President Muhammadu Buhari has forwarded the revised 2022-2024 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) to the Senate for consideration.
The Deputy Senate President, Ovie Omo-Agege, read the President’s letter at Tuesday’s plenary.
The Senate had on September 22 approved the 2022-2024 MTEF/FSP and pegged the benchmark oil price at $57 per barrel.
The letter read: “It is with pleasure that I forward the revised 2022-2024 MTEF-FSP for the kind consideration and approval by the Distinguished Senate.
“The revision was necessitated by the need to reflect the new fiscal terms in the Petroleum Industry Act (PIA) 2021 as well as other critical expenditures in the 2022 budget.
The underline drivers of the 2022 fiscal projections such as oil price benchmark, oil production volume, exchange rate, GDP growth, and inflation rate to reflect emerging realities and a microeconomic outlook and remain unchanged as in previously approved 2022-2024 MTEF and the FSP.”
The President said the PIA established a fiscal framework aimed at encouraging investment in the Nigerian Petroleum Industry.
This significantly alters the oil and gas fiscal terms and has necessitated changes in the 2022-2024 Medium Term Fiscal Framework.
“The fiscal effects of PIA implementation are presumed to kick in by mid-year 2022.
“The revised 2022-2024 fiscal framework is the premise on the hybrid of January to June based on current fiscal regime and July to December based on PIA fiscal regime while 2023 and 2024 are fully based on the PIA.
“Arising from this, therefore, the other critical expenditure that should be accommodated in the 2022 budget, the changes to the 2022 projections in the fiscal framework are as follows:
“Growth revenue projection decreased by N341.57 billion from N8.87 trillion to N8.528 trillion.
Deductions for federally-funded upstream project costs and 13 percent derivation decreased by N335.3 billion and N810.25 million respectfully.
“An increase in projected federal government of Nigeria’s retained revenue from N8.36 trillion to N10.13 trillion inclusive of Government-Owned Enterprises (GOEs).
“This was largely based on a projected increase in the revenues of GOEs by N837. 76 billion,” it added.
