New Telegraph

February 24, 2024

Budget deficit hits N7.35trn

…as Buhari seeks fresh adjustments to 2022 fiscal framework
…proposes N4trn for fuel subsidy, additional N182.45bn for Police

President Muhammadu Buhari, yesterday, requested the Senate to grant him approval towards adjustments to the 2022 Fiscal Framework. The President made the request through a letter he addressed to the President of the Senate, Ahmad Lawan, dated April 5, which he read on the floor of the Senate produring plenary. The President, in the letter, explained that an adjustment to 2022 became necessary in view of new developments in both the global and domestic economies. According to him, the developments were occasioned by spikes in the market price of crude oil, which were fallout of the Russian-Ukraine war.

“As you are aware, there have been new developments both in the global economy as well as in the domestic economy which have neces-sitated the revision of the 2022 Fiscal Framework on which the 2022 Budget was based. “These developments include spikes in the market price of crude oil, aggravated by the Russian-Ukraine war, significantly lower oil production volume due principally to production shutins as a result of massive theft of crude oil between the production platforms and the terminals. “The decision to suspend the removal of the Petroleum Motor Spirit (PMS) subsidy at a time when high crude oil prices have elevated the subsidy cost has significantly eroded government revenues,” he said. He, therefore, requested the Upper Chamber to approve an increase in the oil benchmark by $11 per barrel, from $62 per barrel to $73.

The President also sought a reduction in the projected oil production volume by 283,000 barrels per day, from 1.883 million barrels per day to 1.600 million barrels per day. He also asked the Chamber to approve an increase in the estimated provision for PMS subsidy for 2022 by N3.557 trillion, from N442.72 billion to N4.00 trillion. Buhari, stressed the need to cut in the provision for federally funded upstream projects being implemented by N200 billion, from N352.80 billion to N152.80 billion. He proposed an increase in the projection for Federal Government Independent Revenue by N400 billion; and an additional provision of N182.45 billion to cater for the needs of the Nigerian Police Force.

He added that: “Based on the above adjustments, the Federation Account (Main Pool) revenue for the three tiers of government is projected to decline by N2.418 trillion, while FGN’s share from the Account (net of transfer to the Federal Capital Territory and other statutory deductions) is projected to reduce by N1.173 trillion.”

He disclosed that the amount available to fund the FGN Budget was projected to decline by N772.91 billion due to the increase in the projection for Independent Revenue (Operating Surplus Remittance) by N400 billion. Giving a breakdown, he said the net deductions would see a cut by N13.46 billion from N102.78 billion to N89.32 billion for NDDC; NEDC, by N6.30 billion from N48.08 billion to N41.78 billion; UBEC, by N23.16 billion from N112.29 billion to N89.13 billion; Basic Health Care Fund, by N11.58 billion from N56.14 billion to N44.56 billion; and NASENI, by N11.58 billion from N56.14 billion to N44.56 billion. The President noted that the total budget deficit was projected to increase by N965.42 billion to N7.35 trillion, representing 3.99% of GDP.

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