President Muhammadu Buhari today presented a budget of N20.51 trillion to the National Assembly for the 2023 fiscal year.
The budget is in deficit to the tune of N10.78 trillion, to be financed through borrowing.
The budget is anchored on an oil price benchmark of 70 US Dollars per barrel; a daily oil production estimate of 1.69 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day and an exchange rate of N435.57 per US Dollar.
Gross Domestic Products, GDP is projected to grow at the rate of 3.75 percent and an inflation rate of 17.16 percent .Out of the N20.51 trillion, total federally collectible revenue is estimated at N16.87 trillion in 2023.
The Federal Government hopes to distribute N11.09 trillion in 2023, while total revenue available to fund the 2023 Federal Budget is estimated at N9.73 trillion.
This includes the revenues of 63 Government-Owned Enterprises.
Oil revenue is projected at N1.92 trillion; non-oil taxes are estimated at N2.43 trillion, while Independent revenues are projected to be N2.21 trillion.
Other sources of income will bring in estimated total of N762 billion, while the retained revenues of the GOEs will amount to N2.42 trillion.
Explaining the budget, Buhari said the 2023 Appropriation Bill aims to maintain the focus of MDAs on the revenue side of the budget with greater attention to internal revenue generation.
“Sustenance of revenue diversification strategy would further increase the non-oil revenue share of total revenues”, he said and that the N20.51 trillion total expenditure includes N2.42 trillion spending by Government-Owned Enterprises.
The breakdown is as follows:
Statutory Transfers of N744.11 billion; Non-debt Recurrent Costs of N8.27 trillion; Personnel Costs of N4.99 trillion; Pensions, Gratuities and Retirees’ Benefits of N854.8 billion; Overheads of N1.11 trillion; Capital Expenditure of N5.35 trillion, including the capital component of Statutory Transfers; Debt Service of N6.31 trillion; and Sinking Fund of N247.73 billion to retire certain maturing bonds.
“We expect total fiscal operations of the Federal Government to result in a deficit of 10.78 trillion Naira. This represents 4.78 percent of estimated GDP, above the 3 percent threshold set by the Fiscal Responsibility Act 2007.
“As envisaged by the law, we need to exceed this threshold considering the need to continue to tackle the existential security challenges facing the country”, he said and that his government plans to finance the deficit mainly by new borrowings totalling 8.80 trillion Naira, 206.18 billion Naira from Privatization Proceeds and 1.77 trillion Naira drawdowns on bilateral/multilateral loans secured for specific development projects/programmes.
“Over time, we have resorted to borrowing to finance our fiscal gaps. We have been using loans to finance critical development projects and programmes aimed at further improving our economic environment and enhance the delivery of public services to our people.
“As you are aware, we have witnessed two economic recessions within the period of this Administration. A direct result of this is the significant decline in our revenue generating capacity.
“ In both cases, we had to spend our way out of recession, resulting in higher public debt and debt service. It is unlikely that our recovery from each of the two recessions would have been as fast without the sustained government expenditure funded by debt”, he said.