Lagos-Ibadan Line is now completed and operational. The Abuja-Kaduna Line is running efficiently. The Itakpe-Ajaokuta rail Line was finally completed and commissioned over thirty (30) years after its initiation.
27. Arrangements are underway to complete the Ibadan-Kano Line. Also, work will soon commence on the Port Harcourt-Maiduguri Line and Calabar-Lagos Coastal Line, which will connect the Southern and Eastern States to themselves and to the North.
28. Progress is also being made on several power generation, transmission, and distribution projects, as well as off-grid solutions, all aimed towards achieving the national goal of optimizing power supply by 2025.
29. I am again happy to report that we continue to make visible progress in our strategic road construction projects like the Lagos – Ibadan expressway, Apapa – Oworonsoki expressway, Abuja – Kano expressway, East-West Road, and the second Niger bridge. We hope to commission most of these projects before the end of our tenure in 2023.
30. The Pandemic revealed the urgent need to strengthen our health system. Towards this end, we constructed 52 Molecular labs, 520-bed intensive care units, 52 Isolation centers, and provision of Personal Protective equipment across 52 Federal Medical Centres and Teaching Hospitals.
31. We continue to push our expenditure rationalization initiatives which we commenced in 2016. For example, on personnel costs, the number of MDAs captured on the Integrated Payroll and Personnel Information System increased from 459 in 2017 to 711 to date.
32. The recent passage of the Petroleum Industry Act 2021, and consequent incorporation of the Nigeria National Petroleum Corporation should also result in the rationalization of expenditure, as well as increased investments and improved output in the oil and gas industry.
33. Distinguished Senators and Honourable Members, you will agree with me that a lot has been accomplished over the last year but there is still much to be done. I will now proceed with a review of the 2022 Budget proposal.
THEME AND PRIORITIES OF THE 2022 BUDGET
34. The allocations to MDAs were guided by the strategic objectives of the National Development Plan of 2021 to 2025, which are:
a. Diversifying the economy, with robust MSME growth;
b. Investing in critical infrastructure;
c. Strengthening security and ensuring good governance;
d. Enabling a vibrant, educated, and healthy populace;
e. Reducing poverty; and
f. Minimizing regional, economic and social disparities.
35. The 2022 Appropriation, therefore, is a Budget of Economic Growth and Sustainability.
36. 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.
37. 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.
PARAMETERS AND FISCAL ASSUMPTIONS
38. Distinguished Members of the National Assembly, 2022 to 2024 Medium Term Expenditure Framework and Fiscal Strategy Paper sets out the parameters for the 2022 Budget as follows:
a. Conservative oil price benchmark of 57 US Dollars per barrel;
b. Daily oil production estimate of 1.88 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day);
c. Exchange rate of four 410.15 per US Dollar; and
d. Projected GDP growth rate of 4.2 percent and 13 percent inflation rate.
2022 REVENUE ESTIMATES
39. Based on these fiscal assumptions and parameters, total federally collectible revenue is estimated at 17.70 trillion Naira in 2022.
40. Total federally distributable revenue is estimated at 12.72 trillion Naira in 2022 while total revenue available to fund the 2022 Federal Budget is estimated at 10.13 trillion Naira. This includes Grants and Aid of 63.38 billion Naira, as well as the revenues of 63 Government-Owned Enterprises.
41. Oil revenue is projected at 3.16 trillion, Non-oil taxes are estimated at 2.13 trillion Naira and FGN Independent revenues are projected to be 1.82 trillion Naira.
PLANNED 2022 EXPENDITURE
42. A total expenditure of sixteen point three-nine (16.39) trillion Naira is proposed for the Federal Government in 2022. The proposed expenditure comprises:
a. Statutory Transfers of 768.28 billion Naira;
b. Non-debt Recurrent Costs of 6.83 trillion;
c. Personnel Costs of 4.11 trillion Naira;
d. Pensions, Gratuities and Retirees’ Benefits 577.0 billion Naira;
e. Overheads of 792.39 billion Naira;
f. Capital Expenditure of 5.35 trillion Naira, including the capital component of Statutory Transfers;
g. Debt Service of 3.61 trillion Naira; and
h. Sinking Fund of 292.71 billion Naira to retire certain maturing bonds.
Fiscal Balance
43. We expect the total fiscal operations of the Federal Government to result in a deficit of 6.26 trillion Naira. 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
44. We need to exceed this threshold considering our collective desire to continue tackling the existential security challenges facing our country.
45. We plan to finance the deficit mainly by new borrowings totaling 5.01 trillion Naira, 90.73 billion Naira from Privatization Proceeds, and 1.16 trillion Naira drawdowns on loans secured for specific development projects.
46. 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.
47. 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.
48. Our target over the medium term is to grow our 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 that we are determined to tackle to ensure our debts remain sustainable.
49. Very importantly, we have endeavored to use the loans to finance critical development projects and programs aimed at improving our economic environment and ensuring the effective delivery of public services to our people. We focused on;
a. the completion of major road and rail projects;
b. the effective implementation of Power sector projects;
c. the provision of potable water;
d. construction of irrigation infrastructure and dams across the country; and
e. 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.
Innovations in Infrastructure Financing
50. In 2022, Government will further strengthen the frameworks for concessions and public-private partnerships (PPPs). Capital projects that are good candidates for PPP by their nature will be developed for private sector participation.
51. We will also explore available opportunities in the existing ecosystem of green finance including the implementation of our Sovereign Green Bond Programme and leveraging debt-for-climate swap mechanisms.
Enhancing Revenue Mobilisation
52. Our strategies to improve revenue mobilization will be sustained in 2022 with the goal of achieving the following objectives:
a. Enhance tax and excise revenues through policy reforms and tax administration measures;
b. Review the policy effectiveness of tax waivers and concessions;
c. Boost customs revenue through the e-Customs and Single Window initiatives; and
d. Safeguard revenues from the oil and gas sector.
53. Distinguished Senators and Honourable Members, 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.
Finance Bill 2022
54. 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.
55. 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.
CONCLUSION
56. Mr. Senate President, Mr. Speaker, Distinguished and Honourable Members of the National Assembly, this speech would be incomplete without commending the immense, patriotic, and collaborative support of the National Assembly in the effort to deliver socio-economic development and democracy dividends for our people.
57. I wish to assure you of the strong commitment of the Executive to strengthen the relationship with the National Assembly.
58. 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.
59. 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.
60. It is with great pleasure, therefore, that I lay before this distinguished Joint Session of the National Assembly, the 2022 Budget Proposals of the Federal Government of Nigeria.
61. I thank you most sincerely for your attention. May God bless the Federal Republic of Nigeria.
Business
Communications Minister Hints At Upcoming Call and Data Tariff Increase
Minister of Communications and Digital Economy, Bosun Tijani has announced that prices are expected to rise by 30-60 percent.
The revelation comes days after Tijani confirmed that telecom services tariffs would increase, but not by the proposed 100 percent.
Tijani says the telecommunications sector relies heavily on investment to drive Nigeria’s economic growth. He said investors in the sector must continually invest in equipment to remain relevant, despite the challenges posed by inflation.
“The sector is about investment in infrastructure; the technologies are changing, so you have to keep investing in technology. Things like 3G will be decommissioned at some point because you have higher technology, so they have to keep investing in equipment. And we all know that there is inflation. For us, as we are protecting them, we want to keep importing capital in the sector. The foreign direct investment in our sector in the first quarter of 2024, driven by telcos, was close to $199 million; this is bigger than the entire inflow in 2023. We can’t get to a $1 trillion economy if mobile network operators are investing at a snail’s pace,” he stated.
Telecommunication operators have been advocating for approval to increase service tariffs, citing the rising inflation in the country. The implementation of key policies by the present administration, such as the removal of fuel subsidies and the unification of exchange rates, has significantly contributed to the increase in economic inflation across Nigeria.
Rejecting telecom operators’ calls for a 100% hike, Dr. Tijani emphasized that a moderate increase would balance affordability and sector growth.
“The telecommunications sector contributes over 16% to our GDP, employs thousands of Nigerians, and is vital to the digital economy. However, we must ensure services remain accessible while sustaining the sector’s viability,” Dr. Tijani explained.
He highlighted that the Nigerian Communications Commission (NCC) is leading a data-driven tariff review process, prioritizing consumer interests and long-term sector sustainability.
Addressing rural connectivity, the minister announced plans to deploy 90,000 kilometers of fiber-optic cables and construct telecom towers in remote areas through Special Purpose Vehicles (SPVs). He also noted Nigeria’s leadership in managing telecommunications infrastructure resilience, particularly in mitigating submarine cable disruptions.
Dr. Tijani reaffirmed the government’s commitment to harmonizing taxes, declaring telecom infrastructure a critical national asset, and holding operators accountable for service interruptions.
News
Lagos lawmakers impeach Speaker Mudashiru Obasa
32 Lagos State House of Assembly members impeached Speaker Mudashiru Obasa yesterday while he was still in Atlanta, Georgia, USA. The action, free of infighting, marked the end of Obasa’s eight-year tenure as Speaker.
Obasa who represented Agege Constituency 1 at the House was impeached on Monday by members of the House for offenses bordering on poor leadership style, misconduct, and perpetual lateness to legislative sections and plenary amongst others.
The lawmakers cited allegations of corruption, gross misconduct, and authoritarian leadership as reasons for his removal. They declared they were ready for a change, with one legislator stating, “We’ve had enough.”
Following the impeachment, Obasa’s deputy, Hon. Mojisola Meranda, was promptly sworn in as the new Speaker, making history as the first female to hold the position in Lagos State. Hon. Fatai Mojeed, formerly the Deputy Chief Whip, was elected Deputy Speaker.
In the aftermath of Lagos Assembly Speaker Mudashiru Obasa’s impeachment, details have emerged about the pivotal role played by Alhaji Tajudeen Olusi, a respected political leader in Lagos State.
According to ThisDay, Olusi reportedly gave a detailed situation report to President Bola Tinubu, detailing Obasa’s alleged insubordination toward political leaders in the state and repeated acts of disrespect toward Governor Babajide Sanwo-Olu.
Obasa’s bold gubernatorial ambitions further fueled tensions. His declaration that “no one could stop him” from becoming the next governor of Lagos State reportedly caused unease among party stalwarts.
Hon. Femi Saheed moved the motion for impeachment under “Matter of Urgent Public Importance,” accusing Obasa of misappropriating funds, high-handedness, and perpetuating division among lawmakers.
Saheed described Obasa’s leadership style as “authoritarian and undemocratic,” adding that he was often late to sessions and failed to respect legislative protocols.
The impeachment motion, grounded in Section 92(2)(C) of the Nigerian Constitution, was adopted unanimously through a voice vote.
News
Tinubu Pledges to complete $13bn rail line connecting PH to Maiduguri
President Bola Tinubu says his administration will complete the Eastern Rail line connecting Port Harcourt to Maiduguri.
Tinubu gave the assurance at an interactive session with South East leaders in Enugu during his visit to the state on Saturday, Bayo Onanuga, his spokesman, said in a statement.
The President also pledged that his administration would support the development of the Anambra Basin as a significant energy reserve.
The basin is estimated to hold up to 1 billion barrels of oil and 30 billion cubic feet of gas.
“On the support of the gas infrastructure. Sure, gas is an alternative to petrol. There is no wasting of time than to invest more in it. We will do it together, and I am lucky I have good governors,” he said.
President Tinubu praised Gov. Peter Mbah for his development model and philosophy after inaugurating several projects executed by the state government.
He pledged that the federal government would continue to support Enugu and other states in their development efforts.
Among the projects inaugurated by the President are the GTC Smart Green School; New Haven/Bisalla Road, the International Conference Center, the Command-and-Control Center, and 150 patrol vehicles equipped with surveillance cameras.
The President also performed the virtual commissioning of other notable projects from the Enugu State Government House.
At the inauguration of the Command-and-Control Center, the President said investment in security would bring rapid development.
“This is a profound demonstration of what we can do together. It reassures me that more revenue going to the sub-nationals and local government is not a waste. It is for development.
“We have committed leaders like Peter Mbah taking Enugu on the path of 21st-century development, taking Enugu to greater heights, and building our tomorrow today,” he said.
President Tinubu further lauded the governor, a member of the Peoples Democratic Party (PDP), for demonstrating an irrevocable commitment to human development.
“I don’t care which party you come from; you are my friend. Alex Otti of Abia State is also doing very well. It is not about the differences in languages and place of birth.
“No one of us has control of the mother tongue. God created us, and you can find yourself in Enugu, Onitsha or Lagos.
“We are all members of one huge family called Nigeria, but we live in different rooms in the same house.
“We must build this house to satisfy our immediate and future needs,” he said.
Mbah commended the Tinubu administration for establishing the South East Development Commission and liberalizing the electricity sector through the Electricity Act (Amendment).
“Your Excellency, your credential as a true federalist stands out brightly, and the legacies thereof will long earn you resounding accolades.
“In signing the Electricity Act (Amendment) Bill, you liberalized electricity generation, transmission, and distribution. That singular act will consistently rank as an enduring legacy.
“It is noteworthy that Enugu State was the first sub-national to which the NERC ceded regulatory oversight of the local electricity market. That reflects how swiftly we are pursuing our goals,” he said.
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