Senate approves MTEF/FSP for 2023 budget, retains most proposals

The Senate, yesterday, approved the Federal Government’s Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), which contains the parameters upon which the annual budget is prepared.

This comes ahead of the proposed N19.76 trillion 2023 budget, expected to be presented by President Muhammadu Buhari tomorrow.

The approval followed the presentation of a report on the MTEF/FSP by the Chairman, Finance Committee, Solomon Olamilekan.

The Committee however increased oil benchmark price at $73 per barrel against $70/barrel initially proposed “as a result of continuous increase in the oil price in the global oil market and other peculiar situations such as continuous invasion of Ukraine by Russia, as this will result in saving of N155 billion.”

Other approvals include:

  • Petroleum subsidy capped at N3.6 trillion;
  • Retained revenue of N9.352 trillion as result of increase in the benchmark as the ceiling oil subsidy to the year in review;
  • Fiscal deficit of N11.3 trillion (including Government Owned Entreprises, FOEs);
  • Statutory transfers, totalling N722.11 billion;
  • Debt Service estimate of N6.31 trillion;
  • Sinking Fund of N247.7 billion;
  • Pension, gratuities & retirees benefits of N827.8 billion; and,
  • Aggregate expenditure of N19.76 trillion – comprising: Total Recurrent (Non-debt) of N8.53 trillion; Personnel Costs (MDAs) of N827.8 billion; of Capital expenditure (exclusive of Transfers) N3.96 trillion; Special Intervention (Recurrent) amounting to N350 billion; and Special intervention (Capital) of N7 billion.

The Committee recommends significant reduction in both waivers and tax exemptions of corporate organisations to cushion the effect of budget deficit.

The Senate also retained the projected 1.69 million barrels per day (bpd) as the production of crude for the 2023 budget, and exchange rate of N437.57/$ as proposed by the executive.

Similarly, gross domestic product (GDP) growth rate was retained at 3.75% and inflation rate of 17.16%.

Olamilekan also informed that “The Committee recommends significant reduction in both waivers and tax exemptions of corporate organisations to cushion the effect of budget deficit.

“And that all revenue generating agencies should reconcile their accounts with the Fiscal Responsibility Commission and the Office of the Accountant-General of the Federation (OAGF), the report of which should be submitted to the Committee of Finance for consideration and approval.”

He added that “There should be strict compliance with the Constitution, Fiscal Responsibility Act and other extant laws by all agencies of the Government with regards to revenue remittances.

“And relevant oversight committees of the National Assembly are at liberty to remove recycled projects in their budget proposal during the Committees’ budget defence.”

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