2022 budget presentation by president buhari

2022 Budget Speech: Budget of Economic Growth and Sustainability – President Buhari

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.

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.

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.

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.

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.

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.

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.

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.

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.

I am sure many of you will be relieved as my last budget speech in October 2020 lasted over fifty minutes.

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

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 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.

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.

By July 2021, Nigeria’s daily oil production averaged one 1 .70 million barrels (inclusive of condensates) and the market price of Bonny Light crude averaged 53 US Dollars per barrel.

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.

The Federal Government’s share of Oil revenue totalled 570.23 billion Naira as of July 2021, which was 51 percent below target, while non-oil tax revenues totalled 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.

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.

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 litre, opposition against the policy of price deregulation hardened on the part of Labour Unions in particular.

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.

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

We have stepped up implementation of the strengthened framework for performance management of government owned enterprises (GOEs), with a view to improve their operational efficiencies, revenue generation and accountability. The 50 percent cost-to-income ratio imposed on the GOEs in the Finance Act 2021 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. 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.

On the expenditure side, as at end of July 2021, a total of 6.79 trillion Naira had been spent as against the pro-rated expenditure of 7.91 trillion Naira. Accordingly, a deficit of 4.17 trillion Naira was recorded as at end of July 2021. The deficit was financed through domestic borrowing.

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 4 th of October 2021, a total of 1.732 trillion Naira had been released for capital expenditure.

I am pleased to inform you that we expect to fund MDAs’ capital budget fully by the end of the fiscal year 2021 .

Capital releases thus far have been prioritised in favour of critical ongoing infrastructural projects in the power, roads, rail, agriculture, health and education sectors.

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 30 years after its initiation.

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.

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.

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.

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 centres and provision of Personal Protective equipment across 52 Federal Medical Centres and Teaching Hospitals.

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.

The recent passage of the Petroleum Industry Act 2021, and consequent incorporation of the Nigeria National Petroleum Corporation should also result in rationalisation of expenditure, as well as increased investments and improved output in the oil and gas industry.

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

The allocations to MDAs were guided by the strategic objectives of the National Development Plan of 2021 to 2025, which are:

• Diversifying the economy, with robust MSME growth;
• Investing in critical infrastructure;
• Strengthening security and ensuring good governance;
• Enabling a vibrant, educated and healthy populace;
• Reducing poverty; and
• Minimizing regional, economic and social disparities.

The 2022 Appropriation therefore is a Budget of Economic Growth and Sustainability .

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.

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

Distinguished Members of the National Assembly, the 2022 to 2024 Medium Term Expenditure Framework and Fiscal Strategy Paper sets out the parameters for the 2022 Budget as follows:

• Conservative oil price benchmark of 57 US Dollars per barrel;
• Daily oil production estimate of 1.88 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day);
• Exchange rate of 410.15 per US Dollar; and
• Projected GDP growth rate of 4.2 percent and 13 percent inflation rate.

2022 REVENUE ESTIMATES

Based on these fiscal assumptions and parameters, total federally-collectible revenue is estimated at 70 trillion Naira in 2022.

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.

Oil revenue is projected at 3.16 trillion Naira, 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

A total expenditure of 16.39 trillion Naira is proposed for the Federal Government in 2022. The proposed expenditure comprises:

• Statutory Transfers of 768.28 billion Naira;
• Non-debt Recurrent Costs of 6.83 trillion;
• Personnel Costs of 4.11 trillion Naira;
• Pensions, Gratuities and Retirees’ Benefits 577.0 billion Naira;
• Overheads of 792.39 billion Naira;
• Capital Expenditure of 5.35 trillion Naira, including the capital component of Statutory Transfers;
• Debt Service of 3.61 trillion Naira; and
• Sinking Fund of 292.71 billion Naira to retire certain maturing bonds.

FISCAL BALANCE

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 of necessity over-shoot their fiscal thresholds for the economies to survive and thrive

We need to exceed this threshold considering our collective desire to continue tackling the existential security challenges facing our country.

We plan to finance the deficit mainly by new borrowings totalling 5.01 trillion Naira, 90.73 billion Naira from Privatization Proceeds and 1.16 trillion Naira drawdowns on loans secured for specific development projects.

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.

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.

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 which we are determined to tackle to ensure our debts remain sustainable.

Very importantly, we have endeavoured to use the loans to finance critical development projects and programmes aimed at improving our economic environment and ensuring effective delivery of public services to our people. We focused on;

• the completion of major road and rail projects;
• the effective implementation of Power sector projects;
• the provision of potable water;
• construction of irrigation infrastructure and dams across the country; and
• 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

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.

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

Our strategies to improve revenue mobilisation will be sustained in 2022 with the goal of achieving the following objectives:

• Enhance tax and excise revenues through policy reforms and tax administration measures;
• Review the policy effectiveness of tax waivers and concessions;
• Boost customs revenue through the e-Customs and Single Window initiatives; and
• Safeguard revenues from the oil and gas sector.

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

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.

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.

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.

I wish to assure you of the strong commitment of the Executive to strengthen the relationship with the National Assembly.

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.

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.

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.

I thank you most sincerely for your attention.

May God bless the Federal Republic of Nigeria.

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Buhari Raises 2022 Budget Proposal to N16.45trn

•Sends revised 2022-2024 MTEF-FSP to N’Assembly for amendment

•Presents appropriation bill tomorrow

•INEC to get additional N100bn for 2023 general elections

Deji Elumoye, Udora Orizu and Juliet Akoje in Abuja

President Muhammadu Buhari yesterday sought the approval of the National Assembly to increase the 2022 appropriation bill from N13.98 trillion to N16.45 trillion in a revised 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF-FSP) amendment forwarded to the legislative arm.

This is just as indications emerged in the two chambers of the Assembly that the 2022 Appropriation Bill will be presented by the President Buhari to a joint session of the federal lawmakers on Thursday as exclusively reported by THISDAY yesterday.

The president’s fresh request was contained in a three-page letter seeking an amendment to the 2022-2024 MTEF/FSP, which was recently approved by both chambers.

The federal lawmakers had last week, passed the MTEF-FSP retaining all the projections submitted to it by the President in July.

Both Senate and the House of Representatives referred the request letters to both chambers committee on finance to expedite action on the Amendment to meet up with Thursday possible presentation of budget by the President.

President Buhari in the letter said the revision was necessitated by the need to reflect the new fiscal terms in the Petroleum Industry Act (PIA) 2021, as well as other critical expenditures in the 2022 Budget.

According to him, the underlying drivers of the 2022 fiscal projections, such as oil price benchmark, oil production volume, exchange rate, GDP growth, and inflation rate reflect emergent realities and the macroeconomic outlook remained unchanged as in the previously approved 2022-2024 MTEF-FSP.

Arising from this, and other critical expenditure that should be accommodated in the 2022 appropriation bill, the President explained that changes in the projections in the framework included a N341.87 billion decrease in gross revenue projection from N8.870 trillion to N8.528 trillion.

He also said the federal government’s aggregate expenditure (including GOEs and Project-tied Loans) was projected to increase by N2.47 trillion, from N13.98 trillion to N16.45 trillion.

President Buhari further explained that there was aN100 billion additional provision for Independent National Electoral Commission (INEC) to prepare for 2023 general elections in the country.

The letter, which was read at Tuesday plenary in the two chambers by Deputy Senate President, Senator Ovie Omo-Agege who presided at Senate plenary and House Speaker, Hon Femi Gbajabiamila, read in part, “It is with pleasure that: forward the Revised 2022-2024 Medium Term Fiscal ‘Framework (MTEF) for the kind consideration and approval of the House of Representatives. The fiscal effects of PIA implementation are assumed to kick in by mid-year 2022.

“The revised 2022-24 Fiscal Framework is the premised on hybrid of January-June (based on current fiscal regime) and July-December (based on PIA fiscal regime), while 2023 and 2024 are now fully based on the PIA.

“The provision of N54 billion to NASENI which represents one per cent FGN Share of Federation Account. Additional provision of N510 billion in the Service Wide Votes to cater for National Poverty Reduction with Growth Strategy (N300 billion), police Operations Fund (N50 billion), Hazard Allowance for Health workers (N50 billion), Public Service Wage Adjustments (additional N80 billion), and MDAs’ Electricity Bills Debt (additional N37 billion).

“Additional Capital provision of N1.70 trillion, attributed to projected increases in Capital Supplementation by N179.1 billion, GOEs Capital by N222.1 billion; TETFUND Expenditure by N290.7 billion; Multilateral/Bilateral Project-tied Loans by N517.5 billon, and MDAs’ Capital Expenditure by N390.5 billon (including N178.1 billion provision for population and housing census to be carried out in 2022.

“The Aggregate Deficit (inclusive of GOEs and Project-tied Loans) is projected to increase by N692.0 billion or to 3.42 per cent of Gross Domestic Product (GDP) from 3.05 per cent of GDP. I herewith forward the Revised 2022-2024 MTEF. As the 2022 budget of the Federal Government will be prepared based on the parameters and fiscal assumptions of the approved Revised 2022-2024 MTEF. I seek the cooperation of the National Assembly for expeditious legislative action on the submission.”

At the Senate, the Deputy Senate President, after reading the President’s letter referred same to the Committee on Finance.

The Committee which is Chaired by Senator Solomon Olamilekan Adeola was mandated to report back tomorrow, Wednesday, October 6, 2021.

“You will have to report back to us latest tomorrow (Wednesday), to enable us use it as a predicate for the budget presentation on Thursday”, Omo-Agege said.

Senate Leader, Senator Yahaya Abdullahi, immediately after the Deputy President of the Senate , Ovie Omo – Agege finished reading the request, informed the Senate that 2022 budget presentation would be made by President Buhari to joint session of the National Assembly on Thursday this week.

“In view of the planned 2022 budget presentation to joint session of the National Assembly by President Muhammadu Buhari this Thursday, I move for suspension of our relevant rules for expeditious consideration of the revised 2022 – 2024 MTEF/ FSP documents.

“In doing this, I move that lead debate on the request should be skipped and that it should be transmitted to our committee on Finance for the required scrutiny for just 24 hours , which makes the committee’s report to be submitted on Wednesday in plenary to pave way for the Thursday budget presentation by the President. I so move,” he added.

Accordingly, in line with parliamentary practices and procedures, the leader’s motion was seconded by the Minority Leader, Senator Eyinnaya Abaribe, and adopted by the Senate when put to voice votes.

At the House, Gbajabiamila after reading the letter thereafter referred it to the Finance Committee chaired by Hon. James Faleke.

He said the Committee should get to work on the amendment, adding that there was the possibility that Buhari would present the appropriation bill on Thursday.

His words: “Finance Committee should get down to work on the amendment, there’s a possibility that Buhari will present the budget on Thursday.”

Shortly after the letter was read in the House, a member, Hon. Ossai Nicholas Ossai, raised a point of order saying the MTEF was a money bill, saying every money bill passes all stages including the first reading and second reading, at which point it must be subjected to debate before being sent to the committee.

Corroborating Ossai’s statement, the Minority Leader, Hon. Ndudi Elumelu citing relevant House rules told Gbajabiamila to allow the lawmakers debate the amendment at the plenary, Wednesday.

Elumelu said, “Yes you had ruled on the point of order raised by Ossai on issue of the need to debate the general principles of the bill whether brought in for amendment or a fresh bill. If you go to paragraph four of the same point of order, it says during debates for money bills, member should be given five minutes each to make submissions.

“You just read a letter as to the effect that there has been changes to the earlier approved MTEF which has led to his bringing a letter asking to of course make some adjustments. “Confining such adjustments to the House Committee on Finance for them to deliberate and bring back in two days and announcing possibility of president presenting the proposed 2022 estimates on Thursday, if you look at the time frame it would seem we are hasty to look at those items that make it different from what we had approved.”

Ruling them out of order, Gbajabiamila said, “Both you and Hon Ossai had referred to Order 12 Rule 19 and you referred to paragraph 4. The said Order 12 Rule 19 is talking about the budget. The MTEF is not the budget. We are not discussing about the appropriation bill today. You are ruled out of order.”

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Senators React To 2022 Budget Presentation By President Buhari

ABUJA – Shortly after President Muhammadu Buhari presented the 2022 budget to the joint session of the National Assembly, some Senators expressed their minds on the issues, especially the borrowing of N5.01 trillion to finance the deficit.

Senator Ayo Akinyelure said: “To me, its a budget of hope for Nigeria. I believe Mr. President has done well in the manner of returning the budget cycle to January to December. I believe my colleagues and I will work round the clock to ensure the budget is ready for signing before December.

Senator Solomon Adeola said: “For the first time, the budget stood at N16.3 trillion as contained in the MTEF passed by the National Assembly. I believe it is a budget of hope. And the President has said that insecurity and education will take the front burner in this year’s budget.

“All other sectors will also be given equal attention to ensure that for the first time, we have a budget that will not only take us out of recession but with emphasis on insecurity and education.

“The president has said that those who are agitated by the borrowing has reasons to fear but the government has been spending the money on verifiable projects. I think we should give him a chance. I believe the budget will take care of the overall interest of the entire Nigerians.

“Every nation of the world are facing one challenge or the other because of insecurity and covid-19. We cannot be left out as a nation.”

Senator Opeyemi Bamidele said: “The budget goes to show that the government is conscious of the terms the country is. He said since it is a budget of legacy, the figures from N13trn last year to N16.39 shows that with the items listed, the budget has given governance a human face.

“We are all concern on the level of deficit, we are concern about the level of borrowing. But what are the two alternatives. We have two options. One is to fold our arms or go by our internal generated revenue, in this case, we are only able to pay salaries. You have to abandoned infrastructure development, which we cannot afford to do.

“The other option is to borrow. Nigeria is not the only country borrowing. Other countries are borrowing. Nobody prayed for COVID-19. It came, paralyze the economy of nations. Nigerian cannot be exception. We will not support a situation where money is borrowed for consumables.”

Senator Ishaku Abbo said: “Since the 2022 budget is the last budget to be implemented fully by the current administration, it is a budget of recovery following the COVID-19 pandemic.

“So, the 2022 budget is to stimulate economic recovery. By the passage of the PIB, we are confidence that Nigeria will now have more money.

“I believed the budget should be more. I know you will ask about the issue of borrowing. Nigeria is not the only country that borrows money.

“I have no problem with borrowing money as far as the money borrowed is use not to pay salaries but for infrastructure development for our children and grand children that will be coming long after we have gone. America as strong and as big as they are, they borrow.”

Senator Uba Sani said: “We will ensure that all relevant committees do their work. We need to improve oversight. We are here not only to work with the executive but to ensure they do what is right and responsible. Borrowing is not bad in as much as we can build infrastructure.”

Senator Abdullahi Adamu said: “Since the budget is the last budget the present administration will implement fully, the administration will ensure that projects started are completed.

“Every country is borrowing. England is owing over €3 trillion. So, we must borrow about N6 trillion to fund the budget. Every country is borrowing.”

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Full Text: Buhari’s Remarks After Signing 2022 Budget Into Law

Speech by President Muhammadu Buhari at the signing into law of the 2022 Appropriation Bill and the 2021 Finance Bill on Friday at the Presidential Villa in Abuja.

I am delighted to sign into law today the 2022 Appropriation Bill as well as the enabling 2021 Finance Bill.

2. I would like to thank the Senate President, the Speaker of the House of Representatives, and indeed all the Distinguished and Honourable Leaders and Members of the National Assembly for the expeditious consideration and passage of these Bills.

3. I also appreciate the continuing cooperation and commitment of the Ninth National Assembly to the restoration of a predictable January to December fiscal year, as provided for in the Constitution of the Federal Republic of Nigeria.

4. The Finance Bill 2021 is particularly critical for the successful implementation of the 2022 Budget. Its passage further underscores our firm commitment to regularly support federal Appropriation Bills with Finance Bills designed to facilitate their implementation.

5. I equally appreciate the continued mutual understanding, collaboration, and productive engagements between officials of the Executive and the Legislative arms of government which have made this expeditious consideration as well as the passage of the Bills possible.

6. We must continue to sustain this partnership in the interest of our people in order to ensure the effective implementation of the budget and realization of its laudable objectives.

7. As you will recall, I laid the 2022 Appropriation Bill before the Joint Session of the National Assembly on 7th October 2021 and forwarded the 2021 Finance Bill thereafter. This Administration remains committed to the early presentation of the annual appropriation bill to the National Assembly to ensure its passage before the beginning of the fiscal year.

8. As the 2023 Budget is going to be a transition budget, work will start in earnest to ensure early submission of the 2023-2025 Medium-Term Expenditure Framework and Fiscal Strategy Paper as well as the 2023 Appropriation Bill to the National Assembly.

9. Heads of Ministries, Departments and Agencies (MDAs) are to cooperate with the Ministry of Finance, Budget, and National Planning, more specifically with the Budget Office of the Federation, to realize this very important objective.

10. The 2022 Budget that I just signed into law provides for aggregate expenditures of N17.127 trillion, an increase of N735.85 billion over the initial Executive Proposal for a total expenditure of N16.391 trillion. N186.53 billion of the increase however came from additional critical expenditures that I had authorized the Minister of Finance, Budget, and National Planning to forward to the National Assembly. The Minister will provide the public with the details of the budget as passed by the National Assembly, and signed into law by me.

11. As I mentioned during the presentation of the 2022 Appropriation Bill, the fiscal year 2022 is very crucial in our efforts to complete and put to use critical agenda projects, as well as improve the general living conditions of our people.

12. It is in this regard that I must express my reservations about many of the changes that the National Assembly has made to the 2022 Executive Budget proposal.

13. Some of the worrisome changes are as follows:

Increase in projected FGN Independent Revenue by N400 billion, the justification for which is yet to be provided to the Executive;

Reduction in the provision for Sinking Fund to Retire Maturing Bonds by N22 billion without any explanation;

Reduction of the provisions for the Non-Regular Allowances of the Nigerian Police Force and the Nigerian Navy by N15 billion and N5 billion respectively. This is particularly worrisome because personnel cost provisions are based on agencies’ nominal roll and approved salaries/allowances;

Furthermore, an increase of N21.72 billion in the Overhead budgets of some MDAs, while the sum of N1.96 billion was cut from the provision for some MDAs without apparent justification;

Increase in the provision for Capital spending (excluding Capital share in Statutory Transfer) by a net amount of N575.63 billion, from N4.89 trillion to N5.47 trillion. Nevertheless, provisions for some critical projects were reduced.

These include:

Reduction of N12.6 billion in the Ministry of Transport’s budget for the ongoing Rail Modernisation projects,

Reduction of N25.8 billion from Power Sector Reform Programme under the Ministry of Finance, Budget and National Planning, and Reduction of N14.5 billion from several projects of the Ministry of Agriculture, and introducing over 1,500 new projects into the budgets of this Ministry and its agencies.

Inclusion of new provisions totalling N36.59 billion for National Assembly’s projects in the Service Wide Vote which negates the principles of separation of Powers and financial autonomy of the Legislative arm of government.

The changes to the original Executive proposal are in the form of new insertions, outright removals, reductions and/or increases in the amounts allocated to projects.

Provisions made for as many as 10,733 projects were reduced while 6,576 new projects were introduced into the budget by the National Assembly.

Reduction in the provisions for many strategic capital projects to introduce ‘Empowerment’ projects. The cuts in the provisions for several of these projects by the National Assembly may render the projects unimplementable or set back their completion, especially some of this Administration’s strategic capital projects.

Most of the projects inserted relate to matters that are basically the responsibilities of State and Local Governments and do not appear to have been properly conceptualized, designed, and cost.

Many more projects have been added to the budgets of some MDAs with no consideration for the institutional capacity to execute the additional projects and/or for the incremental recurrent expenditure that may be required.

14. It is surprising that despite the National Assembly increasing projected revenue by N609.27 billion, the additional Executive request of N186.53 billion for critical expenditure items could not be accommodated without increasing the deficit, while the sum of N550.59 billion from the projected incremental revenues was allocated at the discretion of National Assembly.

15. I signed the 2022 Appropriation Bill into law to enable its implementation to commence on 1st January 2022. However, I will revert to the National Assembly with a request for amendment and/or virement as soon as the Assembly resumes to ensure that critical ongoing projects that are cardinal to this administration, and those nearing completion, do not suffer a setback due to reduced funding.

16. Despite the lingering adverse effects of COVID-19 on budget implementation, I am happy with the success recorded in the implementation of the 2021 Budget. The sum of N3.94 trillion that was provided for the implementation of capital projects by MDAs during the fiscal year has been released fully.

17. To enable MDAs to complete the implementation of their 2021 capital projects and optimize the impact of the capital budget on the economy, they have been allowed to continue to expend the funds released for their 2021 capital budgets till 31st March 2022. I deeply appreciate the understanding and speedy action of the National Assembly on this matter.

18. As the 2022 Budget will be the last full-year budget to be implemented by our Administration, its effective implementation is very critical for delivering our legacy projects, promoting social inclusion, and strengthening the resilience of the economy.

19. The Ministry of Finance, Budget and National Planning will implement all measures required to ensure timely and targeted release of capital votes. All Ministries, Departments and Agencies are to effect early commencement of project implementation, while ensuring productive use of funds provided for achievement of the objectives set for their sectors.

20. Considering the incidence of new COVID-19 variants globally, we will ensure timely implementation of measures provided for in the 2022 Budget to contain the spread of the virus and protect our people. We continue to count on the collaboration of the State governments in our effort to protect the lives and livelihood of our people.

21. To achieve the laudable objectives of the 2022 Budget, we will further intensify our revenue mobilization efforts. I am optimistic about our ability to finance the budget considering the positive global oil market outlook and the continuing improvement in our non-oil revenues.

22. To achieve our revenue targets, revenue-generating agencies, and indeed all MDAs must ensure prompt and full remittance of collected revenues. Relevant Agencies must also ensure the realization of our crude oil production and export targets. I also appeal to our fellow citizens and the business community at large to fulfill their tax obligations promptly.

23. However, being a deficit budget, the specific Borrowing Plan will be forwarded to the National Assembly shortly. I count on the cooperation of the National Assembly for a quick consideration and approval of the Plan when submitted. All borrowings will be judiciously utilized and invested in our future growth and prosperity.

24. MDAs are to liaise with the Bureau of Public Enterprises and/or the Infrastructure Concession and Regulatory Commission to explore available opportunities for public-private partnerships, concessions as well as climate finance arrangements to fast-track the pace of our infrastructural development.

25. I thank the Minister of Finance, Budget and National Planning, the Minister of State, Budget and National Planning, the Budget Office of the Federation, and all who worked tirelessly and sacrificed so much towards producing the 2022 Appropriation Act that I signed today.

26. Let me conclude by commending the understanding, sacrifice, and resilience of our people during these challenging times. As a Government, we remain committed to improving the general living conditions of our people. We will continue to implement measures aimed at moderating the unintended negative effects of policies on the citizenry.

27. I thank you most sincerely for your kind attention. May God continue to bless the Federal Republic of Nigeria.

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Expert lauds Buhari for early presentation of 2022 Budget proposal to NASS

President Muhammadu Buhari presenting the 2022 budget to the joint session of the National Assembly in Abuja.<br />

A development economist, Dr. Chiwuike Uba, has lauded President Muhammadu Buhari for the early presentation of the 2022 Budget proposal to the joint session of the National Assembly.

The News Agency of Nigeria (NAN) reports that Buhari presented the budget to the National Assembly on Thursday, Oct. 7, about 12 weeks to the end of the year.

Uba, who is the Board Chairman of Amaka Chiwuike-Uba Foundation (ACUF), said this in a statement issued to the News Agency of Nigeria (NAN) on Sunday in Enugu.

According to him, the early presentation of the budget will allow for robust inputs by experts, policy-makers and law-makers as well as considerable adjustments to the fiscal instrument to broaden its scope and delivery capacity.

He said: “the presentation of the 2022 budget proposal to the National Assembly by the President more than two months prior to the start of the next fiscal year is laudable.

“This would give the National Assembly sufficient time to conduct the required legislative review of the budget.

“Most importantly, it will also allow for public consultation and citizen inputs into the budget prior to its passage into the appropriation act.

“Nevertheless, a cursory review of the proposed fiscal parameters shows that the budget proposal reflects the future of past years’ budgets. Yes, the budget is replete with some of the mistakes of the past budgets”.

Uba noted that the parameters of the 2022 budget proposal mirror the budget of recent years, in terms of structure and character, adding that revenue forecasts and budget parameters appear very unrealistic, so the usual credibility problems of previous budgets are likely to shadow the 2022 budget.

The expert said that clearly, as a nation, we are doing little or nothing to cut our clothes in accordance with the materials available, noting that we still have an incremental fiscal structure, regardless of the state of the economy.

Uba reflected that the 2021 budget, which was called the budget of stabilization and economic growth, had so far been unable to meet up to 30 per cent of the government’s fiscal policy objectives.

He said: “At least, according to the government’s half-year report, the economy is yet to witness the desired growth outside the GDP growth statistics.

“The 2021 budget has so far delivered mixed results. There are some commendable positive results, as well as negative results. There is a considerable improvement in the non-oil revenue.

“Nonetheless, the nation’s economic growth and stabilisation seems very weak, with an attendant depletion of accrued savings (external reserves) and other State resources.

“Unlike the 2020 half-year, when the government made a transfer of US$ 250 million to the Nigerian Sovereign Wealth Investment Authority (NSWIA) has received no transfer in 2021.

“External reserves decreased by 10.6 per cent, from US$36.48 billion in December 2020 to US$32.99 billion in June 2021. Trade deficit also increased sharply, reaching around US$4.23 billion.

“Import growth remains very high relative to our export growth rate. Relative to 2020, Nigeria’s trade deficit in the first half of 2021 rose by N3.56 trillion and stood at N5.81 trillion in June 2021.

“With an import growth rate of 60.67 per cent in the first half of 2021, Nigeria’s export growth rate of 26.18 per cent had little or no impact to stabilize or grow the economy”.

The expert said that in the first half of 2021, the Federal Government accumulated an additional public debt of around N4.9 trillion (foreign debt – N897 billion, domestic debt – N1.61 trillion).

Uba said: “Additionally, N2.4 trillion loan was received from the Central Bank of Nigeria (CBN) via Ways and Means Advance.

“It is important to note that the value of the Ways and Means provided to the Federal Government by the CBN violates applicable laws. External debt increased by 8.5 per cent, from N10.95 trillion in December 2020 to N11.85 trillion in June 2021.

“In the same vein, domestic debt increased by 10 per cent, from N16.02 trillion in December 2020 to N17.63 trillion in June 2021,” he said.

He regretted that previous administrations continued to accumulate public debts after the cancellation of the nation’s debt during President Olusegun Obasanjo’s administration.

The economic expert said that since 2015, the public debt of the Federal Government had experienced an annual increase, rising from less than N10 trillon in June 2015 to N29.48 trillion in June 2021.

He said: “Unfortunately, the Federal and state governments seem to be obsessed with the debt-to-GDP ratio, regardless of the debt-to-income ratio.

“It’s untenable and unacceptable for the country to continue borrowing just to finance consumption. Current debt is used mainly for debt servicing and recurrent expenditure rather than capital projects.

“According to the half year budget implementation report, as of June 2021, only 27 per cent (N1.34trillion) of the money from total public debt of N4.9trillion was released to fund capital expenditures (including additional capital expenditures).

“This implies that all the revenue of the government and about 73 per cent of the accumulated public debt in the first half of 2021 was used for debt servicing and also to fund recurrent expenditures.

“The usual expectations are to fund capital projects, especially projects with the ability to repay costs and stimulate economic growth.

“The future of generations to come is gradually mortgaged, without any demonstrable sustainable commitment to policy to stabilize and grow the economy”.

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• 2022 Budget proposal

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Full speech of President Buhari’s 2022 budget presentation

• October 7, 2021

Budget of Economic Growth and Sustainability

Delivered By:

His Excellency, President Muhammadu Buhari

President, Federal Republic of Nigeria

At the Joint Session of the National Assembly, Abuja

Thursday, October 7, 2021

• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• I am sure many of you will be relieved as my last budget speech in October 2020 lasted over fifty minutes.
• 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

• 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 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.
• 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.
• 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.
• 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.
• The Federal Government’s share of Oil revenue totalled 570.23 billion Naira as of July 2021, which was 51 percent below target, while non-oil tax revenues totalled 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.
• 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.
• 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 litre, opposition against the policy of price deregulation hardened on the part of Labour Unions in particular.
• 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.
• 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

• We have stepped up implementation of the strengthened framework for performance management of government owned enterprises (GOEs), with a view to improve 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.
• 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.
• 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.
• I am pleased to inform you that we expect to fund MDAs’ capital budget fully by the end of the fiscal year 2021.
• Capital releases thus far have been prioritised in favour of critical ongoing infrastructural projects in the power, roads, rail, agriculture, health and education sectors.
• 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.
• 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.
• 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.
• 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.
• 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 centres and provision of Personal Protective equipment across 52 Federal Medical Centres and Teaching Hospitals.
• 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.
• The recent passage of the Petroleum Industry Act 2021, and consequent incorporation of the Nigeria National Petroleum Corporation should also result in rationalisation of expenditure, as well as increased investments and improved output in the oil and gas industry.
• 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

• 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.

• The 2022 Appropriation therefore is a Budget of Economic Growth and Sustainability.
• 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.
• 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

• Distinguished Members of the National Assembly, the 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

• Based on these fiscal assumptions and parameters, total federally-collectible revenue is estimated at 17.70 trillion Naira in 2022.
• 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.
• 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

• 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

• 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
• We need to exceed this threshold considering our collective desire to continue tackling the existential security challenges facing our country.
• We plan to finance the deficit mainly by new borrowings totalling 5.01 trillion Naira, 90.73 billion Naira from Privatization Proceeds and 1.16 trillion Naira drawdowns on loans secured for specific development projects.
• 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.
• 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.
• 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 which we are determined to tackle to ensure our debts remain sustainable.
• Very importantly, we have endeavoured to use the loans to finance critical development projects and programmes aimed at improving our economic environment and ensuring 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

• 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.
• 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

• Our strategies to improve revenue mobilisation 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.

• 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

• 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.
• 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.
• 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.
• I wish to assure you of the strong commitment of the Executive to strengthen the relationship with the National Assembly.
• 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.
• 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.
• 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.
• I thank you most sincerely for your attention.
• May God bless the Federal Republic of Nigeria.

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Full text of President Buhari’s 2023 budget presentation

Full text of President Buhari's 2023 budget presentation

President Muhammadu Buhari has presented the 2023 appropriation bill of N20.5trillion to the joint session of the National Assembly.

The budget which is christened “Budget of Fiscal Consolidation and Transition” is the last to be presented by the Buhari Administration.

“I am very pleased to be here today to present the 2023 Budget Proposals at this Joint Session of the National Assembly. This is the last time I will be laying the budget of the Federal Government of Nigeria before the National Assembly,” Buhari said.

The president highlighted the progress his administration has made in last seven and half years in just two important areas of Critical Infrastructure and Good Governance.

He said his administration has made transformational investments in Infrastructure, notably:

a. Establishing the Infrastructure Corporation of Nigeria (‘InfraCorp’), in 2021, seed capital of N1 trillion from the Central Bank of Nigeria (‘CBN’), the Nigeria Sovereign Investment Authority (‘NSIA’) and the Africa Finance Corporation (‘AFC’);

b. Leveraging finance through the NSIA into the Presidential Infrastructure Development Fund (‘PIDF’) to facilitate the accelerated completion of the Second Niger Bridge, Lagos-Ibadan Expressway and Abuja-Kano Road;

c. Through the Road Infrastructure Tax Credit Scheme pursuant to Executive Order #7 of 2019, incentivised responsible companies to invest billions of Naira in constructing over 1,500km critical roads in key economic corridors. Under this Scheme, the Dangote Group has substantially completed the Reconstruction of 34km Apapa-Oworonshoki-Ojota Expressway and the 43km Obajana-Kabba Road. Similarly, Nigeria LNG Limited is on track to complete the 38km Bodo-Bonny Road and Bridges Project by the end of 2023;

d. Under our Sukuk Bonds scheme, since 2017, over N600 billion has been raised and invested in 941km for over 40 critical road projects nationwide, complement the Ministry of Works and Housing’s Highway Development and Management Initiative and other interventions;

e. Investing significantly to restore our national railways, completing and commissioning the 156km Lagos-Ibadan Standard Gauge Rail (and its 8.72km extension to Lagos Port); the 186km Abuja-Kaduna Standard Gauge Rail; and 327km Itakpe-Warri Standard Gauge Rail. These completed projects complement our ongoing investments in Light Rail, Narrow and Standard Gauge Rail, Ancillary Facilities Yards, Wagon Assembly Plants, E-Ticketing infrastructure as well as the training and development of our rail engineers and other workers.

Read the full text below

2023 BUDGET SPEECH: Budget of Fiscal Consolidation and Transition

Delivered By: His Excellency, President Muhammadu Buhari,

President, Federal Republic of Nigeria

At the Joint Session of the National Assembly, Abuja

Friday, 7TH October , 2022

I am very pleased to be here today to present the 2023 Budget Proposals at this Joint Session of the National Assembly. This is the last time I will be laying the budget of the Federal Government of Nigeria before the National Assembly.

2. Mr. President; Mr. Speaker: As I address this Joint Session on the Budget for the last time, let me highlight some of the progress that we have made in last seven and half years, in just two important areas of Critical Infrastructure and Good Governance.

3. We have made transformational investments in Infrastructure, notably:

e. Investing significantly to restore our national railways, completing and commissioning the 156km Lagos-Ibadan Standard Gauge Rail (and its 8.72km extension to Lagos Port); the 186km Abuja-Kaduna Standard Gauge Rail; and 327km Itakpe-Warri Standard Gauge Rail. These completed projects complement our ongoing investments in Light Rail, Narrow and Standard Gauge Rail, Ancillary Facilities Yards, Wagon Assembly Plants, E-Ticketing infrastructure as well as the training and development of our rail engineers and other workers;

f. We have completed New Airport Terminals at Lagos, Abuja, Kano and Port Harcourt, and reconstructed the Abuja Airport Runway in its first overhaul since its construction in the early 1980s.

g. Other investments in airports safety facilities, aeronautical meteorological services delivery complement ongoing development of seaports and ancillary infrastructure at the Lekki Deep Sea Port, Bonny Deep Sea Port, Onitsha River Port, as well as the Kaduna, Kano and Katsina Inland Dry Ports to create a truly multimodal transport system;

h. We have transformed Nigeria’s challenging power sector, through bespoke interventions such as the Siemens Power Program, with the German government under which over 2 billion US Dollars will be invested in the Transmission Grid.

i. We have leveraged over billions of US dollars in concessional and other funds from our partners at the World Bank, International Finance Corporation, African Development Bank, JICA as well as through the Central Bank of Nigeria, working with the Finance Ministry, to support the power sector reforms.

j. The Central Bank has also been impactful in its interventions to roll out over a million meters to on-grid consumers, creating much needed jobs in assembly and installation. Our financing interventions have recently been complemented with the takeover of four electricity distribution companies and the constitution of the Board of the Nigeria Electricity Liability Management Company.

k. On the generation side, we have made significant investments in and incremental 4,000MW of power generating assets, including Zungeru Hydro, Kashimbila Hydro, Afam III Fast Power, Kudenda Kaduna Power Plant, the Okpai Phase 2 Plant, the Dangote Refinery Power Plant, and others.

l. Our generation efforts are making the transition from a reliance on oil and diesel, to gas as a transitional fuel, as well as environmentally friendly solar and hydro sources. Under the Energising Education Programme, we have commissioned solar and gas power solutions at Federal Universities and Teaching Hospitals at Kano, Ebonyi, Bauchi and Delta States. Similarly, our Energising Economies Programme have taken clean, sustainable power solutions to the Sabon-Gari Market in Kano, Ariaria Market in Aba, and Sura Shopping Complex in Lagos.

4. In terms of Good Governance, one significant challenge this Administration met at our inception was the inability of successive Governments to institutionalise reforms to ensure their sustainability. We inherited an archaic set of corporate, banking and capital markets laws; draft but unenacted Bills to reform the critical petroleum sector; an unimplemented Oronsaye White Paper to reform our civil service, amongst others.

5. I was therefore committed, at the onset of this Administration’s Good Governance and Fighting Corruption Reforms, to focus on the much-neglected area of law reform, to bequeath a better legacy to the succeeding Administration, than the one we met. Our innovative, encompassing and historically significant legislative interventions include:

a. Critical corporate and financial laws to enhance our countries’ global competitiveness, including the repeal and re-enactment of Companies and Allied Matters Act (‘CAMA’) 2020 – the first comprehensive reform since 1990; enacting the Federal Competition and Consumer Protection Commission (FCCPC) Bill, the first legislation in Nigeria’s history focused on curbing anti-competition practices; establishing the Federal Competition and Consumer Protection Commission; re-pealing and re-enacting the Banks and Other Financial Institutions Act (BOFIA) 2020; enacting the Asset Management Corporation of Nigeria, AMCON (Amendment) Acts of 2019 and 2021; enacting the Credit Reporting Act (CRA) 2017 and Secured Transactions in Movable Assets Act (STMAA) 2017, to mention our major legislative interventions;

b. Fundamental anti-corruption, anti-money laundering and financial intelligence laws, such as the Nigeria Police Act, 2020 (being the first comprehensive reform of Police legislation since the Police Act of 1943); the Nigerian Financial Intelligence Unit Act 2017 (which resolved the longstanding impediments to Nigeria’s full participation in the global efforts to combat illicit financing of terrorism and crime under the auspices of the global Egmont Group); the Money Laundering (Prevention and Prohibition) Act, 2022; the Terrorism (Prevention and Prohibition) Act 2022, Proceeds of Crime (Recovery and Management) Act, 2022; Mutual Assistance in Criminal Matters Act, 2019; Nigerian Correctional Services Act, 2019; Suppression of Piracy and other Maritime Offences Act, 2019; amongst others.

c. Historic reforms to our Constitutional and other public laws, including the first ever amendments to the Constitution of the Federal Republic of Nigeria to support the engagement of young persons in our politics by passing Not Too Young to Run legislation, as well as to improve the funding and independence of States’ Legislatures and Judiciaries; enacting overdue reforms through the Electoral Act, 2022;

d. Finally enacting into law the Petroleum Industry Act, 2021 after close to two decades of drafting, debates and delays – leading to the commercialization of NNPC Limited, and other much needed reforms to our energy sector. This important law also complements other landmark legislations such as the Deep Offshore and Inland Basin Production Sharing Contracts Act, 1993 (Amendment) Act, 2019, to increase oil and gas revenues accruing to the Federation;

e. Enacting annual Finance Acts of 2019, 2020 and 2021 to support our annual Budgets and respond to emerging tax, fiscal and economic issues, including:

I. reducing headline corporate tax rates for Small and Medium-Sized Enterprises;

II. reforming archaic tax legislation in line with global best practices to combat Base Erosion and Transfer Pricing;

III. reforming the taxation of securities lending and real estate investment trusts to spur increased investments on our capital markets;

IV. empowering the Federal Inland Revenue Service and the Nigeria Customs Service to optimize their use of technology to more efficiently collect taxes and levies; and

V. increasing VAT revenues predominantly to support our States and Local Governments’ precious finances during and after the impact of the COVID-19 Pandemic on the economy;

f. Furthermore, we have issued eleven Presidential Executive Orders on a range of important issues, including the Promotion of Transparency and Efficiency in the Business Environment, 2017;

I. Promoting Local Procurement by Government Agencies, 2017;

II. the Submission of Annual Budgetary Estimates by all Statutory and non-Statutory Agencies, including Incorporated Companies wholly owned by the Federal Government of Nigeria, 2017;

III. the Voluntary Assets and Income Declaration Scheme, 2017;

IV. Planning and Execution of Projects, Promotion of Nigerian Content in Contracts, Science, Engineering and Technology, 2018;

V. the Voluntary Offshore Assets Regularization Scheme (VOARS), 2018;

VI. Open Defecation and enhanced sanitation, 2019;

VII. the innovative Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, 2019; and

VIII. the National Public Buildings Maintenance, 2022.

6. We could not have made these historical achievements without the exceptional partnership this Administration has had with the Leadership, and Members of the National Assembly. So may I pause here, to once again, thank the Senate and the House of Representatives for your engagement, support and contribution to these successes, which history will remember us all favourably for.

RECENT ECONOMIC DEVELOPMENTS

7. The 2023 Budget was prepared amidst a very challenging world economy that is weakened by the lingering effects of the COVID-19 pandemic, high inflation, high crude oil prices resulting in huge cost of PMS Subsidy and negative spill over effects of the Russia-Ukraine war.

8. Many economies around the world are currently contending with fiscal instability, slow growth, food crisis, and high interest rates. Like many other countries, our economy faces headwinds from low revenues, high inflation, exchange rate depreciation and insecurity.

9. However, Nigeria’s real Gross Domestic Product grew by 3.54 percent in the second quarter of 2022, marking the seventh consecutive quarter of growth. Our interventionist and reflationary measures have been very effective and impactful. We must however continue to work towards achieving much higher levels of growth, especially given our high population growth rate, so that the average Nigerian can truly feel the impact of planned economic growth.

10. Distinguished Senators and Honourable Members, despite continuing efforts, unemployment, underemployment, and poverty rates remain high. We are currently implementing several skills development programmes and work opportunity programmes to enhance the employability of our youths and tackle the troubling level of youth unemployment.

11. While it is evident that our economy still faces significant challenges, what could have happened without the implementation of some of the measure we introduced, would have been much worse for the country.

REVIEW OF 2022 BUDGET IMPLEMENTATION

12. Distinguished and Honourable Members of the National Assembly, the implementation of the 2022 ‘Budget of Economic Growth and Sustainability commenced on the first day of the year. It was, however, necessary to forward an amended budget proposal to address some exigent issues, especially the significant increase in fuel subsidy.

13. The amended 2022 Budget was based on a benchmark oil price of 73 US Dollars per barrel, oil production of 1.60 million barrels per day, and exchange rate of 410.15 Naira to US Dollar.

14. As at 31st July 2022, Federal Government’s retained revenues was 3.66 trillion Naira, excluding the revenue of Government-Owned Enterprises. Thus, revenue collection was only 63 percent of our target, largely due to the underperformance of oil and gas revenue sources.

15. Despite higher oil prices in 2022, oil revenue was below target due to significant oil production shortfalls and high petrol subsidy cost resulting from the significant rise in Crude prices which ultimately increased PMS prices worldwide.

16. Oil output stood at an average of 1.30 million barrels per day as at June 2022, while the sum of 1.59 trillion Naira was spent on fuel subsidy between January and June 2022. The NNPC, working in collaboration with security and other relevant agencies, is putting in place additional measures to curb the incidence of pipeline vandalism and crude oil theft in order to meet our crude oil production quota.

17. On the expenditure side, the sum of 8.29 trillion Naira had been spent by July 31 2022 out of the total appropriation of N17.32 trillion. Despite our revenue challenges, we have consistently met our debt service commitments. Staff salaries and statutory transfers have also been paid as and when due.

18. Total non-debt recurrent expenditure in January to July 2002 was 3.24 trillion Naira, of which 2.87 trillion Naira was for Salaries, Pensions and Overheads. A total of 3.09 trillion Naira was spent on debt service obligations during the period.

19. Furthermore, about 1.48 trillion Naira had been released to MDAs for capital expenditure as at the end of July 2022. I am pleased to inform you that we expect to fund MDAs’ capital budget fully by the end of the fiscal year 2022.

20. To further address structural problems in the economy and drive growth, capital releases thus far have been prioritised in favour of critical ongoing projects in the power, roads, rail, agriculture, as well as health and education sectors.

21. As at the end of July 2022, the fiscal operations of the Federal Government resulted in an estimated budget deficit of 4.63 trillion Naira. This represents 63 percent of the estimated deficit for the full year. This is largely attributable to revenue shortfalls and higher debt service obligations resulting from rising debt levels and interest rates.

22. The deficit was mainly financed through domestic borrowing amounting to N4.12 trillion. Hence, total public debt stock increased from 39.6 trillion Naira as at the end of December 2021 to 42.8 trillion Naira as at the end of June, 2022.

23. However, our debt position remains within cautious and acceptable limits compared to peer countries. As at the end of June 2022, total public debt is within our self-imposed limit of 40 percent of GDP, which is significantly below the 55 percent international threshold for comparator countries, and a global average of 99 percent post-COVID-19.

24. Nonetheless, our debt-service-to-revenue ratio needs close attention. The current low revenue performance of government, as reflected in the lowly revenue-to-GDP ratio of just about 8 percent. Our medium-term objective remains to raise this ratio to 15 percent, at which the debt service to revenue ratio will cease to be a concern.

25. Mr. Senate President and Rt. Honourable Speaker, revenue shortfalls remain the greatest threat to Nigeria’s fiscal viability. We have therefore accelerated efforts towards ensuring that all taxable Nigerians declare income from all sources and pay taxes due to the appropriate authorities. We are also monitoring the internally generated revenues of MDAs to ensure they are appropriately accounted for and remitted to the Consolidated Revenue Fund.

26. The 50 percent cost-to-income ratio in the Finance Act 2020 has significantly improved operating surplus remittances by Government Owned Enterprises (GOEs). I therefore solicit the continuing cooperation of the National Assembly in enforcing the legal provision and other prudential guidelines imposed on the GOEs during the consideration of the budget proposals of the GOEs.

27. I am happy to report that the revenue collection and expenditure management reforms we are implementing are yielding positive results, with recent significant improvements in non-oil revenue performance. However, while we continue to implement revenue administration reforms and improve our collection efficiency, we urgently need to find new ways of generating revenue.

28. As we seek to grow our government revenues, we must also focus on the efficiency of utilization of our limited resources. Critical steps we are taking include immediate implementation of additional measures towards reducing the cost of governance and the discontinuation of fuel subsidy in 2023 as announced earlier. We are however mindful of the fact that reducing government spending too drastically can be socially destabilizing, and so will continue to implement programmes to support the more vulnerable segments of society.

29. Petrol subsidy has been a recurring and controversial public policy issue in our country since the early eighties. However, its current fiscal impact has clearly shown that the policy is unsustainable. As a country, we must now confront this issue taking cognizance of the need to provide safety nets to cushion the attendant effects on some segments of society.

RECENT ACHIEVEMENTS

30. Over the last year, this Administration has implemented several priority projects. Our focus has been on the completion of key road and rail projects; the effective implementation of power sector projects; the provision of clean water; construction of irrigation infrastructure and dams across the country; and critical health projects such as upgrading Primary Health Care Centres across the six geopolitical zones.

31. We have also gone further on the implementation of 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.

32. In the determination to ramp up grid electricity supply to at least 7,000 megawatts by 2024, we have procured purpose-built critical power equipment under the Presidential Power Initiative with Siemens as we promised. These projects will have multiplier effects on the economy.

33. Under the Road Infrastructure Tax Credit Scheme, we are undertaking the construction and rehabilitation of about two thousand kilometres of roads and bridges, nationwide, to be financed by the grant of tax credits to investing private companies.

34. As I mentioned earlier, we have made appreciable progress in the rehabilitation and reconstruction of key road networks like the Lagos – Ibadan expressway, Abuja-Kaduna-Kano expressway and East-West Road in Niger Delta. Work has also reached completion stage on the Apapa – Oworonsoki expressway, Loko-Oweto Bridge and the Second Niger Bridge. We hope to commission these projects before the end of our tenure in 2023.

35. Furthermore, we have awarded several contracts to rehabilitate, reconstruct and construct major arterial roads to reduce the hardship to commuters and increase economic activity.

36. Regarding personnel costs, we have extended the coverage of the Integrated Payroll and Personnel Information System (IPPIS) to all MDAs to automate personnel records and the process by which salaries are paid and eliminate the incidence of ghost workers. The system is currently being reviewed to enhance its functionality and applicability to MDAs in the different sectors.

37. Distinguished Senators and Honourable Members, although we have recorded more achievements over the last year, I will now proceed with an overview of the 2023 Budget proposal.

THEME AND PRIORITIES OF THE 2023 BUDGET

38. The 2023 Budget proposal is the eighth and final budget of this Administration. It reflects the serious challenges currently facing our country, key reforms necessary to address them, and imperatives to achieve higher, more inclusive, diversified and sustainable growth.

39. The expenditure policy of Government in 2023 is designed to achieve the strategic objectives of the National Development Plan 2021 to 2025, including macroeconomic stability; human development; food security; improved business environment; energy sufficiency; improving transport infrastructure; and promoting industrialization focusing on Small and Medium Scale Enterprises.

40. Against the backdrop of the challenging global and domestic economic environment, it is imperative that we strengthen our macroeconomic environment and address subsisting challenges as a country. The 2023 Appropriation therefore is a Budget of Fiscal Sustainability and Transition. Our principal objective in 2023 is to maintain fiscal viability and ensure smooth transition to the incoming Administration.

2023 BUDGET PARAMETERS AND FISCAL ASSUMPTIONS

41. Distinguished Members of the National Assembly, the 2023 to 2025 Medium Term Expenditure Framework and Fiscal Strategy Paper sets out the parameters for the 2023 Budget as follows:

a. Oil price benchmark of 70 US Dollars per barrel;

b. Daily oil production estimate of 1.69 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day);

c. Exchange rate of 435.57 Naira per US Dollar; and

d. Projected GDP growth rate of 3.75 percent and 17.16 percent inflation rate.

2023 REVENUE ESTIMATES

42. Based on these fiscal assumptions and parameters, total federally-collectible revenue is estimated at 16.87 trillion Naira in 2023.

43. Total federally distributable revenue is estimated at 11.09 trillion Naira in 2023, while total revenue available to fund the 2023 Federal Budget is estimated at 9.73 trillion Naira. This includes the revenues of 63 Government-Owned Enterprises.

44. Oil revenue is projected at 1.92 trillion Naira, Non-oil taxes are estimated at 2.43 trillion Naira, FGN Independent revenues are projected to be 2.21 trillion Naira. Other revenues total 762 billion Naira, while the retained revenues of the GOEs amount to N2.42 trillion Naira.

45. The 2023 Appropriation Bill aims to maintain the focus of MDAs on the revenue side of the budget and greater attention to internal revenue generation. Sustenance of revenue diversification strategy would further increase the non-oil revenue share of total revenues.

PLANNED 2023 EXPENDITURE

46. A total expenditure of 20.51 trillion Naira is proposed for the Federal Government in 2023. This includes 2.42 trillion Naira spending by Government-Owned Enterprises. The proposed 20.51 trillion Naira 2023 expenditure comprises:

a. Statutory Transfers of N744.11 billion;

b. Non-debt Recurrent Costs of N8.27 trillion;

c. Personnel Costs of N4.99 trillion;

d. Pensions, Gratuities and Retirees’ Benefits of N854.8 billion;

e. Overheads of N1.11 trillion;

f. Capital Expenditure of N5.35 trillion, including the capital component of Statutory Transfers;

g. Debt Service of N6.31 trillion; and

h. Sinking Fund of N247.73 billion to retire certain maturing bonds.

FISCAL BALANCE

47. We expect total fiscal operations of the Federal Government to result in a deficit of 10.78 trillion Naira. This represents 4.78 percent of estimated GDP, above the 3 percent threshold set by the Fiscal Responsibility Act 2007.

48. As envisaged by the law, we need to exceed this threshold considering the need to continue to tackle the existential security challenges facing the country.

49. We plan to finance the deficit mainly by new borrowings totalling 8.80 trillion Naira, 206.18 billion Naira from Privatization Proceeds and 1.77 trillion Naira drawdowns on bilateral/multilateral loans secured for specific development projects/programmes.

50. Over time, we have resorted to borrowing to finance our fiscal gaps. We have been using loans to finance critical development projects and programmes aimed at further improving our economic environment and enhance the delivery of public services to our people.

51. As you are aware, we have witnessed two economic recessions within the period of this Administration. A direct result of this is the significant decline in our revenue generating capacity.

52. In both cases, we had to spend our way out of recession, resulting in higher public debt and debt service. It is unlikely that our recovery from each of the two recessions would have been as fast without the sustained government expenditure funded by debt.

FINANCE BILL 2022

53. 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/regulations are being reviewed to produce a draft Finance Bill 2022.

54. It is our intention that once ongoing consultations are completed, the Finance Bill 2022 would be submitted to the National Assembly to be considered alongside the 2023 Appropriation Bill.

ENSURING FISCAL SUSTAINABILITY

55. To ensure fiscal sustainability, we will further improve our business-enabling environment, accelerate current revenue-based fiscal consolidation efforts and strengthen our expenditure and debt management.

BUDGET OF GOVERNMENT-OWNED ENTERPRISES

56. Distinguished Senators, Honourable Members, you may recall that we earlier integrated the budget of Government-Owned Enterprises into the FGN’s 2019 budget submission. This has helped to enhance the comprehensiveness and transparency of the FGN budget. It has however come to my attention that Government-Owned Enterprises liaise directly with relevant NASS committees to have their budget passed and issued to them directly.

57. I would like to implore the leadership of the National Assembly to ensure that the budget I lay here today, which includes those of the GOEs, be returned to the Presidency when passed. The current practice where some committees of the National Assembly purport to pass budgets for GOEs, which are at variance with the budgets sanctioned by me, and communicate such directly to the MDAs is against the rules and needs to stop.

FINANCING INFRASTRUCTURE GAP

58. Nigeria requires a huge outlay of resources to close current infrastructure gaps and boost its economic performance. Government will develop projects that are good candidates for Public Private Partnership (PPP) by their nature for private sector participation.

BUDGET PROCESS BILL 2022

59. Distinguished Senators, Honourable Members, ladies and gentlemen. Over the course of this Administration, we have embarked on a number of reforms in the Public Finance Management space. These reforms are bearing fruits and we have seen some of the benefits of the return to a predictable January to December fiscal year for the FGN budget.

60. Earlier this year, I was briefed of the impressive performance of Nigeria in the Open Budget Survey, as the third best or most improved country in the world, matching the global average score in budget transparency and exceeding the global average in public participation.

61. I commend the Budget Office of the Federation and the Supervising Ministry of Finance Budget and National Planning, the National Assembly Leadership, the relevant Appropriation and Finance Committees as well as non-state actors who have worked tirelessly in pushing for greater transparency and accountability in our budget process.

62. We need to sustain and institutionalize the gains of these reforms. To this end, I have directed the Minister of Finance, Budget and National Planning to immediately work on mainstreaming these reforms and work with the National Assembly on passing an Organic Budget Law, which I hope to assent to before the end of this Administration.

HUMAN CAPITAL DEVELOPMENT

63. The Government notes with dismay the crisis that has paralysed activities in the public universities in the country. We expect the staff of these institutions to show a better appreciation of the current state of affairs in the country. In the determined effort to resolve the issue, we have provided a total of 470.0 billion in the 2023 budget from our constrained resources, for revitalization and salary enhancements in the tertiary institutions.

64. Distinguished Senators and Honourable members, it is instructive to note that today Government alone cannot provide the resources required for funding tertiary education.

65. In most countries, the cost of education is jointly shared between the government and the people, especially at the tertiary level. It is imperative therefore that we introduce a more sustainable model of funding tertiary education.

66. The Government remains committed to the implementation of agreements reached with staff unions within available resources. This is why we have remained resolute that we will not sign any agreement that we would be unable to implement. Individual institutions would be encouraged to keep faith with any agreement reached in due course to ensure stability in the educational sector.

67. Government is equally committed to improving the quality of education at other levels. Recently, we implemented various incentives aimed at motivating and enhancing teachers’ development in our schools.

68. In the health sector, the Government intends to focus attention on equipping existing hospitals and rehabilitating infrastructure. Emphasis will also be on local production of basic medicines/vaccines.

69. As human capital is the most critical resource for national development, our overall policy thrust is to expand our investment in education, health and social protection.

WOMEN’S EMPOWERMENT

70. To harness the potentials of all Nigerian women and enable them to productively contribute to the economy, we will continue to prioritise women’s empowerment programmes across various MDAs in 2023.

FOOD PRICES

71. Government is very concerned about the high food prices in the country. Various measures are being implemented to address structural factors underlying the issue. We will also step-up current efforts aimed at boosting food production and distribution in the country. You will recall our efforts in improving production of fertilizer, rice, maize cassava among other earlier initiatives.

BOOSTING MANUFACTURING PERFORMANCE

72. Government is not unaware of the challenges confronting the manufacturing sector. We will ensure effective implementation of policy measures aimed at positioning the manufacturing sector to generate more foreign exchange in the near future. We are also committed to improving the business environment to stimulate local and foreign investment.

SAFE SCHOOLS INITIATIVE

73. We ratified the Safe Schools Declaration in 2019. We remain committed to the effective implementation of our Safe Schools Policy. A total of 15.2 billion Naira has been specifically provided in the 2023 Budget to scale up current measures to provide safer and conducive learning environment in our schools.

DEFENCE AND INTERNAL SECURITY

74. The Government remains firmly committed to the security of life, property and investment across the country. Accordingly, defence and internal security continue to be accorded top priority in 2023. Current efforts to properly equip and motivate our valiant personnel in the armed forces, police and paramilitary units will be sustained.

75. I assure you, insecurity, especially banditry and kidnapping, will be significantly curtailed before the end of this Administration. We will redouble our efforts to ensure we leave a legacy of a peaceful, prosperous and secured nation.

76. Mr. Senate President, Mr. Speaker, Distinguished and Honourable Members of the National Assembly, let me conclude my address today by again expressing my deep appreciation for your enormous support, patriotic zeal, and cooperation in our efforts to accelerate the socio-economic development of our country and improve the lives of our people.

77. I appreciate the efforts and commitment of the leadership and staff of the Federal Ministry of Finance, Budget and National Planning, especially the Budget Office of the Federation, who have worked hard to achieve early submission of the 2023 Appropriation Bill.

78. The 2023 budget proposal is a product of inter-agency collaboration, extensive stakeholder consultations and productive engagements. I would therefore like to acknowledge the efforts of the media, the organized private sector, civil society organizations and our development partners for their contributions in the process of preparing the Budget.

79. Considering the challenging situation in our country presently, we must continue to cooperate and collaborate to ensure fiscal sustainability, macroeconomic stability and smooth transition to the incoming Administration.

80. This Administration remains resolutely committed to our goals of improving the living standard of our people and effective delivery of public services.

81. Distinguished and honourable members of the National Assembly, although no single government can solve all the problems of a country during its own tenure, I have no doubt that you share our aspiration that the 2023 transition budget is designed to address critical issues and lay a solid foundation for the incoming Administration.

82. It is with great pleasure therefore, that I lay before this distinguished Joint Session of the National Assembly, the 2023 Budget Proposals of the Federal Government of Nigeria.

I thank you most sincerely for your attention. May God bless the Federal Republic of Nigeria.

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2023 budget presentation: See President Buhari’s full speech

Budget of Fiscal Consolidation and Transition

Delivered By:

His Excellency, President Muhammadu Buhari, President, Federal Republic of Nigeria At the Joint Session of the National Assembly, Abuja. Friday, 7TH October 2022

I am very pleased to be here today to present the 2023 Budget Proposals at this Joint Session of the National Assembly. This is the last time I will be laying the budget of the Federal Government of Nigeria before the National Assembly.

• Mr. President; Mr. Speaker: As I address this Joint Session on the Budget for the last time, let me highlight some of the progress that we have made in the last seven and half years, in just two important areas of Critical Infrastructure and Good Governance.
• We have made transformational investments in Infrastructure, notably: a. Establishing the Infrastructure Corporation of Nigeria (‘InfraCorp’), in 2021, seed capital of N1 trillion from the Central Bank of Nigeria (‘CBN’), the Nigeria Sovereign Investment Authority (‘NSIA’) and the Africa Finance Corporation (‘AFC’); b. Leveraging finance through the NSIA into the Presidential Infrastructure Development Fund (‘PIDF’) to facilitate the accelerated completion of the Second Niger Bridge, Lagos-Ibadan Expressway and Abuja-Kano Road; c. Through the Road Infrastructure Tax Credit Scheme pursuant to Executive Order #7 of 2019, incentivised responsible companies to invest billions of Naira in constructing over 1,500km critical roads in key economic corridors. Under this Scheme, the Dangote Group has substantially completed the Reconstruction of 34km Apapa-Oworonshoki-Ojota Expressway and the 43km Obajana-Kabba Road. Similarly, Nigeria LNG Limited is on track to complete the 38km Bodo-Bonny Road and Bridges Project by the end of 2023; d. Under our Sukuk Bonds scheme, since 2017, over N600 billion has been raised and invested in 941km for over 40 critical road projects nationwide, complement the Ministry of Works and Housing’s Highway Development and Management Initiative and other interventions; e. Investing significantly to restore our national railways, completing and commissioning the 156km Lagos-Ibadan Standard Gauge Rail (and its 8.72km extension to Lagos Port); the 186km Abuja-Kaduna Standard Gauge Rail; and 327km Itakpe-Warri Standard Gauge Rail. These completed projects complement our ongoing investments in Light Rail, Narrow and Standard Gauge Rail, Ancillary Facilities Yards, Wagon Assembly Plants, E-Ticketing infrastructure as well as the training and development of our rail engineers and other workers; f. We have completed New Airport Terminals at Lagos, Abuja, Kano and Port Harcourt, and reconstructed the Abuja Airport Runway in its first overhaul since its construction in the early 1980s. g. Other investments in airports safety facilities, aeronautical meteorological services delivery complement ongoing development of seaports and ancillary infrastructure at the Lekki Deep Sea Port, Bonny Deep Sea Port, Onitsha River Port, as well as the Kaduna, Kano and Katsina Inland Dry Ports to create a truly multimodal transport system;

h. We have transformed Nigeria’s challenging power sector, through bespoke interventions such as the Siemens Power Program, with the German government under which over 2 billion US Dollars will be invested in the Transmission Grid. i. We have leveraged over billions of US dollars in concessional and other funds from our partners at the World Bank, International Finance Corporation, African Development Bank, JICA as well as through the Central Bank of Nigeria, working with the Finance Ministry, to support the power sector reforms. j. The Central Bank has also been impactful in its interventions to roll out over a million meters to on-grid consumers, creating much needed jobs in assembly and installation. Our financing interventions have recently been complemented with the takeover of four electricity distribution companies and the constitution of the Board of the Nigeria Electricity Liability Management Company. k. On the generation side, we have made significant investments in and incremental 4,000MW of power generating assets, including Zungeru Hydro, Kashimbila Hydro, Afam III Fast Power, Kudenda Kaduna Power Plant, the Okpai Phase 2 Plant, the Dangote Refinery Power Plant, and others. l. Our generation efforts are making the transition from a reliance on oil and diesel, to gas as a transitional fuel, as well as environmentally friendly solar and hydro sources. Under the Energising Education Programme, we have commissioned solar and gas power solutions at Federal Universities and Teaching Hospitals at Kano, Ebonyi, Bauchi and Delta States. Similarly, our Energising Economies Programme has taken clean, sustainable power solutions to the Sabon-Gari Market in Kano, Ariaria Market in Aba, and Sura Shopping Complex in Lagos.

• In terms of Good Governance, one significant challenge this Administration met at our inception was the inability of successive Governments to institutionalise reforms to ensure their sustainability. We inherited an archaic set of corporate, banking and capital markets laws; draft but unenacted Bills to reform the critical petroleum sector; an unimplemented Oronsaye White Paper to reform our civil service, amongst others.
• I was therefore committed, at the onset of this Administration’s Good Governance and Fighting Corruption Reforms, to focus on the much-neglected area of law reform, to bequeath a better legacy to the succeeding Administration, than the one we met. Our innovative, encompassing and historically significant legislative interventions include: a. Critical corporate and financial laws to enhance our countries’ global competitiveness, including the repeal and re-enactment of Companies and Allied Matters Act (‘CAMA’) 2020 – the first comprehensive reform since 1990; enacting the Federal Competition and Consumer Protection Commission (FCCPC) Bill, the first legislation in Nigeria’s history focused on curbing anti-competition practices; establishing the Federal Competition and Consumer Protection Commission; re-pealing and re-enacting the Banks and Other Financial Institutions Act (BOFIA) 2020; enacting the Asset Management Corporation of Nigeria, AMCON (Amendment) Acts of 2019 and 2021; enacting the Credit Reporting Act (CRA) 2017 and Secured Transactions in Movable Assets Act (STMAA) 2017, to mention our major legislative interventions; b. Fundamental anti-corruption, anti-money laundering and financial intelligence laws, such as the Nigeria Police Act, 2020 (being the first comprehensive reform of Police legislation since the Police Act of 1943); the Nigerian Financial Intelligence Unit Act 2017 (which resolved the longstanding impediments to Nigeria’s full participation in the global efforts to combat illicit financing of terrorism and crime under the auspices of the global Egmont Group); the Money Laundering (Prevention and Prohibition) Act, 2022; the Terrorism (Prevention and Prohibition) Act 2022, Proceeds of Crime (Recovery and Management) Act, 2022; Mutual Assistance in Criminal Matters Act, 2019; Nigerian Correctional Services Act, 2019; Suppression of Piracy and other Maritime Offences Act, 2019; amongst others. c. Historic reforms to our Constitutional and other public laws, including the first ever amendments to the Constitution of the Federal Republic of Nigeria to support the engagement of young persons in our politics by passing Not Too Young to Run legislation, as well as to improve the funding and independence of States’ Legislatures and Judiciaries; enacting overdue reforms through the Electoral Act, 2022; d. Finally enacting into law the Petroleum Industry Act, 2021 after close to two decades of drafting, debates and delays – leading to the commercialization of NNPC Limited, and other much needed reforms to our energy sector. This important law also complements other landmark legislations such as the Deep Offshore and Inland Basin Production Sharing Contracts Act, 1993 (Amendment) Act, 2019, to increase oil and gas revenues accruing to the Federation; e. Enacting annual Finance Acts of 2019, 2020 and 2021 to support our annual Budgets and respond to emerging tax, fiscal and economic issues, including: I. reducing headline corporate tax rates for Small and Medium-Sized Enterprises; II. reforming archaic tax legislation in line with global best practices to combat Base Erosion and Transfer Pricing; III. reforming the taxation of securities lending and real estate investment trusts to spur increased investments on our capital markets; IV. empowering the Federal Inland Revenue Service and the Nigeria Customs Service to optimize their use of technology to more efficiently collect taxes and levies; and V. increasing VAT revenues predominantly to support our States and Local Governments’ precious finances during and after the impact of the COVID-19 Pandemic on the economy; f. Furthermore, we have issued eleven Presidential Executive Orders on a range of important issues, including the Promotion of Transparency and Efficiency in the Business Environment, 2017; I. Promoting Local Procurement by Government Agencies, 2017; II. the Submission of Annual Budgetary Estimates by all Statutory and non-Statutory Agencies, including Incorporated Companies wholly owned by the Federal Government of Nigeria, 2017; III. the Voluntary Assets and Income Declaration Scheme, 2017; IV. Planning and Execution of Projects, Promotion of Nigerian Content in Contracts, Science, Engineering and Technology, 2018; V. the Voluntary Offshore Assets Regularization Scheme (VOARS), 2018; VI. Open Defecation and enhanced sanitation, 2019; VII. the innovative Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, 2019; and VIII. the National Public Buildings Maintenance, 2022.
• We could not have made these historical achievements without the exceptional partnership this Administration has had with the Leadership, and Members of the National Assembly. So may I pause here, to once again, thank the Senate and the House of Representatives for your engagement, support and contribution to these successes, which history will remember us all favourably for.

RECENT ECONOMIC DEVELOPMENTS

• The 2023 Budget was prepared amidst a very challenging world economy that is weakened by the lingering effects of the COVID-19 pandemic, high inflation, high crude oil prices resulting in huge cost of PMS Subsidy and negative spill over effects of the Russia-Ukraine war.
• Many economies around the world are currently contending with fiscal instability, slow growth, food crisis, and high interest rates. Like many other countries, our economy faces headwinds from low revenues, high inflation, exchange rate depreciation and insecurity.
• However, Nigeria’s real Gross Domestic Product grew by 3.54 percent in the second quarter of 2022, marking the seventh consecutive quarter of growth. Our interventionist and reflationary measures have been very effective and impactful. We must however continue to work towards achieving much higher levels of growth, especially given our high population growth rate, so that the average Nigerian can truly feel the impact of planned economic growth.
• Distinguished Senators and Honourable Members, despite continuing efforts, unemployment, underemployment, and poverty rates remain high. We are currently implementing several skills development programmes and work opportunity programmes to enhance the employability of our youths and tackle the troubling level of youth unemployment.
• While it is evident that our economy still faces significant challenges, what could have happened without the implementation of some of the measure we introduced, would have been much worse for the country. REVIEW OF 2022 BUDGET IMPLEMENTATION
• Distinguished and Honourable Members of the National Assembly, the implementation of the 2022 ‘Budget of Economic Growth and Sustainability commenced on the first day of the year. It was, however, necessary to forward an amended budget proposal to address some exigent issues, especially the significant increase in fuel subsidy.
• The amended 2022 Budget was based on a benchmark oil price of 73 US Dollars per barrel, oil production of 1.60 million barrels per day, and exchange rate of 410.15 Naira to US Dollar.
• As at 31st July 2022, Federal Government’s retained revenues was 3.66 trillion Naira, excluding the revenue of Government-Owned Enterprises. Thus, revenue collection was only 63 percent of our target, largely due to the underperformance of oil and gas revenue sources.
• Despite higher oil prices in 2022, oil revenue was below target due to significant oil production shortfalls and high petrol subsidy cost resulting from the significant rise in Crude prices which ultimately increased PMS prices worldwide.
• Oil output stood at an average of 1.30 million barrels per day as at June 2022, while the sum of 1.59 trillion Naira was spent on fuel subsidy between January and June 2022. The NNPC, working in collaboration with security and other relevant agencies, is putting in place additional measures to curb the incidence of pipeline vandalism and crude oil theft in order to meet our crude oil production quota.
• On the expenditure side, the sum of 8.29 trillion Naira had been spent by July 31 2022 out of the total appropriation of N17.32 trillion. Despite our revenue challenges, we have consistently met our debt service commitments. Staff salaries and statutory transfers have also been paid as and when due.
• Total non-debt recurrent expenditure in January to July 2002 was 3.24 trillion Naira, of which 2.87 trillion Naira was for Salaries, Pensions and Overheads. A total of 3.09 trillion Naira was spent on debt service obligations during the period.
• Furthermore, about 1.48 trillion Naira had been released to MDAs for capital expenditure as at the end of July 2022. I am pleased to inform you that we expect to fund MDAs’ capital budget fully by the end of the fiscal year 2022.
• To further address structural problems in the economy and drive growth, capital releases thus far have been prioritized in favour of critical ongoing projects in the power, roads, rail, agriculture, as well as health, and education sectors.
• As at the end of July 2022, the fiscal operations of the Federal Government resulted in an estimated budget deficit of 4.63 trillion Naira. This represents 63 percent of the estimated deficit for the full year. This is largely attributable to revenue shortfalls and higher debt service obligations resulting from rising debt levels and interest rates.
• The deficit was mainly financed through domestic borrowing amounting to N4.12 trillion. Hence, total public debt stock increased from 39.6 trillion Naira as at the end of December 2021 to 42.8 trillion Naira as at the end of June, 2022.
• However, our debt position remains within cautious and acceptable limits compared to peer countries. As at the end of June 2022, total public debt is within our self-imposed limit of 40 percent of GDP, which is significantly below the 55 percent international threshold for comparator countries, and a global average of 99 percent post-COVID-19.
• Nonetheless, our debt-service-to-revenue ratio needs close attention. The current low revenue performance of government, as reflected in the lowly revenue-to-GDP ratio of just about 8 percent. Our medium-term objective remains to raise this ratio to 15 percent, at which the debt service to revenue ratio will cease to be a concern.
• Mr. Senate President and Rt. Honourable Speaker, revenue shortfalls remain the greatest threat to Nigeria’s fiscal viability. We have therefore accelerated efforts towards ensuring that all taxable Nigerians declare income from all sources and pay taxes due to the appropriate authorities. We are also monitoring the internally generated revenues of MDAs to ensure they are appropriately accounted for and remitted to the Consolidated Revenue Fund.
• The 50 percent cost-to-income ratio in the Finance Act 2020 has significantly improved operating surplus remittances by Government Owned Enterprises (GOEs). I therefore solicit the continuing cooperation of the National Assembly in enforcing the legal provision and other prudential guidelines imposed on the GOEs during the consideration of the budget proposals of the GOEs.
• I am happy to report that the revenue collection and expenditure management reforms we are implementing are yielding positive results, with recent significant improvements in non-oil revenue performance. However, while we continue to implement revenue administration reforms and improve our collection efficiency, we urgently need to find new ways of generating revenue.
• As we seek to grow our government revenues, we must also focus on the efficiency of utilization of our limited resources. Critical steps we are taking include immediate implementation of additional measures towards reducing the cost of governance and the discontinuation of fuel subsidy in 2023 as announced earlier. We are however mindful of the fact that reducing government spending too drastically can be socially destabilizing, and so will continue to implement programmes to support the more vulnerable segments of society.
• Petrol subsidy has been a recurring and controversial public policy issue in our country since the early eighties. However, its current fiscal impact has clearly shown that the policy is unsustainable. As a country, we must now confront this issue taking cognizance of the need to provide safety nets to cushion the attendant effects on some segments of society.

RECENT ACHIEVEMENTS

• Over the last year, this Administration has implemented several priority projects. Our focus has been on the completion of key road and rail projects; the effective implementation of power sector projects; the provision of clean water; construction of irrigation infrastructure and dams across the country; and critical health projects such as upgrading Primary Health Care Centres across the six geopolitical zones.
• We have also gone further on the implementation of 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.
• In the determination to ramp up grid electricity supply to at least 7,000 megawatts by 2024, we have procured purpose-built critical power equipment under the Presidential Power Initiative with Siemens as we promised. These projects will have multiplier effects on the economy.
• Under the Road Infrastructure Tax Credit Scheme, we are undertaking the construction and rehabilitation of about two thousand kilometres of roads and bridges, nationwide, to be financed by the grant of tax credits to investing private companies.
• As I mentioned earlier, we have made appreciable progress in the rehabilitation and reconstruction of key road networks like the Lagos – Ibadan expressway, Abuja-Kaduna-Kano expressway and East-West Road in Niger Delta. Work has also reached completion stage on the Apapa – Oworonsoki expressway, Loko-Oweto Bridge and the Second Niger Bridge. We hope to commission these projects before the end of our tenure in 2023.
• Furthermore, we have awarded several contracts to rehabilitate, reconstruct and construct major arterial roads to reduce the hardship to commuters and increase economic activity.
• Regarding personnel costs, we have extended the coverage of the Integrated Payroll and Personnel Information System (IPPIS) to all MDAs to automate personnel records and the process by which salaries are paid and eliminate the incidence of ghost workers. The system is currently being reviewed to enhance its functionality and applicability to MDAs in the different sectors.
• Distinguished Senators and Honourable Members, although we have recorded more achievements over the last year, I will now proceed with an overview of the 2023 Budget proposal. THEME AND PRIORITIES OF THE 2023 BUDGET
• The 2023 Budget proposal is the eighth and final budget of this Administration. It reflects the serious challenges currently facing our country, key reforms necessary to address them, and imperatives to achieve higher, more inclusive, diversified and sustainable growth.
• The expenditure policy of Government in 2023 is designed to achieve the strategic objectives of the National Development Plan 2021 to 2025, including macroeconomic stability; human development; food security; improved business environment; energy sufficiency; improving transport infrastructure; and promoting industrialization focusing on Small and Medium Scale Enterprises.
• Against the backdrop of the challenging global and domestic economic environment, it is imperative that we strengthen our macroeconomic environment and address subsisting challenges as a country. The 2023 Appropriation therefore is a Budget of Fiscal Sustainability and Transition. Our principal objective in 2023 is to maintain fiscal viability and ensure smooth transition to the incoming Administration.

2023 BUDGET PARAMETERS AND FISCAL ASSUMPTIONS

• Distinguished Members of the National Assembly, the 2023 to 2025 Medium Term Expenditure Framework and Fiscal Strategy Paper sets out the parameters for the 2023 Budget as follows: a. Oil price benchmark of 70 US Dollars per barrel; b. Daily oil production estimate of 1.69 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day); c. Exchange rate of 435.57 Naira per US Dollar; and d. Projected GDP growth rate of 3.75 percent and 17.16 percent inflation rate. 2023 REVENUE ESTIMATES
• Based on these fiscal assumptions and parameters, total federally-collectible revenue is estimated at 16.87 trillion Naira in 2023.
• Total federally distributable revenue is estimated at 11.09 trillion Naira in 2023, while total revenue available to fund the 2023 Federal Budget is estimated at 9.73 trillion Naira. This includes the revenues of 63 Government-Owned Enterprises.
• Oil revenue is projected at 1.92 trillion Naira, Non-oil taxes are estimated at 2.43 trillion Naira, FGN Independent revenues are projected to be 2.21 trillion Naira. Other revenues total 762 billion Naira, while the retained revenues of the GOEs amount to N2.42 trillion Naira.
• The 2023 Appropriation Bill aims to maintain the focus of MDAs on the revenue side of the budget and greater attention to internal revenue generation. Sustenance of revenue diversification strategy would further increase the non-oil revenue share of total revenues.

PLANNED 2023 EXPENDITURE

• A total expenditure of 20.51 trillion Naira is proposed for the Federal Government in 2023. This includes 2.42 trillion Naira spending by Government-Owned Enterprises. The proposed 20.51 trillion Naira 2023 expenditure comprises: a. Statutory Transfers of N744.11 billion; b. Non-debt Recurrent Costs of N8.27 trillion; c. Personnel Costs of N4.99 trillion; d. Pensions, Gratuities and Retirees’ Benefits of N854.8 billion; e. Overheads of N1.11 trillion; f. Capital Expenditure of N5.35 trillion, including the capital component of Statutory Transfers; g. Debt Service of N6.31 trillion; and h. Sinking Fund of N247.73 billion to retire certain maturing bonds.

FISCAL BALANCE

• We expect total fiscal operations of the Federal Government to result in a deficit of 10.78 trillion Naira. This represents 4.78 percent of estimated GDP, above the 3 percent threshold set by the Fiscal Responsibility Act 2007.
• As envisaged by the law, we need to exceed this threshold considering the need to continue to tackle the existential security challenges facing the country.
• We plan to finance the deficit mainly by new borrowings totalling 8.80 trillion Naira, 206.18 billion Naira from Privatization Proceeds and 1.77 trillion Naira drawdowns on bilateral/multilateral loans secured for specific development projects/programmes.
• Over time, we have resorted to borrowing to finance our fiscal gaps. We have been using loans to finance critical development projects and programmes aimed at further improving our economic environment and enhance the delivery of public services to our people.
• As you are aware, we have witnessed two economic recessions within the period of this Administration. A direct result of this is the significant decline in our revenue generating capacity.
• In both cases, we had to spend our way out of recession, resulting in higher public debt and debt service. It is unlikely that our recovery from each of the two recessions would have been as fast without the sustained government expenditure funded by debt. FINANCE BILL 2022
• 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/regulations are being reviewed to produce a draft Finance Bill 2022.
• It is our intention that once ongoing consultations are completed, the Finance Bill 2022 would be submitted to the National Assembly to be considered alongside the 2023 Appropriation Bill.

ENSURING FISCAL SUSTAINABILITY

• To ensure fiscal sustainability, we will further improve our business-enabling environment, accelerate current revenue-based fiscal consolidation efforts and strengthen our expenditure and debt management.

BUDGET OF GOVERNMENT-OWNED ENTERPRISES

• Distinguished Senators, Honourable Members, you may recall that we earlier integrated the budget of Government-Owned Enterprises into the FGN’s 2019 budget submission. This has helped to enhance the comprehensiveness and transparency of the FGN budget. It has however come to my attention that Government-Owned Enterprises liaise directly with relevant NASS committees to have their budget passed and issued to them directly.
• I would like to implore the leadership of the National Assembly to ensure that the budget I lay here today, which includes those of the GOEs, be returned to the Presidency when passed. The current practice where some committees of the National Assembly purport to pass budgets for GOEs, which are at variance with the budgets sanctioned by me, and communicate such directly to the MDAs is against the rules and needs to stop. FINANCING INFRASTRUCTURE GAP
• Nigeria requires a huge outlay of resources to close current infrastructure gaps and boost its economic performance. Government will develop projects that are good candidates for Public Private Partnership (PPP) by their nature for private sector participation.

BUDGET PROCESS BILL 2022

• Distinguished Senators, Honourable Members, ladies and gentlemen. Over the course of this Administration, we have embarked on a number of reforms in the Public Finance Management space. These reforms are bearing fruits and we have seen some of the benefits of the return to a predictable January to December fiscal year for the FGN budget.
• Earlier this year, I was briefed of the impressive performance of Nigeria in the Open Budget Survey, as the third best or most improved country in the world, matching the global average score in budget transparency and exceeding the global average in public participation.
• I commend the Budget Office of the Federation and the Supervising Ministry of Finance Budget and National Planning, the National Assembly Leadership, the relevant Appropriation and Finance Committees as well as non-state actors who have worked tirelessly in pushing for greater transparency and accountability in our budget process.
• We need to sustain and institutionalize the gains of these reforms. To this end, I have directed the Minister of Finance, Budget and National Planning to immediately work on mainstreaming these reforms and work with the National Assembly on passing an Organic Budget Law, which I hope to assent to before the end of this Administration.

HUMAN CAPITAL DEVELOPMENT

• The Government notes with dismay the crisis that has paralysed activities in the public universities in the country. We expect the staff of these institutions to show a better appreciation of the current state of affairs in the country. In the determined effort to resolve the issue, we have provided a total of 470.0 billion in the 2023 budget from our constrained resources, for revitalization and salary enhancements in the tertiary institutions.
• Distinguished Senators and Honourable members, it is instructive to note that today Government alone cannot provide the resources required for funding tertiary education.
• In most countries, the cost of education is jointly shared between the government and the people, especially at the tertiary level. It is imperative therefore that we introduce a more sustainable model of funding tertiary education.
• The Government remains committed to the implementation of agreements reached with staff unions within available resources. This is why we have remained resolute that we will not sign any agreement that we would be unable to implement. Individual institutions would be encouraged to keep faith with any agreement reached in due course to ensure stability in the educational sector.
• Government is equally committed to improving the quality of education at other levels. Recently, we implemented various incentives aimed at motivating and enhancing teachers’ development in our schools.
• In the health sector, the Government intends to focus attention on equipping existing hospitals and rehabilitating infrastructure. Emphasis will also be on local production of basic medicines/vaccines.
• As human capital is the most critical resource for national development, our overall policy thrust is to expand our investment in education, health and social protection.

WOMEN’S EMPOWERMENT

• To harness the potentials of all Nigerian women and enable them to productively contribute to the economy, we will continue to prioritise women’s empowerment programmes across various MDAs in 2023. FOOD PRICES
• Government is very concerned about the high food prices in the country. Various measures are being implemented to address structural factors underlying the issue. We will also step-up current efforts aimed at boosting food production and distribution in the country. You will recall our efforts in improving production of fertilizer, rice, maize cassava among other earlier initiatives. BOOSTING MANUFACTURING PERFORMANCE
• Government is not unaware of the challenges confronting the manufacturing sector. We will ensure effective implementation of policy measures aimed at positioning the manufacturing sector to generate more foreign exchange in the near future. We are also committed to improving the business environment to stimulate local and foreign investment.

SAFE SCHOOLS INITIATIVE

• We ratified the Safe Schools Declaration in 2019. We remain committed to the effective implementation of our Safe Schools Policy. A total of 15.2 billion Naira has been specifically provided in the 2023 Budget to scale up current measures to provide safer and conducive learning environment in our schools.

DEFENCE AND INTERNAL SECURITY

• The Government remains firmly committed to the security of life, property and investment across the country. Accordingly, defence and internal security continue to be accorded top priority in 2023. Current efforts to properly equip and motivate our valiant personnel in the armed forces, police and paramilitary units will be sustained.
• I assure you, insecurity, especially banditry and kidnapping, will be significantly curtailed before the end of this Administration. We will redouble our efforts to ensure we leave a legacy of a peaceful, prosperous and secured nation.
• Mr. Senate President, Mr. Speaker, Distinguished and Honourable Members of the National Assembly, let me conclude my address today by again expressing my deep appreciation for your enormous support, patriotic zeal, and cooperation in our efforts to accelerate the socio-economic development of our country and improve the lives of our people.
• I appreciate the efforts and commitment of the leadership and staff of the Federal Ministry of Finance, Budget and National Planning, especially the Budget Office of the Federation, who have worked hard to achieve early submission of the 2023 Appropriation Bill.
• The 2023 budget proposal is a product of inter-agency collaboration, extensive stakeholder consultations and productive engagements. I would therefore like to acknowledge the efforts of the media, the organized private sector, civil society organizations and our development partners for their contributions in the process of preparing the Budget.
• Considering the challenging situation in our country presently, we must continue to cooperate and collaborate to ensure fiscal sustainability, macroeconomic stability and smooth transition to the incoming Administration.
• This Administration remains resolutely committed to our goals of improving the living standard of our people and effective delivery of public services.
• Distinguished and honourable members of the National Assembly, although no single government can solve all the problems of a country during its own tenure, I have no doubt that you share our aspiration that the 2023 transition budget is designed to address critical issues and lay a solid foundation for the incoming Administration.
• It is with great pleasure therefore, that I lay before this distinguished Joint Session of the National Assembly, the 2023 Budget Proposals of the Federal Government of Nigeria. I thank you most sincerely for your attention. May God bless the Federal Republic of Nigeria.

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Full speech of President Buhari’s 2022 budget presentation

Budget of Economic Growth and Sustainability Delivered By: His Excellency, President Muhammadu Buhari

President, Federal Republic of Nigeria At the Joint Session of the National Assembly, Abuja Thursday, October 7, 2021 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 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 totalled 570.23 billion Naira as of July 2021, which was 51 percent below target, while non-oil tax revenues totalled 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 litre, 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 implementation of the strengthened framework for performance management of government owned enterprises (GOEs), with a view to improve 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 prioritised in favour 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 centres 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 rationalisation 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, the 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 totalling 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 which we are determined to tackle to ensure our debts remain sustainable. 49. Very importantly, we have endeavoured to use the loans to finance critical development projects and programmes aimed at improving our economic environment and ensuring 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 mobilisation 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. 62. May God bless the Federal Republic of Nigeria

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President Buhari’s Full Speech At The 2022 Budget Presentation

President Muhammadu Buhari

President Muhammadu Buhari arrived at the National Assembly for the 2022 annual budget presentation to the joint session of lawmakers.

Below is the full speech made by the president at the budget presentation. Budget of Economic Growth and Sustainability Delivered By: His Excellency, President Muhammadu Buhari President, Federal Republic of Nigeria At the Joint Session of the National Assembly, Abuja Thursday, October 7, 2021 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 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 totalled 570.23 billion Naira as of July 2021, which was 51 percent below target, while non-oil tax revenues totalled 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 litre, 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 implementation of the strengthened framework for performance management of government owned enterprises (GOEs), with a view to improve 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 prioritised in favour 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 centres 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 rationalisation 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, the 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 totalling 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 which we are determined to tackle to ensure our debts remain sustainable. 49. Very importantly, we have endeavoured to use the loans to finance critical development projects and programmes aimed at improving our economic environment and ensuring 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 mobilisation 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. 62. May God bless the Federal Republic of Nigeria.