…Cuts Federation Account Allocation To Three Tiers Of Govt By N2.4trn
President Muhammadu Buhari on Tuesday asked the Senate to adjust upward the 2022 fiscal framework in view of new developments in both the global and domestic economies.
The President’s request is contained in a letter which was read during plenary by the Senate President, Ahmad Lawan.
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He said the review was caused by an increase in the market price of crude oil, which were a fallout of the Russian-Ukraine war.
He, therefore, requested the upper chamber to approve an increase in the oil benchmark by $11 per barrel, from $62 per barrel to $73 per barrel.
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 urged the lawmakers to approve an increase in the estimated provision for Premium Motor Spirit subsidy for 2022 by N442.72bn from N3.557trn to N4trn.
Buhari underscored the need to cut the provision for Federally-funded upstream projects being implemented by N200bn, from N352.8bn to N152.8bn.
He proposed an increase in the projection for Federal Government Independent Revenue by N400bn; and an additional provision of N182.45bn to cater to the needs of the Nigerian Police Force.
He said, “As you are aware, there have been new developments both in the global economy as well as in the domestic economy which have necessitated the revision of the 2022 Fiscal Framework on which the 2022 Budget was based.
“These developments include spikes in the market price of crude oil, aggravated by the Russian-Ukraine war, significantly lower oil production volume due principally to production shut-ins as a result of massive theft of crude oil between the production platforms and the terminals.
“The decision to suspend the removal of Petroleum Motor Spirit subsidy at a time when high crude oil prices have elevated the subsidy cost has significantly eroded government revenues.”
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 N2.418trn, while FGN’s share from the Account (net of transfer to the Federal Capital Territory and other statutory deductions) is projected to reduce by N1.173trn.”
He disclosed that the amount available to fund the FGN Budget is projected to decline by N772.91bn due to the increase in the projection for Independent Revenue (Operating Surplus Remittance) by N400bn.
He explained further that Aggregate Expenditure is projected to increase by N192.52bn, due to increase in personnel cost by N161.40bn and other service wide votes by N21.05 billion (both for the Nigeria Police Force), additional domestic debt service provision of N76.13bn, and net reductions in Statutory Transfers by N66.07 billion.