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

NNPCL Raises Fuel Price

Published

2 weeks ago

October 13, 2025

Editor

The Nigerian National Petroleum Company Limited (NNPCL) has increased the pump price of petrol from ₦865 to ₦992 per litre, marking a fresh hike that has sparked widespread concern among motorists and consumers .

As of the time of filing this report, the company has not released any official statement explaining the reason for the sudden adjustment.

During visits to several NNPC retail outlets, The Nation observed fuel attendants recalibrating their pumps to reflect the new price.

At NNPC filling station on Ogunusi road, Ojodu Berger, petrol attendants at the station said they were instructed to change the price to reflect the new rate N992 per litre.

However, checks at Ibafo along the Lagos /Ibadan expressway showed that NNPC outlets still displayed the old price of N875 per litre, although they were not selling to commuters.

Most of the NNPC stations were not dispensing fuel.

Business

CBN Directs Banks To Refund Failed ATM Transactions Within 48hrs

Published

2 weeks ago

October 11, 2025

Editor

The Central Bank of Nigeria has directed Deposit Money Banks and other financial institutions to refund customers for failed Automated Teller Machine transactions within 48 hours, in a sweeping reform aimed at protecting consumers and restoring confidence in the banking system.

The directive is contained in a draft guideline released by the apex bank on Saturday, titled “Exposure of the Draft Guidelines on the Operations of Automated Teller Machines in Nigeria.”

The document, signed by Musa I. Jimoh, Director of Payments System Policy Department, was circulated to banks, payment service providers, card schemes, and independent ATM deployers, with a call for stakeholder feedback by October 31, 2025.

Under the draft, failed “on-us” transactions, where customers use their own bank’s ATM, must be reversed instantly. If technical glitches prevent immediate reversal, the bank is required to manually refund the customer within 24 hours.

For “not-on-us” transactions, involving other banks’ ATMs, refunds must be processed within 48 hours.

“Customers must not be made to suffer for failed transactions caused by system errors or network failures,” the circular stressed.

In a significant shift, the CBN mandated banks and ATM acquirers to deploy technology that automatically reverses failed or partial transactions, removing the need for customers to lodge complaints.

Institutions holding customer funds due to failed disbursements must reconcile and return balances immediately.

According to the apex bank, these measures respond to widespread frustration over delayed refunds and poor customer service and form part of a broader effort to enhance consumer protection, improve reliability, and modernise Nigeria’s payment infrastructure in line with global standards.

The guidelines will also overhaul ATM operations nationwide. Banks and card issuers are now required to deploy at least one ATM for every 5,000 active cards, with phased targets of 30% compliance in 2026, 60% in 2027, and full compliance by 2028. Any future deployment, relocation, or decommissioning of ATMs must receive prior approval from the CBN.

To ensure safety, ATMs must be fitted with anti-skimming devices, CCTV cameras, and placed in enclosed or well-lit areas.

Machines are expected to comply with Payment Card Industry Data Security Standards, maintain audit logs, and display functional helpdesk contacts. At least 2% of all ATMs must feature tactile symbols for visually impaired customers.

ATMs are also required to dispense cash before returning cards, allow free PIN changes, issue receipts for all transactions except balance inquiries, display clear transaction fees, dispense only clean banknotes, and provide backup power to reduce downtime.

Downtime must not exceed 72 consecutive hours, after which operators must inform the public of the cause and expected restoration time.

The CBN will enforce compliance through regular audits, on-site inspections, and monthly reports from ATM operators detailing deployments and locations. Defaulting institutions risk sanctions, though fines were not specified.

The apex bank explained that the overhaul was necessary due to rising complaints about failed transactions, cyber fraud, and declining service quality, noting that “the goal is to build a payments system that works seamlessly for everyone, urban and rural users alike.”

Nigeria’s electronic payments landscape has grown rapidly in recent years, with 200 million cardholders and rising reliance on digital banking, but network failures, poor infrastructure, and delayed reversals have continued to undermine confidence.

The fresh guidelines, coming eight months after a revision of ATM fees, are expected to streamline service delivery, enhance transaction security, and hold banks accountable. Stakeholders are invited to submit feedback ahead of the final policy adoption, which could take effect before the end of the year.

Business

Nigerian Stock Market Hits 10th Consecutive Uptrend As investors Gain N308bn

Published

3 weeks ago

October 10, 2025

Editor

The Nigerian Stock Market recorded its 10th consecutive uptrend as investors raked in N308 billion gain on Thursday.

This comes as the Nigerian Exchange Limited, NGX, market capitalisation, which opened at N92.490 trillion, appreciated by 0.33 per cent to close at N92.798 trillion on Thursday.

Also, the All-Share Index added 0.33 per cent, or 485.25 points, to close at 146,204.34, compared with 145,719.09 recorded on Wednesday.

Increased trading in Eunisell Interlinked, Caverton Offshore Support Group, Sunu Assurances, Industrial and Medical Gases, Mecure, and 27 other advancing stocks boosted market performance on Thursday.

To this end, the market breadth also closed positive with 32 gainers and 21 losers.

Further analysis showed that Eunisell Interlinked and Caverton Offshore Support Group led the gainers’ chart by 10 per cent each, closing at N44 and N6.93 per share, respectively, while FTN Cocoa Processors led the losers’ table by 6.67 per cent, closing at N5.60 per share.

Market activity showed a decline in the number of deals and volume traded but an improvement in trade value.

Accordingly, a total of 346.99 million shares worth N27.43 billion were traded in 24,691 deals, compared with 525.72 million shares worth N13.61 billion exchanged in 25,597 deals on Wednesday.

Fidelity Bank topped the activity chart with 42.01 million shares valued at N861.54 million.

According to DAILY POST, NGX has continued its bullish run from last month’s end to date.