Nigerian govt incurs N7.35tn deficit as NASS passes amended 2022 budget

The National Assembly enacted revisions to the 2022 Appropriation Act and the 2022 Fiscal Framework on Thursday, bringing the federal government’s budget deficit to N7.35 trillion.

In response to President Muhammadu Buhari’s request, the Senate and House of Representatives discussed and adopted reports on the amendment legislation at plenary.

Both houses also approved a new $73 per barrel oil price benchmark, a new oil production volume of 1.600 million barrels per day, and a N4 trillion PMS subsidy.

The provision for federally-funded upstream projects that are currently being implemented has been reduced by N200 billion from N352.80 billion, but the projection for federal government independent revenue has been increased by N400 billion.

There was also an increased provision of N182.45 billion for the Nigeria Police Force’s needs, as well as a provision of N76.13 billion for domestic debt servicing, resulting in a net reduction of N66.07 billion in statutory transfers.

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The President had written to the National Assembly, requesting that the budget and fiscal framework for 2022 be amended.

Buhari said the changes to the 2022 Fiscal Framework included an increase of $11 per barrel in the projected oil price benchmark, from $62 to $73 per barrel; a reduction of 283,000 barrels per day in projected oil production volume, from 1.883 million barrels per day to 1.600 million barrels per day; and an increase of N442.72 billion in the estimated provision for PMS subsidy for 2022, from N3.557 trillion to N4 trillion.

“Total budget deficit is projected to increase by N965.42 billion to N7.35 trillion, representing 3.99% of GDP. The incremental deficit will be financed by new borrowings from the domestic market,” he had noted.

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