The adjustments being sought on the 2022 fiscal framework by President Muhammadu Buhari will push the N6.39 trillion deficit in this year’s Appropriation Act by N965.42b.
A letter containing the President’s request for a review was read during plenary yesterday by House of Representatives Speaker Femi Gbajabiamila.
The President is seeking urgent legislative action on the memo that will raise the budget deficit to N7.35 trillion.
Buhari’s letter showed the deficit as representing a 3.9 per cent of the Gross Domestic Product (GDP). He said the incremental deficit would be financed by borrowings from the domestic market.
The President hinged the prevailing developments in global and domestic economies.
The letter reads: “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.
“There is also the need to make adequate provisions for the recent enhancements of allowances for officers and men of the Nigeria Police Force to boost their morale as they grapple with heightened security challenges in the country.
“It has become necessary to adjust the fiscal framework, and accordingly amend the 2022 Appropriation Act to ensure its successful implementation.”
The areas on which the President is seeking the adjustments include:
* An increase in the project oil price benchmark by $11 per barrel from $62 per barrel to $73 per barrel;
* 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;
* An increase in the estimated provision for PMS subsidy for 2022 by N3.557 trillion from N442.72 billion to N4.00 trillion;
* A cut in the provision for federally-funded upstream projects being implemented by N200 billion, from N352.80 billion to N152.80 billion;
*An increase in the projection for Federal Government Independent Revenue by N400 billion and an additional provision of N182.45 billion to carter for the needs of the Nigeria Police Force.
The memo further reads: Based on these 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 (FCT) and other statutory deductions), is projected to reduce by N1.173 trillion.
The President said 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 projected the aggregate expenditure for the period to increase by N192.52 billion due to increase in personnel cost from N161.40 billion; other service wide votes by N21.05 billion (both for the Nigeria Police Force) and additional domestic debt service provision of N76.13 billion
The net reductions in statutory transfers by N66.07 billion are as follows:
* NDDC by N13.46 billion from N102.78 billion to N89.32 billion;
* NEDC by N6.30 billion from N48.08 billion to N41.78 billion;
* UBEC by N23.16 billion from N112.29 billion to N89.13 billion;
* Basic Health Care Fund,by N11.58 billion from N56.14 billion to N44.56 billion; and
* NASENI by N11.58 billion from N56.14 billion to N44.56 billion.
Urging the lawmakers to give his letter accelerated hearing, Buhai said: “I seek the cooperation of the National Assembly for expeditious legislative action on this request, given the urgency of the request for revision of the 2022 Fiscal Framework and 2022 Budget amendments.”