Is the Nigerian budget a right fit for the economy?

Oct 15, 2021|Adesola Afolabi

The scribbling pen on a brand new notepad; the muted taps with words gently forming across a screen. One promise after the other, we lay down well-intentioned hopes to help achieve a goal for a new job or a new year.

People plan, and plans fail. People also plan and succeed. For many, achieving a goal boils down to how realistic, simple or disciplined you can be with your idea. As for Nigeria, its financial plan (The 2022 Appropriation Bill) is out. It's barely three months left until next year, and the President has presented the bill to the national assembly.

Some takeaways:

The national budget has grown 3x bigger from ₦4.5 trillion to ₦14 trillion in the last five years, but more Nigerians are poorer (44%) today than (38%) in 2015 and GDP per capita has shrunk to $2,000 from $3,000 in 2014.
65% of the proposed 2022 budget goes to non-debt and debt recurrent expenditure (₦10.1 trillion), which is 18% higher than this year's recurrent costs.
Oil accounts for 31% of the projected ₦10.1 trillion revenue. Despite a conservative $57 per barrel price, there are low chances of achieving the projected production capacity of 1.88 million barrels daily.

The finance minister has also explained to the public, the budget's details, which will likely be ready for implementation as the new year kicks off, making a third consecutive year for a full January-December budget implementation possible. But Nigerians have been asking: why is the 2022 budget 12% (₦2 trillion) higher than this year's budget, is this increase justifiable, and how will it all benefit me?

Let's start with the last question.