Aniefiok Christopher
As plans for 2022 budget begins to gather sparks, the Akwa Ibom State House of Assembly joint Committees on Appropriations & Finance and Economic Development has received year 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).
The Commissioner of Economic Development and Ibom Deep Seaport, Mr. Akan Okon who presented the Median Akwa Ibom Ibom MTEF/FSP framework at the joint committee meeting Tuesday at the Conference Room of Akwa Ibom State House of Assembly said the State Government has made projection to spend N582.115 billion in the 2022 fiscal year.
Okon who was represented by the Permanent Secretary in the Ministry, Mr. Effiong Ekpenyong hinted that year 2022-2024 MTEF/FSP is the maiden legal document to guide the fiscal operations of Akwa Ibom Government since its creation in 1987.
He stated that the 2022-2024 MTEF/FSP is a standard policy tool which set out a three-year expenditure plan, and the review of Government expenditure for the last two years with a comprehensive documentation and analysis of Government debt profile while keeping in view the micro economic picture of the country from which the assumptions were derived.
The Commissioner stated that 2022-2024 MTEF/FSP is prepared against the backdrop of global economic recovery, amidst improved global vaccination against COVID-19 which assures lower incidence of (COVID-19) infection.
Interestingly, the Commissioner said the major MTEF objectives are hinged on achieving Gross Domestic Product (GDP) growth of 5.5 percent or higher, reduce unemployment, increasing revenue to GDP ratio to 20% by 2024 and rationalising unproductive expenditure.
Other objectives include containing budget deficit to not more than 3.0% of the GDP by 2024, achieving primary surplus by 2024 and beyond and reducing government Debt to GDP ratio to at most 4-5% by 2024.
With the rising prices of crude oil in the international market, Mr. Okon said that the framework had a benchmark of $57 per barrel in 2022, and would maintain the same $57 per barrel in 2023 and 2024, respectively.
The National Real GDP growth rate is projected to fall from this year’s revised projection of 2.50% per cent to 2.30% per cent in 2022.
According to the MTEF/FSP, the National GDP growth rate would still maintain its 2.30% per cent in 2023 before rising to 2.50 per cent in 2024.
The Gross Domestic Product (GDP) growth rate is projected to rise from this year’s projection of 2.5 per cent to 4.20 per cent in 2022.
According to the MTEF/FSP, the GDP growth rate would fall to 2.3 per cent in 2023 before rising to 3.3 per cent in 2024.
On oil revenue performance, the Commissioner said the gross oil and gas revenue for 2021 is projected at N5.19 trillion, and as at May 2021, N1.49 trillion was realised out of the prorated sum of N2.16 trillion, representing 69% performance.
He explained that oil and gas deductions were N194.32 billion representing 45.8%, exceeding the 2021 budgetary provision.
The Commissioner added that after deductions – including 13% derivation, net oil and gas revenue cash inflows to the Federation Account amounted to N872.16 billion, as against the N864.20 billion representing 49.8% less than the projected figure as of May, 2021.
He stated that N2.78 trillion was available for distribution from the Federation Account.
Further breaking down the distribution formula, Mr. Okon said of this amount, from the Main Pool Account, the Federal Government received N998.57 billion, while the States and Local Governments received N506.59 billion and N390.48 billion.
Also, Federal Government, State Government and Local government received N132.70 billion, N442.33 billion and N309.63 billion respectively from the VAT Pool Account.
On the expenditure side, he stated that between January–May 2021, N4.86 trillion (representing 92.7% of the prorated budget) has been spent.
According to him; “This excludes project-tied debt expenditures. Of the expenditure, N1.80 trillion was for debt service (37% of FGN expenditures); and N1.50 trillion for Personnel cost, including Pensions (31% of FGN revenues). As at May, N978.13 billion had been released for capital expenditure.”
Speaking on the targets of the framework, Mr. Okon the key targets for Akwa Ibom State Government from a fiscal perspective include attainment of a recurrent to capital expenditure ratio of 45:55, 40:60 and 35:65 by 2022, 2023 and 2024.
Effective management of personnel and overhead expenditure are to create additional fiscal space for capital development, annual growing of IGR by minimum of 15% in 2022, 12.5% in 2023 and 12.5% in 2024, among other developmental targets.
He also said that according the GDP growth of the State some sectors have been identified for revitalizing among such are; agricultural, real estate, education and health (human capital) construction and transport for rapid industrialisation that shall bring about sustainable growth and human welfare.
In his reaction, the Chairman, House Committee on Appropriations and Finance, Mr. Uduak Odudoh and member representing Ikot Abasi/Eastern Obolo State Constituency received the document on behalf of the Joint committees and assured using it as a working document throughout the budgetary estimates defence exercise and after.
