For many, President Buhari’s timely presentation of N16.3 trillion national budget for 2022 to the National Assembly is commendable. It is expected that the National Assembly will conclude work on it before the end of the year to enable implementation commence in January, following the President’s assent. Indeed, mending of the hitherto broken budget year is a major achievement by this administration.
In the new draft budget, the executive is proposing aggregate revenue available to fund the 2022 budget of N10.13 trillion (inclusive of government owned enterprises), is 24.8 per cent higher than the 2021 projection of N8.12 trillion.
Without the government owned enterprises retained revenue, the government revenue is projected at N8.40 trillion. In aggregate, 34.9 per cent of projected revenue is to come from oil-related sources, while 65.1 per cent is to be earned from non-oil sources.
As there are many criticisms to the budget, President Buhari’s explanation is that the 2022 budget, titled “Economic Recovery and Sustainability,” is aimed at diversifying the economy, investing in critical infrastructure, strengthening security, reducing poverty and minimising regional, economic and social disparities.
Chairman of the Chartered Institute of Bankers of Nigeria (CIBN), Abuja chapter and Nigeria’s first Professor of capital market, Uche Uwaleke, thinks the budget benchmarks are largely realistic with respect to crude oil price of $57, exchange rate of N410 and real GDP growth rate of 4.2 per cent.
However, for him, inflation rate of 13 per cent does not appear realistic considering the implementation of the PIA requiring the complete removal of fuel subsidy. “As the President admitted, the concern about increasing deficit financing through borrowing is justified,” he stated.
There is widespread worry about government’s attitude of borrowing, but the President assures that the nation’s borrowing is still within limit. The consolation however is that all new borrowings are tied to critical projects. It’s equally noteworthy that government has made provision for use of Green bonds as well as PPP arrangements in financing infrastructure. There is no agreement on that.
While the federal government and some members of the ruling All Progressives Congress including. Senator Opeyemi Bamidele (APC Ekiti) said the budget goes to show that government is conscious of the realities the country is facing. He said since it is a budget of legacy, the figures from N13 trillion last year to N16.39 trillion this year shows that with the items listed to carter for poverty reduction, the budget has given governance a human face.
Nigeria’s real Gross Domestic Product (GDP) grew -0.79 per cent in the second quarter of 2021 compared to Q1 2021 when the economy grew positive growth rate of 0.5 per cent, reflecting slightly slower economic activity than the preceding quarter due largely to seasonality, according to data from the National Bureau of Statistics.
Even though the government is still celebrating the 5.01 per cent growth (year-on-year) in real terms in the second quarter of 2021, in real terms, the economy grew negative in the second quarter.