2022 Budget: Defence, Infrastructure, Education Get N5.15trn Allocation

• FG mulls revenue challenge as INEC gets N100bn for 2023 polls
• 2022 Population and housing census receives N178.1bn allocation

BY COBHAM NSA – Clearly acknowledging the reality of increasing insecurity in the country, the Federal Government is prioritising expenditure in the defence and security sector with over N2.41 trillion allocation in the 2022 proposed budget.

The amount, which represents 15 percent of the total budgetary estimates, covers both recurrent and capital expenditure for the Military, Police, Intelligence, and Para-Military agencies.

Joining the defence and security sector to enjoy the larger chunk of the 2022 budget of N16.39 trillion is infrastructure scheduled to gulp about N1.451 trillion. The figure, which represents about 8.9 percent of the budget, includes provisions for Works and Housing; Power, inclusive of PSRP Provisions, Transport, Water Resources, and Aviation.

Minister of Finance, Budget and National Planning, Mrs (Dr) Zainab Shamsuna Ahmed, who spoke at the Public Presentation of 2022 FGN Budget Proposal – Breakdown and Highlights – in Abuja on Friday, said the proposal also has education getting N1.29 trillion, representing 7.9 percent; Social Development and Poverty Eradication – N863 billion, representing 5.3 percent; and the Health sector – N820 billion, representing five (5) percent of the entire allocation.

Mrs Ahmed explained that of the N16.39 trillion budgetary estimates, projected recurrent expenditure for the year stands at N6.83 trillion, representing 41.7 percent of total expenditure and 18.5 percent higher than the 2021 allocation.

This is as the Minister admitted that revenue generation remains the major fiscal constraint of the Federal Government.

According to the Minister, the Federal Government is looking to fund the budget with a total of N10.132 trillion as revenue for the year while N3.60 trillion has been slated as funds that will be used to offset the nation’s debts.

She said the government is also focused on implementing initiatives aimed at improving its revenue profile, adding that “the systemic resource mobilization problem has been compounded by recent economic recessions.”

Mrs Ahmed stated that “several measures are being instituted under the Administration’s Strategic Revenue Growth Initiatives to improve government revenue and entrench fiscal prudence with emphasis on achieving value for money.”

The Minister explained that the measures include: “Improving the tax administration framework, including tax filing and payment compliance improvements”; “Identifying and plugging existing revenue leakages to enhance tax compliance and reduce tax evasion”; “Leveraging technology and automation; and “Plugging fiscal drainers like subsidies”

Similarly, Mrs Ahmed said; “to further enhance independent revenue collection, the government aims to optimize the operational efficiencies and revenue generation focus of GOEs” while also introducing “new and further increases in existing pro heath taxes for example, excise on carbonated drinks”

Other measures to be taken are: “Evaluation of the process and policy effectiveness of Fiscal Incentives, including Review of Sectors eligible for Pioneer Tax Holiday Incentives under the Industrial; Development Income Tax Relief Act (‘IDITRA’); Dimensioning the cost of tax waivers/concessions, and evaluating their policy effectiveness; Setting annual ceilings on Tax Expenditures to better manage their impact on already constrained government revenues; and ensuring that MDAs appropriately account for and remit their internally generated revenue.”

Giving further insights on the expenditure projection for 2022, Mrs Ahmed explained that the figures have gone up following additional provisions of N100 billion for the Independent National Electoral Commission (INEC) to prepare for the 2023 general elections; and N400 billion for national poverty reduction.

Other areas where the government has allocated funds are the 2022 Population and housing census with N178.1 billion; the National Agency for Science and Engineering Infrastructure (NASENI) allocated N54 billion; and N305.99 billion that will go to TETFUND.

Also speaking at the occasion, Director-General, Budget Office of the Federation, Ben Akabueze, said the budget is not just a technical instrument but a moral document that wholly represents who and what the country values.

He admitted that though inadequate sectoral allocation is a comment not usually contested by the government, conscious efforts are being made to grow an all-inclusive economy that Nigerians would love to see.

The Director-General said with the President having laid the 2022 budget proposals before the National Assembly (NASS), a critical part of the process has been executed and the ball is now in the court of the lawmakers’ court to make necessary inputs and fine-tune it into a service delivery document for Nigerians.