Business

Nigeria’s Budget 2022 And Debt Service Implication [ANALYSIS]

Published

4 years ago

November 9, 2021

Richard Asoge

In compliance with the section 81 of the 1999 Nigeria Constitution as amended, the President of Federal Republic of Nigeria, Muhammadu Buhari, on October 7, 2021 laid before the National Assembly 2022 budget estimate for the country. Bringing it about three months before the implementation begins creates room for thorough dissecting and as well inviting all critical stakeholders which include ministries, departments and agencies on their take.

The year 2022 drafted budget is N16.39 trillion. Recurrent expenditure without debt service and capital expenditure is respectively to gulp N6.83 trillion and N4.89 trillion. Furthermore, debt service is to take a chunk of N3.9 trillion while statutory transfer is to take the sum of N768.28 billion. Breaking it down to a common man language, of every one hundred naira the country intends to spend in the coming year, about N24 goes on debt services to various organizations, institutions or countries which in the time past, Nigeria had obtained loans. As at August 2021, the records of Debt Management Office showed that Nigeria owed about N35 trillion to internal and external bodies. The country is enmeshed in debt. As if the damage was not enough, we are still asking for more loans like ‘Oliver Twist’. Of course, there is nothing wrong in obtaining a loan to finance a project if it is viable enough in the medium or long term to generate fund to pay the principal with the interest, or such project is capable of improving the living standard of the people. If the latter is the case, tax can be introduced to recoup the investment made on the project. Both debt service and direct statutory transfer are priority for settlement. The more the allocation for these headings in the given sum, the lower the fund available for developmental projects and other government financial responsibilities. It is time for us to think out of the box rather than go for loan or aid at every slight opportunity.

Considering the expected income in the year mainly from oil receipt, VAT and other sources, the total proposed expenditure is far more than that of income which gives room for about N6.26 trillion deficits. In other words, the country is expected to generate N10.21 trillion from various sources of income and borrow the balance. Of this shortfall, N5 trillion is expected to be sourced domestically, N1.2 trillion is to come via drawings from bilateral and multilateral loans while over N90 billion expected from the proceeds of privatization.

Oil receipt which is the largest source of income is benchmarked at $57 per barrel with 1.88 million barrel per day at official exchange rate of $410.15. The parameter used here is good and is more of the conservative side. Past records showed that Nigeria produced over 2 million barrel per day. If all things being equal, the figure will be attained easily and beyond. After a worldwide decline in the spate of COVID-19 spread, global oil market has rebounded and still rebounding. This manifested in the current oil price hovering between $80 and $84 per barrel in the international market. This implies that excess is expected from this sub-heading of the budget.

In the 2022 proposed budget, inflation is anchored within the threshold of 13%. This is a dream taken too far. The present situation of things in Nigeria does not indicate serious crashing in the prices of goods and services from the currently 18% to average of 13% in the coming year. If the statement credited to the Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, while given comprehensive analysis of the said budget that subsidy will be removed from fuel and electricity by the mid next year is enforced, then inflation will go far beyond the estimate of 13%. However, if all necessary supports were given to the local refineries (the existing government refineries and the upcoming private refineries) to operate to a reasonable capacity, removal of subsidy will not have substantial effects on the prices of goods and services but save already declined foreign exchange from going down deeper.

The beauty of any budget lies in its implementation or performance. Evidence from past years showed that revenue performance was always low to the expectation. This made implementation difficult. For instance, in year 2020, the proposed revenue was N5.37 trillion while the actual revenue attained for the year was N3.42 trillion. This was a variance of 36.3%. You may say COVID-19 caused. To me, that is not a strong defence. There had been similar trends over the years. In 2018 when there was nothing like COVID-19, projected revenue was N7.12 trillion while the actual revenue attained was N3.48 trillion given a variance of 51.1%. Justification of various spending and cutting down on the allowances and benefits of the political office holders will close the gap between the proposed expenditure and revenue.

It is very clear that development of any nation is proportional to the financial and other commitments made to research and development. Commitment and funding of research institutions in various areas of human endeavor give a nation an insight of what the future holds and makes preparation for it. This is the magic wand of the developed economies in the world.

Richard Asoge
Clappahouse Analytics
chards001@gmail.com
O8081492614.

Business

Dangote Fuel Sells Cheaper In Togo Than In Nigeria – Falana Laments

Published

3 hours ago

September 15, 2025

Editor

Human rights activist Femi Falana, SAN, has lamented that fuel taken from Dangote is cheaper in Togo than in Nigeria.

Falana expressed his concerns on Sunday while responding to questions in an interview on Politics Today, a programme on Channels Television.

He urged the federal government to review the proposed 5 per cent fuel surcharge and ensure that further hardship is not imposed on Nigerians.

“I guess the government wants to go back to the drawing table and ensure that it is not accused of multiple taxes or double taxation because consumers will pay VAT for buying fuel. They will now put an additional 5 per cent tax.

“I think this is what Nigerians are complaining about. And from what we just read today is that the Dangote fuel taken from Nigeria is now cheaper in Togo than in Nigeria I think about 65 naira.

“So, the government will have to review these developments (the proposed 5 per cent fuel surcharge) and ensure more hardship is not imposed on Nigerians,” he said.

Business

Falana Reveals Those Behind Subsidy Removal

Published

3 hours ago

September 15, 2025

Editor

A Senior Advocate of Nigeria, Femi Falana, has once again criticised President Bola Tinubu’s removal of the fuel subsidy.

Speaking in an interview on Sunday’s Politics, a programme on Channels Television, the human rights activist stated that no country in the world has completely abolished subsidies.

“There’s no way you can remove subsidy completely. No country in the entire world has abolished subsidies completely.

“Even leading Western countries like the United States, the United Kingdom, France and others subsidise electricity, agriculture, and many aspects of the lives of their people.

“So, when the Nigerian Government said it was removing subsidies, as a matter of fact, if I must say this, it was the World Bank and the International Monetary Fund, IMF, that insisted that the government must remove all subsidies,” he said.

Business

‘We Like Greek Gifts,’ Nigerians Blast NUPENG Over Dangote’s Fuel Price Reduction

Published

2 days ago

September 13, 2025

Editor

The decision of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) to warn Nigerians against accepting Dangote Refinery’s recent fuel price reduction has drawn heavy backlash on social media, with many citizens mocking the union and embracing what they described as “much-needed relief.”

Dangote had announced lower petrol pump prices in several states alongside a new scheme to deploy compressed natural gas (CNG) trucks directly to filling stations, a move expected to reduce logistics costs.

But NUPENG dismissed the offer as a “Greek gift,” alleging that the refinery was undermining workers’ rights, sidelining the union, and pushing drivers into a rival association.

However, netizens have lambasted the union, querying that during hard times, NUPENG has never supported the masses.

On X (formerly Twitter), Nigerians quickly turned NUPENG’s warning into a trending topic, using humour and sarcasm to lampoon the union.

Oloye Somorin Osifeso (@OloyeSomorin) wrote: “We like Greek gifts in my garage.”

Just Jude (@JustJude) asked bluntly: “Is it your deception?”

Oladele (@Oladele) quipped: “As Dangote Refinery dey offer Nigerians Greek gift, why can’t NUPENG too offer Nigerians French gift?”

Agbalaka (@Agbalaka) queried: “Can they tell Nigerians what exactly they are fighting about?”

CBN Gov Akinsola (@Akinsola) joked: “Then give us Trojan gift now 😆. Man do man. Man no go vex.”

Omobalaji (@Omobalaji) teased: “NUPENG, oya surprise us with Arabian gifts.”

Habdulakeem Bahdmus (@BahdmusHabdulakeem) added: “If Dangote is showering Nigerians with Greek gift, NUPENG can also set up a Roman gift now.”

Femi Yekinni (@FemiYekinni) steered it back to reality: “We thank them for their advice. Now, @DangoteGroup pls how do we schedule deliveries to Badagry?”

Curtis Abbi (@CurtisAbbi) slammed the union: “Nigerians will manage the Greek gift. @officialNUPENG9, what gift have you given Nigerians in your entire years of existence? NUPENG should offer Nigerians their own Somalian gift 🤣.”

Akin Adejola (@AkinAdejola) echoed the sentiment: “LOL. I can bet Nigerians don’t mind the gift. NUPENG should gift Nigerians same ‘Greek gift’ too if they have any goodwill. NUPENG is the enemy of progress in the oil & gas sector.”

Adeola Akinwande (@adeolarewaju9) criticised union leaders: “Does NUPENG remember Nigerians at hard times? They have all failed Nigerians the same way the @NLCHeadquarters has failed. They are living big on unionism and cashing out big time. Without unionism, some of their excos are nobody. They should stop the crocodile tears.”

Okunwa U. U. Azikiwe (@OkunwaUUazikiwe) argued: “Competition has created jealousy by the previous monopoly in the sale of fuel. They have lost control, and it is paining them that they are no longer in control. SMH!!!”

Solihull Abdulkareem (@SolihullAbdul) chipped in: “NUPENG or whatever, do you want the market to be monopoly? You’ve been doing what you want for many years. It’s time for change, just accept it and move forward.”

Temidayo (@Temidayo) asked: “It’s a lie. What benefits has your union provided for Nigerians? Middlemen syndrome has been room for corruption. Your association should go and buy shares in Dangote and work together to make Nigeria great.”

And LegalTech Sam Akanbi (@SamAkanbi) summed up: “Nigerians no longer want your Nigerian gift, we want the Greek gift. If you have a better offer, we’d abandon Dangote’s Greek gift and take yours. But for now, let the Greek gift go round.”

Recall that NUPENG earlier alleged that Dangote Refinery was forcing truck drivers to abandon its union for a rival group, the Direct Trucking Company Drivers Association (DTCDA).

The union also accused Dangote of undermining collective bargaining rights and violating a Memorandum of Understanding (MoU) signed under government supervision.

Dangote, however, denies the claims, insisting that union membership remains voluntary and that its delivery scheme is designed to cut costs and ease supply.

The federal government has intervened, with the Ministry of Labour and the Department of State Services mediating between both parties.