The President of Nigeria, Muhammadu Buhari has requested for the inclusion of N2.557 trillion as an additional petrol subsidy payment in the 2022 budget.
Buhari sought approval of the amendment of the 2022 budget to accommodate more spending, presenting the request in a letter to the National Assembly.
The letter was read by the Senate President, Ahmad Lawan on Tuesday during the plenary session of the Senate.
In the letter, the federal government had requested for an 18-month extension for the implementation of the petroleum industry law.
Investors King reports that if the legislature approves the proposal, the government will keep fending for subsidy payments on PMS, which gulped N1.4 trillion in 2021.
“It has become necessary to present this amendment proposal considering the impacts of the recent suspension of the Petroleum Motor Spirit (PMS) subsidy removal and the adverse implications that some changes made by the National Assembly in the 2022 Appropriation Act could have for the successful implementation of the budget.
“Following the suspension of the PMS subsidy removal, the 2022 Budget Framework has been revised to fully provide for PMS subsidy (see Schedule V). An additional provision of N2.557 trillion will be required to fund the petrol subsidy in 2022. Consequently, the Federation ACCOunt (Main Pool) revenue for the three tiers of government is projected to decline by N2.00 trillion, while FGN’s share from the Account is projected to reduce by N1.05 trillion.
“It is important to restore the provisions made for various key capital projects in the 2022 Executive Proposal (see details in Schedule l) that were cut by the National Assembly,” the letter read.
The letter further stated that amendments in other sectors like power, water, infrastructure, economy are essential to enhance ongoing projects that are cardinal to the administration, and those almost completed do not suffer a setback due to reduced funding.
Detailing the extracted earmarks, it stated, “It is equally important to reinstate the N25.81 billion cut from the provision for the Power Sector Reform Programme to meet the Federal Government’s commitment under the financing plan agreed with the World Bank.
“In addition, it is necessary to reinstate the four (4) capital projects totalling N1.42 billion in the Executive Proposal for the Federal Ministry of Water Resources that were removed in the 2022 Appropriation Act.
“Furthermore, there is a critical and urgent need to restore the N3 billion cut from the provision made for payment of mostly long outstanding Local Contractors’ Debts and Other Liabilities as part of our strategy to reflate the economy and spur growth (see Schedule I).”
President Buhari, in his proposal, noted that N106 billion provided in the supplementary bill would be used as capital expenditure and N43.87billion would be spent on recurrent expenditures.
He added that the sum available to fund the federal government budget in 2022 is projected to decline by N969.09 billion.
He enjoined the legislative arm to make the proposed amendments without increasing the budget deficit.
“I urge you to roll back some of the N887.99 billion of projects earlier inserted in the budget by the National Assembly to accommodate these amendments.
“Total budget deficit is projected to increase by N1.01 trillion to N7.40 trillion, representing 4.01% of GDP. The incremental deficit will be financed by new borrowings from the domestic market.
“Given the urgency of the request for amendments, I seek the cooperation of the National Assembly for expeditious legislative action on the 2022 Appropriation Amendment Proposal in order to sustain the gains of an early passage of the budget,” Buhari stated.
