2023 budget: NASS raises deficit to N12.1trn

The Legislators has on Wednesday passed the National Budget of N21.83Tr. after increasing Expenditures by N1.32 Tr.

The decision by the National Assembly to increase the Federal Government’s expenditure from N20.51 trillion to N21.83 proposed in the 2023 Appropriation Bill has raised the projected deficit from N10.78 trillion to N12.1 trillion.

The proposed revenue by the Federal Government remained at N9.73 trillion as presented by President Muhammadu Buhari to the National Assembly.

To finance the deficit, the budget passed by the National Assembly showed that N8.80 trillion would come from debt financing, N206.18 billion from asset sales/privatization, and N1.77 trillion from multi-lateral/bilateral project-tied loans.

The above left an unexplained funding gap of N1.32 trillion.

On the actual revenue side, the Federal Government expects the sum of N4.392 trillion as its share of net federation revenues; N2.217 trillion from Independent revenues; N2. 419 trillion from Government Owned Enterprises; and N300 billion from Special Funds and Accounts Receipts.

In addition, aid/grants are expected to yield N43.028 billion; other dividends to generate N7.226 billion; while the sum of N346.582 billion would come from what was considered as “others.”

Further details of the revenue projections indicated that the sum of N383.1 billion is projected to come from VAT pool; N19.088 billion as share from Electronic Money Transfer Levies, EMTL.

The details captured under “others” as sources of federal government revenue included Education Tax, TETFUND, expected to yield the sum of N248. 268 billion; Signature Bonus/Renewals, N57.048 billion; Domestic Recoveries+ Assets + Fines, N27. 898 billion; and Share of Oil Price Royalty, N13 .366 billion.

Key assets expected to boost federal government revenue in the coming year include the National Integrated Power Plants, NIPPs, which transaction has commenced with the Director-General of the Bureau of Public Enterprises, BPE, Mr Alex Okoh, announcing that the Financial Bid Opening could hold in a matter of weeks.

The D-G told journalists, last week, in Abuja, that he was optimistic that the revenue from the sales would be available to the government in the first quarter of 2023.

The National Assembly in the Bill passed, raised the oil price benchmark to N75 per barrel from N70 per barrel proposed by the Executive.

Crude oil production was retained at 1.69 million barrels per day. So also the Exchange Rate at N435 57/US$; Gross Domestic Production, GDP, Growth Rate at 3.75 per cent and inflation rate at 17.16 per cent.

President Buhari during the budget presentation in October said the Federal Government made a lower projection of the budget deficit by pegging it at N10.78 trillion, against N11.30 trillion proposed in the MTEF/ FSP documents.

He disclosed that the N10.78 trillion would be funded by projected N8.80 trillion new borrowings and proceeds from privatised assets and others.

“We plan to finance the deficit mainly by new borrowings totalling N8.80 trillion Naira, 206.18 billion Naira from Privatization Proceeds and N1.77 trillion Naira drawdowns on bilateral/multilateral loans secured for specific development projects/programmes,” the President added.

Buhari also stated that N3.6 trillion had been earmarked to fund fuel subsidies from January to June of next year, with a warning that the subsidy regime must stop to save the economy from avoidable bleedings.