In line with its resolve to sustain the January to December budget cycle, the Senate on Tuesday commenced debate on the 2022 N16.39tr budget proposal for the 2022 fiscal year presented to the National Assembly last week by President Muhammadu Buhari.
President of the Senate, Ahmad Lawan, who presided over plenary, said the debate on the bill which is slated for two days continues on Wednesday, October 13, 2021, noting that of the total expenditure proposed for the Federal Government in 2022, N768.28bn is for Statutory Transfers; N6.83tr for Non-debt Recurrent Costs; and N4.11 trillion for Personnel Costs.
Others, he continued, are N577bn for Pensions, Gratuities, and Retirees’ Benefits; N792.39bn for Overheads; N5.35tr for Capital Expenditure, including a capital component of statutory transfers; N3.61tr for Debt Service; and N292.71bn for Sinking Fund to retire certain maturing bonds.
Lawan explained that the expected total fiscal operations of the Federal Government would result in a deficit of 6.26tr, an amount representing 3.39 percent of estimated GDP.
The figure, he stressed, is slightly above the 3 percent threshold set by the Fiscal Responsibility Act 2007.
Leading debate on the general principles of the bill, the Senate Leader, Yahaya Abdullahi, said the 2022 Budget of Economic Growth and Sustainability places Defence and Internal Security as top priority signaling the administration’s firm commitment to the security of life, property, and public safety, nationwide.
According to him, the fiscal operations of the federal government which would result in a deficit of N6.26tr can be tackled either by increasing taxes, cutting expenditure, and borrowing, even as he explained that increase in taxes was not feasible because the majority of Nigeria’s population are made up of the poor.
The lawmaker observed that it is more dangerous to sack workers in a bid to cut down on government spending, warning that doing so would expose the country to political and economic turbulence.
He added that the country’s last option of borrowing would allow the nation to survive the present challenges and stabilize the polity and economy.
“In the 2022 budget, deficit spending has become necessary in order to ensure that the economy does not relapse into another recession after strongly coming out of the last one with a respectable 5 percent growth in the second quarter of this year.
“Deficit financing is mainly to fund capital expenditure. These new borrowings totaling N5.01 trillion naira, N90.73 billion naira from Privatization Proceeds, and N1.16tr draw-downs on loans secure for specific development projects.
“Although there is a growing concern over this administration’s resort to borrowing to finance fiscal gaps, let me state here that the debt level of the federal government is still within sustainable limits”, Senator Yahaya said.