The Federal Executive Council (FEC) has approved the 2022 – 2024 Medium Term Expenditure Framework and the Fiscal Strategy Paper (MTEF/ FSP).
Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, disclosed this after the meeting of the Council which was presided over by President Muhammadu Buhari, in Abuja on Wednesday.
According to her, the MTF/ FSP highlights the Federal Government’s socio-economic and developmental objectives and priorities for the reporting period of 2022 to 2024 as well as the fiscal strategies to be put in place, and policies to achieve the priorities.
She said her ministry presented a memo to FEC with a 2022 projected revenue of N6.54 trillion and N2.62 trillion to accrue to the Federation Account and Value Added Tax (VAT) respectively.
According to her, this revenue is projected to increase in 2023 to N9.15 trillion.
She said: “The goal for us is to improve the nation’s macro-economic situation or reposition the economy. The MTF/ FSP consists of medium term macro-economic projections, fiscal targets and estimates of revenue and expenditure, including government’s financial obligations.
“We have also presented to the Federal Government the projected revenues for the 2022 to 2024, specifically for 2022.
“The revenue that we expect is N6.54 trillion and N2.62 trillion to accrue to the Federation Account on VAT respectively. And then there will be a net oil and gas revenue available for the Federation Account for distribution which will be N6.15 trillion in 2022.
“This revenue is projected to increase in 2023 to 9.15 trillion. The total expenditure that we are expecting, which we have projected and has been approved by Council is an aggregate expenditure of N13.98 trillion.
“This includes N1.1 trillion of government-owned enterprises expenditure as well as grants and donor funded projects in the sum of N62.24 billion.
“This means that this budget is just three per cent higher than the 2021 budget in terms of the size of expenditure.
“We also reported to the council the budget deficit and the financing items for the expenditure.”
According to the minister, the budget deficit that is projected for 2022 is N5.62 trillion, up from 5.60 trillion in 2021.
She added that this amount represents 3.05 per cent of the estimated GDP, which is slightly above the 3 per cent threshold that is specified in the Fiscal Responsibility Act (FRA).
“The FRA empowers Mr president to exceed the threshold. In his opinion, the nation faces national security threats and it is our opinion that we can exceed.
“The deficit is going to be financed by new foreign borrowing and domestic borrowing, both domestic and foreign in the sum of N4.89 trillion on privatisation proceeds of N90.73 billion and drawdowns from existing project tied loans of N635 billion.
“I just want to state that the project’s debt-to-revenue ratio in the report is 43 per cent. Which, of course, we know Nigerians all have concerns about the actual debt-to-revenue ratio, but in 2019 it was 58 per cent.
“So, this is an improvement over the preceding over 2019. In 2020, the ratio was up to 85%,” she added.
The minister said she provided to council a macro economic background which affirmed that the Nigerian economy had recovered from a negative growth of minus 1.8 per cent in 2020 to 2.5 per cent in 2021.