Nigeria’s 2022 Budget — Your Guide to Another Bogus Budget

'Tosin Adeoti
12 min readOct 16, 2021


Many people have said that analyzing Nigeria’s budget is a waste of time as it has proven to be a jamboree. However, because it is what we have penned down that will likely remain when this administration is gone, it is important to put our analysis out there to show how the country is in the Year 2021 as a guard against revisionists. This occurred to me when an economics student reached out to me after reading an edition of Freshly Pressed newsletter where we reported that President Buhari presented the National Assembly with the budget for the 2022 fiscal year. (fiscal technically means financial and it is a term reserved for the government as it relates to taxation, public revenue, and debt.). He wanted to know what it means and how it applies to him.

Nigeria’s 2021 Budget

In my personal finance classes, one of the very first things I teach is budgeting. Budgeting makes you create a plan for your spendings. I have often said that past a certain income level, it is not what you earn that matters but what you are able to keep. It is an essential part of a disciplined life. Patrick Rush, a Forbes’ recognized financial advisor to several wealthy people said that one of the most important things wealthy people do is create financial plans for themselves. Fortunately, for countries, it is a constitutional requirement for the leader of the state to present a plan of how public funds will be generated and spent.

Therefore, on October 7, President Buhari presented the 2022 budget to the National Assembly; a record 16.39 trillion in naira terms. Nigeria’s budget continues to increase in naira terms. From N700 billion in 2000 when we returned to democracy, the budget has grown 20 times to the proposed figure for 2022. In the last five years alone, the national budget grew three times from N4.5 trillion in 2015 to ₦14 trillion in 2020.

If you have heard that the president presented the appropriation bill and you are confused, what it means is that a law was proposed by the executive arm of the government to authorize them to spend government funds. Without the legislative arm agreeing to pass that law, the executive cannot touch the funds. It should not be taken for granted that the budget is ready to be passed at this time. It is to be commended that we may be seeing the budget ready to be implemented as the new year kicks off. In fact, this is the third consecutive year that a full year — January to December — budget implementation will be possible. It used to be quite comical. For instance, in 2017, the National Assembly did not pass a budget meant for that year until October of that year — 5 months after the year had begun.

This happens for several reasons including bad blood between the executive and the legislative. Several times the National assembly had asked the executive to increase their budget and the executive refused. Most times, the National assembly, which is already one of the most remunerated in the world, gets its way. Already, a member of the House has said that the amount allocated in the 2022 appropriation bill is inadequate. He called for an increase in the allocation to the National Assembly “for it to fulfill its mandate”. This is despite the House’s refusal to give details of its annual budgetary allocations like other ministries of the government, and the inclusion of an extra N6 billion to the initial N125 billion allocated. There are insinuations that the notorious National Assembly will up the figures again before passing the budget.

Key Issues in the Budget

The shenanigans of the National Assembly in passing the budget is not the most serious part of the budget. The more important issue is that the ₦16.39 trillion is an unrealistic budget. When you decide to make a budget, you consider how much you are expecting as revenue to decide what your expenditure would be. Not Nigeria. Nigeria consistently projects unrealistic revenue. In 2020, Nigeria projected to generate N5.3 trillion but could only generate N3.93 trillion. (8) Since 2016, the Buhari administration has been able to generate only 55% of its projected revenue. In 2022, it is projecting to generating $10.13 trillion. Where will the funds come from? I will talk about this in a bit.

It should be noted the reasons why the projection is considered misguided. A look at the line item from Grants and Aid shows that the government expects to receive N63.38bn in 2022. This is despite the fact that according to Businessday, this source has produced nothing since 2018 per the budget implementation reports available on the website of the finance ministry. (9) The oil and non-oil projected revenue are also off the mark considering where we are. For instance, as of July 2021, total non-oil revenue has only met a pro-rated target of 73%. (10) For the oil revenue, Nigeria says we will produce 1.8 million barrels per day next year. This year, we have only been able to produce 1.2 million barrels despite OPEC increasing the quota to 1.6 million. (11) Only a target of 56% of the revenue from oil has been achieved so far.

All these are to say that the government already knows that its revenue projection is not feasible. So where cometh the confidence to continue making the projections?

The Unending Debt

Since Muhammadu Buhari got into office, the rate of accumulating debt has been legendary. When the Jonathan administration came to an end in 2015, Nigeria’s total foreign debt was $7.3 billion. As of December 2020, the Buhari government has increased the debt to $28.57 billion. This means that the president incurred $21.27 billion on foreign loans to the country’s debt portfolio. Overall, the current administration has accumulated a debt of N17.06 trillion as of March 2021. This is a 173.2 percent increase from when he was elected president in 2015. (12)

What is concerning about this debt is that the current administration borrows these funds in violation of existing financial laws in the country. The ministry of finance herself admitted that the Fiscal Responsibility Act is being flaunted as the federal government exceeded its 3 percent fiscal borrowing threshold. (13) Last month, I joined two of my friends to sue the Central Bank of Nigeria to court (14) for breaching the law stipulating that overdrafts to the government by the CBN should not exceed 5 percent of the previous year’s actual revenue. (15) By the end of 2020, CBN overdrafts to the Buhari government exceeded the limit by 69 percent of the revenue generated in 2019.

Just as individuals are required to pay their debts, it is even more important that countries pay their debts. Therefore, as a result of debt accumulated, Nigeria is having to spend 74% of its revenue to service its debt. (16) Earlier this month, even the respected General Overseer of the RCCG, Enoch Adeboye, lamented the high rate of debt service in Nigeria. He said those close to the government have told him that the country uses 91% of what it generates to service debts. (17) Ironically, a few days later, a member of his congregation, Vice President Yemi Osinbajo, came out to say Nigerians should not panic over the nation’s rising debts. (18)

Should Nigeria’s Debt Worry You?

While Muhammadu Buhari is taking more debts — he is seeking another approval to borrow another $5 billion from the National Assembly (19) - he is actively calling on Nigeria’s debtors to forgive the country’s debt. Just some days after he made that request to NASS, he was at the 76th Session of the UN General Assembly in New York to appeal to ”rich nations” and international financial institutions for outright debt cancellation for Nigeria (20). This was just a few weeks after he received approval from NASS to borrow $9 billion; a figure which outraged the opposition party, PDP. (21)

The Nigerian government believes that debt is the only feasible route to the nation’s development. As it is, Nigeria is one of the countries in the world with the most exposure to debt risk according to the World Bank. (22) Experts say that the projects financed by these loans upon analysis would not have any meaningful impact on the economy, therefore it will be a lose-lose situation.

Former President Obasanjo has called this administration’s appetite for loans for the next generation to pay ‘criminal’. (23) Obasanjo knows a thing or two about loans. In 2006, he paid off Nigeria’s external debts. (24) Regarding the loans being piled up by this administration, he stated that “If we are borrowing for recurrent expenditure, it is the height of folly. If we are borrowing for development that can pay for itself, that is understandable. Then the payment, how long will it take to pay itself?” The World Bank Country Director for Nigeria, Shubham Chaudhuri, in a June 2021 report said that as it stands Nigeria “faces interlinked challenges about inflation, limited job opportunities, and insecurity”. (25) This makes the utilization of these loans to impact lives difficult because the loans are not being appropriately channeled. While the government says it is taking the loans for infrastructure, the World Bank report states that a lack of commitment to the necessary reforms will hinder progress.

To be clear, more borrowings mean that an increasing proportion of revenues generated will be devoted to debt service. And with reports that foreign investors’ interest in Nigeria has declined by 27.5%, it shows how difficult a terrain investors find the business and economic climate. (26)

“Do I see the plans that these borrowings will facilitate the diversification of the economy? My straight answer is No, I do not see the plan.” This was said by Pat Utomi, Professor of Social and Political Economy at the Pan-Atlantic University. A view that many experts continue to echo. (27) The chairman of President Muhammadu Buhari’s Economic Advisory Council (EAC), Dr. Doyin Salami, has said Nigeria’s current public debt stock is unsustainable. (28) Muhammad Enagi, Vice Chairman of the Senate Committee on Foreign and Local Debts, in March 2020, aptly noted that “the big question in the minds of average Nigerians aware of this fact is, what did we do with the money? In other words, where did the money go? (29) What do we have to show as a people for these huge debts?” He is from the President’s party.

What Should You Do?

As usual, in many analysis, I reserve the last section to discuss possible actions that the individual Nigerian can take. I have desisted from telling the government what to do because the mis-actions are not for lack of advice. Dr. Salami has outlined what is to be done several times and they have all being ignored. I have written several articles about practicable actions, and the responses I get from the administration’s supporters are mockery. Mr. Fashola, the Minister of Works and Housing, has lampooned those against the incessant borrowing by saying, ‘It is Home Economics they know; they don’t know Public Finance’. (30)

So yeah, it is not for lack of advice that they have decided on this path. So I don’t want any Buharist telling me to provide solutions. I am not even being elected or paid to solve Nigeria’s problems. My responsibility is to Nigerians reading this. You may already have guessed that it’s unlikely 2022 will be different from past years if we continue on this path. Despite increasing the budget three times in the last five years, more Nigerians are poorer today than in 2015 (44% vs 38%). (31) The GDP per capita has reduced ($2000 vs $3000). (32) Nigeria is budgeting more on recurrent expenditure today than on capital expenditure that will create future wealth. Nigeria is not spending on the economy which leads to business growth and the attendant effect of rising employment rate. In other words, the underlying cause of rising insecurity such as high poverty level and lack of economic opportunities are not going away anytime soon. So, here are a few tips for you:

  • Target Fast Growing Sectors. Data from the National Bureau of Statistics show that the fastest growing sectors in the Nigerian economy include the Information and Communication sector, Electricity, Gas, Steam and Air Conditioning Supply sector, and Water supply, Sewerage, Waste Management, and Remediation. (33) Fast-growing sectors imply that those operating in these industries earn significantly more profits than those in the other sectors of the economy. Because of this, they are able to attract investments into their sectors, which means there will be more opportunities for job growth and creation. With all the incentives put in place by this administration and state governments, mechanized agriculture is also a great sector, IF you can battle the challenges of insecurities.
  • Brace Up for More Food Inflation & Devaluation. It was preposterous to see that the exchange rate in the budget was pegged at N410. The Vice President himself gave himself away when he said the N156 spread between the dollar at the banks and that in the black market is too wide, tacitly endorsing devaluation. (34) Some have faulted this stance but as I say, reality will always catch up. The President in 2015 said he was never going to devalue but reality caught up with him. From N200 to a dollar, Nigeria has devalued 105% to N410. If you think we can continue with this huge spread between these markets, then you have not been paying attention to Nigeria’s economic realities. Devaluation means things will become more expensive because we import most of what we consume. So what can you do now to guard your self? Put on your thinking caps.
  • Make a Deliberate Effort to Increase Your Income. While millions of people fell into poverty between 2015 and now, some intentionally found ways to earn more. There is no reason that cannot be you. One of your privileges is reading this article that is encouraging you to prepare. Upskill and reskill yourself. Get in-demand skills and be intentional about your career. In my personal finance classes, I teach that young people should not stay more than 2/3 years in a job because my observation is that Nigerian employers are not inclined to baseline salaries against the dollar. So while you may earn the same in naira terms, inflation will ensure that you have much less to spend. One of the surest ways of increasing your income is going to another employer.
  • Earn, Save and Invest in Dollars. Because of Godwin Emefiele’s crackdown on the dollar in recent times, I will not say more on this but many of my articles and posts are dedicated to this topic.
  • Is going abroad an option for you? Bryan Caplan, an economist at George Mason University, in his latest book “Open Borders: The Science and Ethics of Immigration” made this striking observation, “By moving to the US and receiving no additional training or education, the average citizen of a developing country can expect their income to increase fivefold; and for countries like Nigeria, tenfold.” (35)

So that’s it. Your guide to Nigeria’s 2022 budget and how you can protect yourself in the coming year.


35. Open Borders: The Science and Ethics of Immigration: Caplan, Bryan, Weinersmith, Zach: 9781250316967: Books



'Tosin Adeoti