FG Plans N11.3trn Budget Deficit For 2023
The budget deficit in 2023 will jump to N11.3 trillion of the total spending estimate of N19.76 trillion in the federal government’s fiscal policy for the year, Minister of Finance, Budget and National Planning, Zainab Ahmed has said.
The deficit in the current 2022 budget is N7.35 trillion following the addition of N965 billion of new borrowing to the initial deficit of N6.26 trillion.
Also, the N19.76 trillion 2023 budget estimate is a N2.4 trillion increase over the current 2022 budget of N17.3 trillion.
Ahmed told the House of Representatives Committee on Finance at a meeting where the 2023-2025 Medium Term Expenditure Framework was discussed.
The budget will be benchmarked at $70 while the government is projecting N8.46 trillion in revenue for 2023. N1.9 trillion is expected from oil-related sources while the balance would come from non-oil sources. The budget is anchored on an exchange rate of N435.57 to a dollar while oil production is pegged at 1.69 million barrels per day; with a real GDP growth rate of 3.7 per cent and an inflation rate of 17.16 per cent protection for the year. She hinted that the petrol subsidy would remain up to mid-2023 sequel to the 18-month extension announced early in 2021.
Ahmed added that N3.36 trillion would be provided to pay the subsidy in 2023 while promising tighter enforcement of the performance management framework for Government-owned Enterprises that would significantly increase operating surplus/dividend remittances in 2023.
Ahmed assured that there were no projections that Nigeria would default on her debt services in the nearest future while also assuring that the amount currently used in debt servicing had overshot appropriation in the 2022 budget, and systems had been put in place to manage the situation.
“We planned that 60 per cent of revenue would be spent on debt servicing, but in some months, the ratio went up to 90 per cent. We have been able to, consistently without fail, service our debt and we do not have any projections even in the near future that we will fail.
‘We actually follow the Medium Term Debt Management Strategy very strictly; the debts are not taken haphazardly and they are planned. “They are appropriated and then we borrow against appropriation,’’ she stressed.
The minister acknowledged, however, that the government was under pressure to manage debt servicing following the drop in revenue generation and hence, called on the National Assembly and on other stakeholders to join the government to increase revenue performance.
“We do have pressure in terms of the ratio because when revenue is underperforming, it means we have problems being able to service all of government’s (debts). The liquidity situation is very challenging.
“That is why what we need to do, including the parliament, is to work towards increasing revenue performance.“Yes you have been doing that and we are beginning to see improvement, but we need to keep pushing the bar,’’ she stressed.
Chairman of the Committee, James Faleke (APC-Lagos State) said everyone was aware of Nigeria’s situation in terms of revenue generation, noting that a lot suffered when revenue was short.
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