2022 Budget: Capital expenditure rises by 60% in 4 years

Buhari writes NASS, to present 2022 budget tomorrow

By Emma Ujah, Abuja Bureau Chief, Obas Esiedesa & Emmanuel Elebeke

Capital Expenditure by the Federal Government would rise by 60 percent in four years if the N5.35 trillion proposed by President Muhammadu Buhari is passed by the National Assembly, from the N2.14 trillion passed in 2019.

Aggregate capital expenditure of N5.35 trillion is 32.7% total expenditure. This provision is inclusive of  capital component of statutory transfers, Government Owned-Enterprises, GOEs Capital and projected-tied loans expenditures.

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, had on Thursday the breakdown of the N16.391 trillion 2022 budget proposal disclosed that the 2022 recurrent expenditure (non-debt) is 18.5 percent higher than the N5.76 trillion in 2021 budget.

The capital expenditure for 2022 is 2.24 percent higher than the N5.23 trillion provided in the 2021 budget.

Checks by showed that in 2019 out of the N8.9 trillion 24.04 percent was budgeted for capital expenditure with only N1.2 trillion released for capital projects during the year.

In 2020 revised budget, N301 billion was added to the earlier Capital expenditure proposal and was jerked up from N2.230 trillion to N2.488 trillion. Recurrent expenditure also went up from the earlier proposed N4.928trillion to N4.942trillion and statutory transfers increased from N398.505 billion to N428.033, totaling N301billion.

Although the President Muhammadu Buhari has made significant increases in the capital votes, implementation of same has always lagged behind.

The data showed that total capital expenditure of N2.488 budgeted for 2020 was 33.48 percent of Federal Government expenditure excluding statutory transfers.

However, only N1.74 trillion was released for capital projects as at December, 2020.

For 2021, capital budget of N5.23 trillion was about 36 percent of the total expenditure. However,  as at August 2021, only N1.759 trillion had been expended for capital.

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 Of this, N1.723 trillion represents 81% of the provision for MDAs’ capital, and N36.01 billion as GOEs capital expenditure.

Revenue challenges

The 2022 budget tagged Budget of Economic Growth and Sustainability proposed an aggregate expenditure of N16,39 trillion.

The projected aggregate revenue of N10.13 trillion to fund the 2022 budget is 24.8% higher than the 2021 projected revenue of N8.12 trillion.

Achieving revenue targets have been a major challenge for the federal government, especially since the 2016 recession.

About 34.9% of this year’s projected revenues is to come from oil-related sources while 65.1% is to be earned from   non-oil sources.

In 2021, Mrs. Ahmed said federal government generated N3.93 trillion revenue as at August, representing 73% of the targeted N7.9 trillion revenue for the year.

The minister said revenue remains the major fiscal constraint of the federal government.

According to her, the systematic resource mobilization problem has been compounded by recent economic recessions.

However, she said that several measures have been put in place by the administration’s Strategic Revenue Growth Initiatives to improve government revenue and entrench fiscal prudence with emphasis  on achieving value for money.


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Source: Vanguard News

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