Nigeria to spend N1trn on subsidy payment in 2022

Fuel subsidy payment will cost states and local governments about N1 trillion in 2022, a letter from President Muhammadu Buhari has indicated.

Buhari in the letter to the National Assembly said the federation fund, which belongs to the three tiers of government will reduce by N2 billion as the federation will spend N2.5 billion on petroleum subsidy.

Out of the N2 trillion, the federal government will bear N1.05 trillion, leaving states and local governments to bear the rest of the cost for subsidy.

President Muhammadu Buhari had in the letter said the deficit of the federal government will increase by N1.01 trillion, moving from N6.4 trillion to N7.4 trillion.

“Total budget deficit is projected to increase by N1.01 trillion to N7.40 trillion, representing 4.01% of GDP. The incremental deficit will be financed by new borrowings from the domestic market,” the letter read in part.

It would be recalled that the federal government had resolved to extend the subsidy regime for 18months after Nigerians opposed the planned withdrawal

Furthermore, the president said the government was proposing the deletion of capital projects duplicated in the 2022 budget.

“It is also absolutely necessary to remove all capital projects that are replicated in the 2022 Appropriation Act; 139 out of the 254 such projects totalling N13.24 billion have been identified to be deleted from the budget.”