Senate Approves N7.32 Trillion Fiscal Deficit for 2022

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CEM REPORT | The Nigeria upper chamber has today, Thursday approved the adjustment of the 2022 fiscal framework.

The Senate gave their approval to President Muhammadu Buhari’s adjustments request to the 2022 fiscal framework, after considering the report presented by the Chairman of the Senate Committee on Finance, Sen. Olamilekan Adeola.(APC – Lagos).

The Senate also approved $73 dollars per barrel and oil production volume of 1,600 million per day proposed by the President.

Also the Senate cut the provision for Federally funded upstream project from N352.80 to N200 billion as it approved the subsidy of N4 trillion for petrol.

Furthermore, the approval of N182.4 billion was given for the Nigeria Police Force. It also approved N400 billion increase in the Federal Government Independent Revenue and N76.13 billion for debt servicing.

Also in the approval was N7.32 trillion for fiscal deficit and net reductions in Statutory Transfer by N66.07 billion.

The net reductions are: NDDC, from N102.78 billion to N89.32 billion, reduced by  N13.46 billion. NEDC, from N48.08 billion to N41.78 billion a reduction by N6.30 billion. UBEC, from N112.29 billion to N89.13 billion reduced by N23.16 billion.

NASENI was reduced from N56.14 billion to N44.56 billion cutting out N11.58 billion and Basic Health Care Fund was slashed from N56.14 billion to N44.56 billion removing N11.58 billion

Senator Adeola, presenting the budget said the total budget deficit is projected to increase by 3.99 percent of Gross Domestic Product (GDP), from N965.42 billion to N7.35 trillion, adding that the new borrowing from the domestic market would sponsor the incremental deficit.

Lawmakers who spoke on the report blamed oil theft for the country’s present economic tumble.

The Senate Leader, Yahaya Abdullahi, expressed deep concern over the perpetual rising cases of oil theft amidst continuous resources allocated to the military, police and other security agencies.

He further said the country should be in a deep state of mourning over insecurity challenges especially oil theft.

Sen. Olubunmi Adetunmbi (APC – Ekiti), said the federal government and security agencies owed Nigerians the duty to protect its common wealth from thieves.

He lamented that other oil producing countries are cashing out from the increase in oil prices occasioned by the Russia-Ukrian war, Nigeria is struggling to meet its OPEC quota.

While Senator, Gabriel Suswam (PDP Benue), Betty Apiafi (PDP Rivers), urged the House not to approve the President’s request hastily until certain questions were answered.

Senator Suswam raised concerns on the expanding gap in budget deficit and the federal government’s decision to resort to funding from the Capital Market,

Senator Apiafi, demanded answers from NNPC and relevant agencies on solutions to curb crude oil theft.

The Senate President, Ahmad Lawan, in his concluding remarks, said the Federal Government need to take “radical” steps towards stopping the theft of crude oil.

“Radical decisions would have to be taken, but before we find answers we have to live with this, though we have to be as fast as possible in looking for answers.” he said.

He noted that the security agencies are working relentlessly to curb the menace but the saboteurs are Nigerians not foreigners.

“I had a session with the Chief of Defence Staff about a month ago, and my discussions with him were on the oil theft and the efforts of our security agencies to combat this menace”,.

“And like we know, our security agencies are doing their best, but we have people – our people – who are sabotaging the oil industry, because oil theft is not perpetrated by somebody else but by people who are citizens” he noted.

He further called for support for the military and security agencies.

“So, we need to continue to support the security agencies in whatever way possible so that they are able to deal with this.” he said

On importation of petroleum products, he called for a complete bar of the action saying, effort should be intensified into refining locally which will drastically cut down on expenditure and adequately maximize profits from crude oil sales

“I also believe that, whether there is oil theft or not, until we stop the importation of refined products to Nigeria, we will never get the best out of the oil and gas industry.

“We should, therefore, work to ensure that we produce our refined products locally, because that is one way of cutting our expenditure on importation.” he sai

He also called for the diversification of the economy to reduce dependence on oil.

“I also think that diversification of the economy is key, because we depend so much on this oil and gas industry, the slightest issues that affects it internationally affects us seriously in our country,” Lawan said.

 

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