. Says N11.34trn 2023 budget deficit to be financed by borrowings
The Federal Government yesterday said it spent N12.87 trillion against the N17.126 trillion budgeted for 2022 as at November 30, 2022, which represented a fiscal deficit of N6.37 trillion.
Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said this at the Public Presentation and Breakdown of the Approved Federal Government 2023 Budget in Abuja.
Ahmed said out of the N12.87 trillion, N5.24 trillion was for debt service and N3.94 trillion for personnel costs.
“The actual spending as of November 30 was N12.87 trillion. Of this amount, N5.24 trillion was for debt service; N3.94 trillion for Personnel Costs, including Pensions; Statutory Transfers, Overhead and Service Wide Votes expenditures totalled N1.81 trillion; and N1.88 billion was released for capital expenditure.”
Meanwhile, the minister said the fiscal deficit for 2022 was estimated at N8.17 trillion, inclusive of the supplementary Budget, adding that as at November 30, 2022, the deficit was N6.37 trillion, and was totally financed by borrowings, mostly from domestic sources.
President Muhammadu Buhari signed the 2023 Appropriation Bill of N21.83 trillion into law on Tuesday.
However, the National Assembly (NASS) passed the 2023 Budget on December 28, 2022 after it was laid before a joint session of the NASS on October 7, 2022.
The main aim of the 2023 Appropriation Act was to maintain fiscal viability and ensure smooth transition to an incoming administration.
The Act is also known as “Budget of Fiscal Consolidation and Transition.”
The budget deficit would be financed mainly by borrowings — N7.04 trillion from domestic sources; N1.76 trillion from foreign sources; N1.77 billion from multilateral and bilateral loan drawdowns, while privatisation proceeds would provide N206.18 billion.
Debt servicing
Ahmed also said the Federal Government spent about N5.24 trillion on debt servicing between January and November 2022, out of its N6.5 trillion retained revenue for the same period.
The spend puts the country’s debt service-to-revenue ratio at 80.6% for the period under review — a figure far above World Bank’s suggested 22.5% for low-income countries like Nigeria.
The Minister said the federal government’s share of oil revenues generated within the period was N586.71 billion, a 35.7% performance, and non-oil tax revenues of N2.09 trillion or 123.3% performance.
She said companies’ income tax (CIT), and value added tax (VAT) collections were N1.08 trillion and N295.2 billion, representing 158.6% and 124.3% of their respective targets.
She however announced the withdrawal of the pioneer status tax waiver for companies going forward; adding that about N6 trillion was forgiven from 2021 to date under the scheme.
Ahmed also informed that Customs collections (comprising import duties, excise, fees, and special levies) exceeded the target by N15.42 billion (102% performance).
She added that other revenues amounted to N3.72 trillion, of which independent revenue was N1.32 trillion.
Regarding the expenditure, she said the government spent about N12.87 trillion, out of which N1.88 trillion was released for capital expenditure as at the end of November 2022.
2023 Budget
Ahmed said 22% of projected revenues will come from oil-related sources and 78% from non-oil sources.
This is even as she said the government plans to spend N3.36 trillion on fuel subsidy, which will end in June this year.
“Petrol subsidy will remain up to mid-2023 based on the 18-month extension announced early 2022,” she added.
She said the overall budget deficit for the 2023 budget is N11.34 trillion or 5.03% Nigeria’s gross domestic product (GDP).
She explained that the budget deficit would be financed mainly by borrowings, adding that N7.04 trillion would be borrowed from domestic sources; N1.76 trillion from foreign sources; N1.77 billion from multilateral and bilateral loan drawdowns, while privatisation proceeds would provide N206.18 billion.
She added that the gap between the revenue plus additional financing, and total expenditure, amounting to N553.46 billion is expected to be financed by additional revenue from spectrum fees and tax on the maritime sector. (NAN and other reports)
