The budget call circular from the Ministry of Finance Budget and National Planning shows that the 2022 budget will be less than 2021. The Federal Government of Nigeria (FGN) has set a budget expenditure ceiling of N13.98 trillion for the 2022 fiscal year. This figure comprises a fiscal revenue of N8.762 trillion, and N5.218 trillion will be incurred as the deficit.
The addition of the main 2021 budget (N13.58 trillion) and the supplementary budget (N982 billion) is N14.6 trillion. When compared with the 2022 expenditure ceiling of N13.98 trillion.
The Minister of Finance, Budget, and National Planning, Zainab Ahmed, made this known in the FGN Budget Call Circular released from her office. By this document, the 2022 budget process is kick-started with MDAs expected to follow guidelines there in their estimates.
Based on the ceiling allocation, recurrent expenditure for 2022 is capped at N6.21 trillion. This figure is 7.57% more than the N5.773 trillion approved for the 2021 budget. By this, recurrent expenditure will take 44.4% of the entire budget.
2022 Capital expenditure is below benchmark
The Federal Government has the capital expenditure at N3.61 trillion in the 2022 budget. This is a drop from N4.462 trillion in 2021. The capped amount for the 2022 budget is 19.1% decrease from that of 2021.
Moreso, capital expenditure makes up 25.8% of the total budget spending in 2022. Following the capped figure, capital expenditure is short of the 30% benchmark set by the current administration.
However, expenditures on debt servicing, sinking funds, and statutory transfers are all expected to increase in the 2022 budget.
The finance ministry placed a capital expenditure ceiling to be adhered to by all MDAs under each economic function. Based on the approved ceiling, economic affairs received the highest proportion of capital allocation. Economic affairs capital expenditure is capped at N847.32 billion. This is 48.15% of the total capital allocation.
General public service is to receive N217.14 billion for capital expenditure in 2022. This figure makes up 12.34% of capital expenditure.
Defense, health, and education are to receive 7.33%, 6.15%, and 5.73% of capital budget allocation in 2022, respectively.
The Medium Term National Development Plan (MTNDP) for 2022 has provided a guideline on how all MDAs allocate capital expenditure. The plan prioritizes infrastructural development with more funds to be allocated for this purpose. The directive has stipulated that N624.34 billion of capital expenditure be channeled towards providing infrastructures across the country. By this, 35.5% of capital allocation is to be spent on infrastructure.
Public administration and safety are expected to take a total of N477.87 billion in 2022. This amount is 27.2% of capital allocation.
Human capital development, social development, and economic growth & development are expected to get 11.88%, 11.45%, and 11.22% of total allocations for capital projects in 2022, respectively.
The MTNDP guide for all MDAs concerning capital expenditure shows that the Ministry of Works will get the highest allocation in 2022. One in every five capital projects will be from the ministry as it got the sum of N352.66 billion. This makes up 20% of the total capital expenditure.
The Ministry of Works is the only ministry expected to spend 20% of the capital expenditure. Other MDAs all got a proportion less than 10% as the next MDA to that of Works, Finance, Budget & National Planning is expected to spend 8.98% of capital allocation in 2022.
By the document, the sum of N24 billion is kept aside as capital reserve for 2022. Based on the capital ceiling placed, the ministry retains the power to cut down the amount put forward by any MDA above its stipulated limit.