Budget: Reps approve N8.4tn borrowing, N6.3tn debt service

President Major General Muhammadu Buhari (retired) will present the 2023 Appropriation Bill before a joint session of the National Assembly in Abuja on Friday (today).Infomation Guide Nigeria

The 2023–2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, which the President had earlier delivered to the National Assembly, was approved by the House of Representatives on Thursday, ahead of the Federal Government budget presentation.

The passage follows the Committee of Supply’s examination of the report of the Finance Committee on the MTEF/FSP.

The House approved an aggregate FGN expenditure of N19.76tn, comprised of total recurrent (non-debt) expenditure of N8.53tn, personnel costs (MDAs) of N827.8bn, capital expenditure (exclusive of transfers) of N3.96tn, special intervention (recurrent) of N350bn, and special intervention (capital) of N7bn.

The Federal Government submitted a budget with total estimates of N19.76tn, while the deficit was projected to range between N11.30tn and N12.41tn for the fiscal year of 2023.

During a public hearing organised by the House on the MTEF/FSP, the Minister of Finance, Budget, and National Planning, Zainab Ahmed, expressed concern that the government may be unable to fund treasury-funded capital projects in the coming year, primarily due to declining revenue and the payment of subsidy on Premium Motor Spirit, also known as gasoline.

Ahmed, adding that the government had two options, stated that the first scenario assumed that the subsidy on PMS, expected to be N6.7tn for the entire year, would stay in 2023 and be fully funded.

The second option, the reform scenario, anticipates that petrol subsidies will continue until mid-2023, based on the 18-month extension promised in early 2021; in this case, only N3.6tn would be provided for.

However, the committee’s study suggested N1.7tn for gasoline subsidies.

In 2023, 2024, and 2025, the committee suggested daily crude oil output of 1.69 million barrels, 1.83 million barrels, and 1.83 million barrels, respectively.

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The committee also recommended a crude oil benchmark price of $73 per barrel “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.”

The committee further recommended “that the projected new borrowings of N8.437 trillion, including foreign and domestic borrowing, be approved, subject to the approval of the provision of details of the borrowing plan by the National Assembly.”

Musa Abdullahi, deputy chairman of the House Committee on Finance, told reporters after the plenary that borrowing was not bad for the economy, but that attention should be paid to revenue generation to service the loans. In addition, he highlighted why legislators reduced funding for gasoline subsidies.Jamb Result 

Abdullahi partly said, “There are so many uncertainties around the payment of subsidy. So, what we decided to do was to flatten it out by making a provision of N1.7tn for subsidy payment. We are looking at some of our refineries coming up by early next year. Port Harcourt (refinery), for instance, is expected very soon.”

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