On Friday, President Muhammadu Buhari gave the joint session of the National Assembly an estimate of total expenditures of N20.51 trillion, which included a budget deficit of N10.78 trillion, or 4.78 percent of projected GDP, beyond the 3 percent threshold.
The proposed budget is N75 billion more than the N19.76 trillion that was approved by the Senate and House of Representatives in the Fiscal Strategy Paper (FSP) and Medium Term Expenditure Framework (MTEF) enacted on Wednesday and Thursday by both chambers.
A breakdown of the 2023 budget parameters and fiscal assumptions revealed that the benchmark oil price of $70; daily oil production of 1.69 million barrels (including condensates of 300,000 to 400,000 barrels per day); exchange rate of N435.57/$; projected GDP growth rate of 3.75 percent; and inflation rate of 17.16 percent.
The proposed N20.51 trillion 2023 expenditure is broken down into the following categories: Statutory Transfers (N744.11 billion), Non-debt Recurrent Costs (N8.27 trillion), Personnel Costs (N4.99 trillion), Pensions, Gratuities and Retirees’ Benefits (N854.8 billion), Overheads (N1.11 trillion), Capital Expenditure (N5.35 trillion), which includes the capital component of Statutory Transfers (N6.31 trillion).
In accordance with him, based on these fiscal hypotheses and parameters, total federally-collectable revenue is estimated to be N16.87 trillion; total federally distributable revenue is estimated to be N11.09 trillion in 2023; and total revenue available to fund the federal budget for 2023 is estimated to be N9.73 trillion, taking into account the revenues of 63 government-owned enterprises.
“Oil revenue is forecast at N1.92 trillion, non-oil taxes at N2.43 trillion, and FGN The estimated sum of independent revenues is N2.21 trillion, other revenues are N762 billion, and the retained income of the GOEs are N2.42 trillion.
The 2023 Appropriations Bill aims to keep MDAs’ emphasis on the budget’s revenue side and give internal revenue production more priority. The non-oil revenue percentage of overall revenues would rise further if a revenue diversification plan was maintained.
A breakdown of the anticipated spending revealed that the Federal Government will receive N20.51 trillion in 2023. Included in this is the N2.42 trillion in spending by government-owned businesses.
A deficit of N10.78 trillion, or 4.78 percent of projected GDP, will be generated by all federal government fiscal activities, exceeding the Fiscal Responsibility Act of 2007’s 3 percent cap.
We must go above and beyond what is required by law in order to continue addressing the existential security concerns that we face in the country.
The majority of the N8.80 trillion in new borrowings, N206.18 billion in proceeds from privatization, and N1.77 trillion in drawdowns on bilateral and multilateral loans acquired for particular development projects and programs are how we intend to pay for the deficit.
Details to come…
