By Adedapo Adesanya
The Senate has passed the 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) ahead of the presentation of the 2022 Appropriations bill to the National Assembly by President Muhammadu Buhari.
The passage of the 2022-2024 MTEF/FSP followed the report by the Joint Committees on Finance; Local and Foreign Debts; Banking, Insurance and other Financial Institutions; Petroleum Resources (Upstream); Downstream Petroleum Sector and Gas.
The Joint Committee report was presented by Mr Solomon Olamilekan Adeola, who chairs the Finance Committee.
The chamber, during consideration of the report, gave its nod to the federal government’s revenue projection of N8.36 trillion; and proposed expenditure of N13.98 trillion.
Accordingly, it also approved the daily crude oil production of 1.88 million barrels per day, 2.23 million barrels per day, and 2.22 million barrels per day for 2022, 2023 and 2024 respectively.
This was done in view of an average of 1.93 million barrels per day over the last three years and the fact that a very conservative oil output benchmark has been adopted for the medium term in order to ensure greater budget realism.
The Senate in its recommendations approved the benchmark oil price of $57 per barrel; adopted the exchange rate of N410.15/$1 by the executive for 2022-2024 and gave its nod to the projected Gross Domestic Product (GDP) growth rate of 4.2 per cent and put forward as 13 per cent inflation rate.
In addition, the chamber approved a fiscal deficit of N5.62 trillion; new borrowings of N4.89 trillion – an amount which includes foreign and domestic borrowing – subject to the provision of details of the borrowing plan to the National Assembly.
The Senate also approved other parameters such as statutory transfers totalling N613.4 billion; debt service estimate of N3.12 trillion; sinking fund to the tune of N292 billion; pension, gratuities and retirees benefits of N567 billion.
Out of the aggregate federal government’s expenditure of N13.98 trillion, the upper chamber approved the sum of N6.12 trillion for total recurrent (non-debt); N3.47 trillion as personnel cost for ministries, Departments and Agencies (MDAs); N3.26 trillion for capital expenditure (exclusive transfers); N350 billion special intervention (recurrent); and N10 billion for special intervention (capital).
The upper chamber in its report recommended that the fiscal deficit estimate of N5.62 trillion also be sustained due to the federal government’s conservative approach to target setting and its determination to improve the collection efficiency of the major revenue-generating agencies.
It further called on the Salaries and Wages Commission to review the salary structure of all MDAs in order to come up with a new salary structure that will reflect the true financial position of the agencies.
The chamber also demanded a continuous review of the Fiscal Responsibility Act to ensure that all revenues are remitted to the Consolidated Revenue Fund (CRF) as at when due, in order to curtail frivolous deductions and diversion of funds by the MDAs.
