Ahea of today’s presentation of the N29.76 trillion 2023 budget by President Muhammadu Buhari, BudgIT’s review of the previous year’s budget shows that the country actualised only 71 percent of year 2021 revenue.
The country also spent 91 per cent of her earnings to service huge growing debt burden.
According to BudgiT, debt service to revenue ratio stood at 91 percent, implying that about 91 percent of government’s revenue was spent on debt servicing.
On practical terms, the APC led government earned only N4.64trillion in the year under review, out of the budgeted N13.6 trillion, and had to borrow N6.4trillion to meet its spending obligations.
The N13.6 trillion ($35.66 billion) budget for last year was based on assumptions of $40 per barrel crude price and 1.86 million barrels per day crude production, assuming 3 percent annual economic growth rate.
Analysis of the revenue components shows that despite improvement in oil prices over the period, the country earned only N990billion revenue from oil, behind N1.25trillion Independent Revenue category shows N787billion earnings from Company Income Tax ranked third highest.
Other revenue sources were Customs (N559billion), Signature Bonus (N381billion), VAT (N265billion) NLNG Dividends (N208billion) Special Levies (N138billion) and others (N62.4billion).
Of the total N13.6trillion budgeted in 2021, Nigeria spent N11trillion. While the sum of N3.05trillion was spent on Personnel Costs, a whopping N1.22trillion was spent on Central Bank of Nigeria (CBN) borrowing.
On capital expenditure, the government spent N1.9trillion, while Domestic Debt Service and Foreign Debt Service gulped N2.05trillion and N946billion, respectively.
To meet funding obligations, the government borrowed N2.89trillion from domestic lenders, N1.62trillion from foreign lenders and N1.92trillion from unexplained sources.
The key assumptions in the Medium Term Expenditures Framework (MTEF) for 2023 presented to the House of Representatives indicate that oil benchmark is estimated at $70, crude oil production is estimated at 1.69million barrel per day and exchange rate of about N435.57 per dollar.
The MTEF document further indicate a revised projection in inflation rate at 17.16 per cent for 2023, from current 20.52 per cent, while the growth rate was pegged at 3.75 per cent from a revised projection of 3.55 per cent for the year 2022.