Tuesday, November 09,2021 / 1:10 PM / by Budget Office of the Federation &Federal Ministry of Finance, Budget and National Planning

The Medium-Term Expenditure Framework and FiscalStrategy Paper (MTEF & FSP) is a major feature of the annual budgetpreparation cycle. It provides the basic structure for the estimates andassumptions that underlie the annual budgets. It is designed to facilitateseveral important outcomes: greater macroeconomic balance; improved allocativeefficiency inter and intra-sectoral resource allocation; greater budgetarypredictability for line ministries; and more efficient use of public funds.Integrating the top-down resource envelope projection with the bottom-upsectoral programme expenditure estimation ensures that the policymaking, planning,and budgeting processes are linked and developed into a body of consistentgoals to be achieved within a three-year period. This has become even moreimportant for developing economies as severe economic consequences in the wakeof the COVID-19 pandemic make the setting and attainment of development goalsimperative.

In developing this MTEF&FSP, the broad strategicobjectives of government for various sectors have been given extensiveconsideration. The expenditure framework reflects the resource constraints,government policies, and sector priorities within which decisions are made tomaximize socioeconomic outcomes. The MTEF&FSP also endeavours to makepublic expenditures more efficient and effective, essentially by allowing lineministries greater flexibility in managing their budgets in the context of hardbudget constraints and stipulatory policies and programmes. The MTEF&FSPwill seek to consolidate the gains of the Economic Sustainability Plan (ESP)2020 and to incept the drive for the attainment of important outcomes of theMedium-Term National Development Plan 2021-25 which include sustainable andinclusive Gross Domestic Product (GDP) growth, enhanced macroeconomic balance,improved resource allocation, and a well-diversified economy.

The effectiveness of medium-term perspective inbudgeting process on the economy depends ultimately on the credibility of theexpenditure estimates and ceilings as well as how this information is used bydecision-makers, the private sector operators, and civil society organisations.The Administration has demonstrated commitment to Public Finance Management(PFM) reforms in Nigeria. Extensive consultations with relevant stakeholders,rigorous analysis and supportive fiscal arrangements have been employed to ensurethat successive MTEF&FSP achieve the fiscal objectives through disciplinedimplementation of budgetary targets.

The 2022-2024 MTEF&FSP will provide guidance toMinistries, Departments and Agencies (MDAs) of the Federal Government in theformulation of policies and selection of projects and programmes to ensureeconomic development. The MTEF&FSP will also provide further impetus to theefforts at ramping up ongoing drive to accelerate investment in criticalinfrastructures and human capital, diversification of the government revenuebase for enhanced social welfare and sustained improvement in businessenvironment. Federal Government's annual budget for 2022-24 fiscal years,deriving from this MTEF&FSP will encapsulate government's plan toaccelerate our economic recovery process, promote social inclusion andstrengthen resilience of the economy.

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