The Senate and the House of Representatives, yesterday approved the N4 trillion to fund the fuel subsidy in 2022 requested by President Muhammadu Buhari.
This indicates an increase of N3.557 trillion from the N442.72 billion originally earlier budgeted for in the 2022 Appropriation Act.
The lawmakers also increased the oil benchmark from $62 per barrel (bbl) to $73/bbl, while projected oil production was raised by 283,000 barrels per day (bpd) from 1.883 million to 1.600 million bpd.
These were done to accommodate the President’s request to make adjustments to the 2022 fiscal framework, as contained in a letter to the Senate on Tuesday.
Buhari explained that an adjustment to the 2022 fiscal framework became imperative in view of new developments in both the global and domestic economies occasioned by spikes in crude oil price, which were fallout of the Russia-Ukraine war.
The approval followed the consideration of a report by the Senate Committee on Finance, in which its Chairman, Solomon Olamilekan, noted that the total budget deficit is projected to increase by N965.42 billion to N7.35 trillion or 3.99% of Gross Domestic Product (GDP).
He added that “incremental deficit will be financed by new borrowings from the domestic market.”
The approval was however not a smooth sail, as there were counter-arguments by lawmakers, who objected to the adjustment, demanding for more action on crude oil theft to enable Nigeria to reap bountifully from the current high prices of the product at the international market.
Other adjustments
The lawmakers approved a cut in the provision for federally-funded upstream projects being implemented by N200 billion from N352.80 billion.
They approved an increase in the Federal Government Independent Revenue of N400 billion and an additional provision of N182.4 billion to cater for the needs of the Nigeria Police Force.
Also approved were debt service provision of N76.13 billion, and net reductions in Statutory Transfers by N66.07 billion.
We expect compliance with this Act when it is signed by President Muhammadu Buhari. Ministries, Departments and Agencies should only carry out expenditures that have been approved in the Budget.
More reductions include:
- NDDC, by N13.46 billion – from N102.78 billion to N89.32 billion;
- NEDC, by N6.30 billion – from N48.08 billion to N41.78 billion; and UBEC, by N23.16 billion from N112.29 billion to N89.13 billion.
- Others are 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 Senate also approved the fiscal deficit of N7.35 trillion, after which the 2022 Appropriation Act (Amendment) Bill was passed.
Speaking afterward, the Senate President, Ahmad Lawan, asked the Executive to take “radical” steps towards stopping oil theft by economic saboteurs.
He also urged the government to stop the importation of refined petroleum products into Nigeria, to cut down on expenditures incurred in the process, as well as to maximise profits from crude oil sales.
He said oil theft is not something to play politics with and there is a need for answers and radical decisions.
Lawan said further: “The entire country is waiting for this Bill to be passed because this is the only way the government will provide services to the people of this country.
“We expect compliance with this Act when it is signed by President Muhammadu Buhari.
“Ministries, Departments and Agencies should only carry out expenditures that have been approved in the Budget.”
Ad hoc committee on oil theft
Thereafter, the Senate constituted a 13-member ad hoc committee to investigate oil theft in Nigeria and its impact on petroleum production and oil revenues.
The Committee is chaired by Albert Bassey, while members include Yusuf Yusuf, Solomon Olamilekan, Kabiru Gaya, Adamu Aliero, Thompson Sekibo and Gabriel Suswam, Kashim Shettima, Sabi Abdullahi, Ali Ndume, Stella Oduah, Sani Musa, and Ibrahim Gobir.
The panel was given one month to conclude its investigations and report back to the chamber in plenary.
