Nigeria’s 2022 Federal Executive Budget for MDAs: Watch out for these 5 Ministries!
The 5 ministries with the highest allocation in the MDAs Approved 2022 Budget for MDAs, namely, the Ministry of Finance, Budget and Planning, the Ministry of Defence, the Ministry of Education, the Ministry of Health, and the Ministry of Police Affairs are to receive 69% of the total MDAs budget allocation and 71% of the total budget for Personnel of MDAs.
According to a copy of the 2022 Appropriation Bill As passed from the Budget Office, President Buhari signed the budget worth N17.13 trillion into law on the 31st December 2021.
“The 2022 Budget that I just signed into law provides for aggregate expenditures of N17.127 trillion, an increase of N735.85 billion over the initial Executive Proposal for a total expenditure of N16.391 trillion.”, the President noted.
The N17.13 trillion budget covers expenditures of the Federal Executive, Legislature, the National Judicial Council and other Agencies that draw on the consolidated revenue fund for their expenses.
However, the Federal Executive alone has budgeted to spend a total sum of N14.77 trillion via all the MDAs drawing their incomes directly from the Executive arm of the Government.
According to the MDAs Approved 2022 Budget details retrieved from the Budget Office, of this amount, N5.54 trillion is to defray overhead costs, N4.88 trillion is to cover personnel costs, and N4.35 is meant to be spent on capital projects.
Source: Budget Office; Dataplex; Dataphyte Research
Apart from these 5 ministries having the highest total budgetary allocations and receiving the highest incomes for their staff, 3 of them are also among the 5 ministries who share 96% of the total provision for overhead costs, namely the Ministry Finance, Budget and National Planning, Ministry of Defence, and the Ministry of Education.
Also, 2 of these 5 ministries are among the 5 ministries that received 53% of the Budget for Capital projects.
How the 5 Ministries Share 69% of the MDAs Total Budgetary Allocation
Among the 5 ministries with the highest allocations in the 2022 budget, The Ministry of Finance, Budget and National Planning took the lead.
The others in descending order are: the Ministry of Defence, N1.20 trillion; the Ministry of Education, N923.79 billion; the Ministry of Health, N724.92 billion; and the Ministry of Police Affairs, N559.11 billion.
These top 5 funded federal Ministries would together cost the federal executive 69% of the entire 2022 budget. This points to Ministries, Departments and Agencies (MDAs) the Government prioritises over the rest, going into the new year 2022.
71% of the MDAs Budget is meant for Staff who help Battle Indebtedness, Insecurity, Illiteracy, and Infirmity
For the 5 ministries that will receive the highest total budgetary allocation (Finance, Defence, Education, Health and Police), it will cost the Federal Executive 71% of its total personnel expenditure to cater for their staff.
The only difference here is that while the Federal Ministry of Finance, Budget and National Planning, leads the other 4 Ministries in the total budgetary allocation, it comes second to the Ministry of Defence in total allocation for its personnel.
The other 3 Ministries (Education, Health and Police Affairs) maintain their ranking in the personnel budget as in their total budgets.
For the Federal Ministry of Finance, Budget and Planning, in particular, N6.37 trillion out of the N6.81 trillion to be domiciled with it is meant for its officials to settle government debts and other discretionary spendings of the President. This amount is equivalent to 94% of the Ministry’s allocation and 43% of the total 2022 Budget.
So, if 94% of the allocation to the Ministry of Finance, Budget and National Planning would be spent on debt servicing and statewide votes - a slush fund for the President to spend as he pleases, it appears this is the chief reason why the employees in this ministry report for work every day.
53% of the MDAs Budget for Capital Projects allocated to Finance, Education and 3 other Ministries
The Federal Ministry of Finance, Budget and National Planning and the Federal Ministry of Education (FMOE) rank 1st and 5th among the 5 MDAs with the highest budget for Capital Expenditures.
The Ministry of Finance, Budget and National Planning has the highest Capital budget of N940.96 billion. This alone amounts to 21.6% of the 2022 Capital Budget.
Next to it in descending order are the Federal Ministry of Works and Housing, N450.03 billion; Federal Ministry of Agriculture and Rural Development, N404.25 billion; Federal Ministry of Power, N299.97 billion; and the Federal Ministry of Education, N222.21 billion.
Together these 5 Ministries alone are to spend 53.3% of the total Capital Budget of N4.35 trillion for the fiscal year 2022 while the remaining 39 federal MDAs spend the remaining 46.7% of the Capital Budget.
96% of MDAs Total Overhead Costs is to be borne by Finance, Defence, Education, and 2 other Ministries
The 5 ministries with the highest overhead costs together bear 96% of the total overhead costs of the Federal Executive for the 2022 fiscal year. The remaining 39 MDAs cost the government only 4% of overheads.
Yet, 3 out of the 5 ministries with the highest budgetary allocation, Finance, Defence and Education alone, are to incur 92% of the overhead costs.
Of these, 90% is borne by the Ministry of Finance, Budget and National Planning alone.
The 2 other ministries that make up the 5 with the highest overheads are the Ministry of Humanitarian Affairs, Disaster Management and Social Development with a distant second highest allocation of N182.88 billion. The 5th is the Office of the National Security Adviser with N35.39 billion
43% of the MDAs’ Budget is to service Debts and to fund the President’s Discretionary Spendings
Of the N6.81 trillion set aside for the Ministry of Finance, Budget and Planning, N3.8 trillion is meant to service local and external debts that the Federal Executive incurs. Allocation for Debt servicing alone is well over one quarter (26%) of the Total 2022 Budget worth N14.77 trillion.
Besides, the Budget arm of the ministry also provided N2.49 trillion for Service Wide Vote (SWV), which twice surpasses even the Defence budget of N1.2 trillion. SWV alone accounted for 17% of the Federal Executive budget for 2022.
A Dataphyte report had described how this huge allocation is the most opaque in its spending purposes. It noted that MDAs usually do not properly account for their SWV spendings to the Senate Committee on Public Accounts nor subject same for due audit by the Auditor General of the Federation.
Dataphyte reported that the arbitrary allocation for Service Wide Votes serves more or less as a slush fund for the President’s discretionary spending:
“In fact, the Senate described the SWV as the biggest fraud in Nigeria, stating that even the Standing Committees of the Senate do not know anything about its spending.
The Chairman of the Senate Committee on Public Accounts, Senator Matthew Uhroghide, complained about the SWV noting that they [his committee] had yet to find out how disbursement for SWV both recurrent and capital expenditure are being utilised.
According to the Lawmaker, his committee has made several attempts in the past years to ensure that heads of Ministries, Departments and Agencies (MDAs) give accounts of what they got from the SWV but all efforts have been futile.”
The Dataphyte report also noted that “Surprisingly, this huge fund has never been audited.
Thus, the Federal Ministry of Finance, Budget and National Planning keeps just below one-fifth (17.2%) of the annual budget for an elected official to spend as he pleases!
Like the country’s compulsive sourcing of Debt funds and profligate spending of the same, it is uncertain whether Service Wide Votes are really meant to cater for unforeseen eventualities or to cover for foreseen embezzlements of hard-earned state funds. The history of the disposal of the SWV supports the latter hypothesis.
“SWV are slush funds – bulk allocations without breakdown, it is susceptible to corruption. The Dasuki-Gate arms fraud and Babachir Lawal N500 million Grass Cutting Scandal are clear examples.” The Dataphyte report, submitted.
The report also linked spikes in allocation to SWV around election periods to campaign finance violations.
Nevertheless, these 2 controversial expenditures - debt servicing and discretionary spendings of the SWV, together make up over 43% of the 2022 Budget.