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PwC bulletin: Nigeria's 2022 Budget Highlights

PwC bulletin: Nigeria's 2022 Budget Highlights

Nigeria's President, Muhammadu Buhari presented the 2022 Budget on 7 October 2021, to the Joint Session of the National Assembly.

Highlights

  • The 2022 budget has a deficit of about  N6.25tn, approximately 3.39% of GDP.  This is slightly above the 3% ceiling set by  the Fiscal responsibility Act 2007 (FRA). However, the president alluded that the expenditure level was necessary to assist  with overcoming current security  challenges and accelerate post-recession  growth. The President insists that Nigeria only has a revenue challenge and not a debt sustainability problem.
  • The deficit is expected to be financed by new borrowings, privatisation proceeds and drawdown on loans secured for specific projects. 
  • Non-debt recurrent expenditure of N6.83tn is the largest expense item, with 60%  relating to personnel costs at N4.11tn.

Download the document below to learn more.

 

Key takeways:

There have been concerns about Nigeria’s  rising debt profile especially debt service to  revenue ratio as well as foreign exchange  liquidity constraints, both of which have been  exacerbated by the COVID-19 pandemic.

While some of the revenue generating  initiatives in the budget are commendable, a  key focus area may be to explore avenues to  diversify export revenue sources away from  crude oil, which currently accounts for more  than 80% of total foreign exchange receipt.

Concerted and coordinated efforts are required to improve the policy environment and address insecurity in order to boost  domestic investment and attract foreign direct investments. 


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