From Juliana Taiwo-Obalonye, Abuja
The Federal Executive Council (FEC) presided over by President Muhammadu Buhari, has approved the 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) as required by the Fiscal Responsibility Act, projecting revenue generation of N6.54 trillion and N2.62 trillion to accrue to the Federation Account and VAT, respectively.
The council also authorized the funding of a N5.26 trillion budget deficit through borrowings.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, stated this while briefing State House Correspondents at the end of he meeting.
According to her, she presented a memo on behalf of the ministry to FEC with a 2022 projected revenue of N6.54 trillion and N2.62 trillion to accrue to the Federation Account and VAT, respectively.
She added that this revenue is projected to increase in 2023 to 9.15 trillion.
Ahmed explained that the MTF FSP describes the federal government’s socio economic and developmental objectives and priorities for the reporting period of 2022 to 2024 as well as the fiscal strategies to be put in place, and policies to achieve in the priorities.
The minister further explained that the report to council highlighted the key drivers of government’s revenue and the spending plans.
“The goal for us is to improve the nation’s macro economic situation or reposition the economy on the path of inclusive diversified as well as sustainable. The MTF FSP consists of medium term macro economic projections, fiscal targets and estimates of revenue and expenditure including government’s financial obligations.
“We have also presented to the federal government the projected revenues for the 2022 to 2024. Specifically for 2022.
“The revenue that we expect is 6.54 trillion and 2.62 trillion to accrue to the Federation account on VAT respectively. And then there will be a net oil and gas revenue available for the Federation account account FAAC for distribution will be 6.15 1 trillion in 2022.
“This revenue is projected to increase in 2023 to 9.15 trillion. The total expenditure that we are expecting we have projected and approved by Council is an aggregate expenditure of 13.98 trillion Naira. This includes 1.1 trillion Naira of government owned enterprises expenditure as well as grants and donor funds donor funded projects in the sum of 62.24 billion.
“This means that this budget is just 3% higher than the 2021 budget in terms of the size of expenditure.
“We also reported to council the budget deficit and the financing items for the expenditure. The budget deficit that is projected for 2022 is 5.62 trillion, up from 5.60 trillion in 2021. This amount represents 3.05% of the estimated GDP, which is slightly above the 3% threshold that is specified in the fiscal responsibility, Act.
“The FRA empowers Mr. President to exceed the threshold in his opinion, the nation faces national security threats. And it is our opinion on fact agreed that we can exceed.
“The deficit is going to be financed by new foreign borrowing and domestic borrowing, both domestic and foreign in the sum of 4.89 trillion on privatisation proceeds of 90.73 billion and drawdowns from existing project tied loans of 635 billion.
“I just want to state that the project had debt to revenue ratio in the report is 43%. Which, of course, we know Nigerians all have concerns about the actual debt to revenue ratio into in 2019 was 58%. So, this is an improvement over the preceding over 2019. In 2020, the ratio was up to 85%. So 2022 is a significant improvement on 22 inch. I like to stop here at this time.”
Ahmed said she also provided to council, a macro economic background, which affirmed that the Nigerian economy has recovered from from a negative growth of minus 1.8% in 2020 to 2.5%.
She added: “Also, the inflation has moderated from a 19 months high in two months high. It’s now moderated two months now, that is coming down to 17.93%. And our foreign reserves stands at 34.2 billion at the end of May, which is 640 million declined from the previous month.
“The key macro assumptions that were presented and council approved is that there’ll be a crude oil benchmark price of $57 per barrel of crude oil for 2022, a crude oil production of 1.88 million barrels per day, and our exchange rate of N410 or N415 to one US dollar, an inflation rate of 10% in 2022, and a nominal GDP of 149.369 trillion.
“What is interesting is that the non oil GDP continues to grow at N169.69 trillion compared to all GDP of N14.8 trillion included in the nominal GDP. I beg your pardon, nominal consumption is 130,49.36 billion.”
The Special Adviser to the President on Media and Publicity, Femi Adesina, announced that the council approved the Ecological Fund Projects for the 3rd and 4th Quarters of 2020.
He said the funds are for soil erosion/flood control and pollution control intervention projects, with contracts awarded in favour of various contactors, in the total sum of N16,041,101,334.79, inclusive of 7.5% VAT.
Adesina stated: “These are the projects approved for implementation today: Erosion, Flood Control, Bridge Reconstruction and Road improvement at Umulmenyi Nkpa Communities of Bende LGA, Abia State; Gully Erosion Control Works at Umuokoro Lower Okata Community, Ihitte/Uboma LGA, Imo State; Imaku Omi Erosion Control Project, Ogun Waterside Local Government (Phase II), Ogun State; Afforestation, Combating Land Degradation, Road Improvement Measures in Aworiosun, Ikoyi Agroforestry Community, Isokan LGA, Osun State; Erosion Control at Calabar Free Trade Zone, Calabar, Cross River State; and Erosion and Road Improvement Works at Yelwa Primary School and Police Station Road, Yola, Adamawa State.
“Others are Ecological Problem at Federal College of Education Technical, Gombe, Gombe State; Flood and Erosion Menace Affecting Lau Community and its Environs in Lau LGA, Phase II, Taraba State; Erosion and Flood Control at Birnin Kudu, Budiga, Babaidu, Kafin Gana, Sammiya/ Buji LGA, Gofara, Yayarin Tukur, Birnin Kudu LGA, Jigawa State; Flood Erosion Control Works from Kano Road to Main Water Channel in Daura, Katsina State, Phase II; Asa River/Isale Koko Erosion and Flood Control Project, Ilorin East LGA, Kwara State; Erosion Flood Control and Environmental Degradation in Agaie and Lapai Community, Niger State; Soil Erosion, River Channelization and Slope Protection within Maitama District (Phase III), Federal Capital Territory (FCT), Abuja.
“Then, there was approval for the revised estimate total cost on the contract for the construction of Damaturu-Gasua-Nguru 132 KVA Double Circuit Transmission Line for Transmission Company of Nigeria (TCN).”
On his part, Minister of Transportation, Rotimi Amaechi said council approved the purchase of Canty Towers, which is located at 35, Adetokunbo Ademola Street, Victoria Island, Lagos, for the new headquarters of Nigerian Maritime Administration and Safety Agency, (NIMASA), in the sum of N17,471,500,130.54 inclusive of 7.5% tax.
The minister of works, Babatunde Fashola in his remarks said work is going on on over 13,000 roads and bridges across the country under 859 contracts.
He added that the ministry has completed the construction of over 5,000 kilometers of roads.