…Tagged ‘Budget of Fiscal Sustainability and Transition’
BENJAMIN OMOIKE
The Federal Government has proposed
a total expenditure of N20.51 trillion for the 2023 financial year which include N2.42 trillion spending by Government-Owned Enterprises.
This is above the earlier proposal of N19.76 trillion approved in 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, (MTEF/FSP) submitted to the National Assembly.
President Muhamadu Buhari announced this at the presentation of the 2023 Appropriation Bill, christened: ‘Budget of Fiscal Sustainability and Transition’ presented to join session of National Assembly on Friday.
The expenditure comprises: 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.
The budget tags, ‘Budget of Fiscal Consolidation and Transition’ is hinged on parameters or fiscal assumptions of Oil price benchmark of 70 US Dollars per barrel; daily oil production estimate of 1.69 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day); exchange rate of 435.57 Naira per US Dollar; and projected GDP growth rate of 3.75 percent and 17.16 percent inflation rate.
“Based on the fiscal assumptions and parameters, total federally-collectible revenue is estimated at N16.87 trillion in 2023.
“Total Federally distributable revenue is estimated at 11.09 trillion Naira in 2023, while total revenue available to fund the 2023 Federal Budget is estimated at 9.73 trillion Naira. This includes the revenue of 63 Government-Owned Enterprises.
“Oil revenue is projected at 1.92 trillion Naira, Non-oil taxes are estimated at 2.43 trillion Naira, FGN Independent revenue are projected to be 2.21 trillion Naira. Other revenues total 762 billion Naira, while the retained revenues of the GOEs amount to N2.42 trillion Naira.
“The 2023 Appropriation Bill aims to maintain the focus of MDAs on the revenue side of the budget and greater attention to internal revenue generation. Sustenance of revenue diversification strategy would further increase the non-oil revenue share of total revenues,” Buhari said.
President Buhari who noted that the 2023 4th budget presentation, is the last of the administration also, highlighted progress of his stewardship in the last seven and half years in what he described as, “just two important areas of Critical Infrastructure and Good Governance.”
He said: “We have made transformational investments in Infrastructure, notably: Establishing the Infrastructure Corporation of Nigeria, (‘InfraCorp’), in 2021, seed capital of N1 trillion from the Central Bank of Nigeria (‘CBN’), the Nigeria Sovereign Investment Authority (‘NSIA’) and the Africa Finance Corporation (‘AFC’).
“Leveraging finance through the NSIA into the Presidential Infrastructure Development Fund, (‘PIDF’) to facilitate accelerated completion of the Second Niger Bridge, Lagos-Ibadan Expressway and Abuja-Kano Road; through the Road Infrastructure Tax Credit Scheme pursuant to Executive Order 7 of 2019, incentivised responsible companies to invest billions of Naira in constructing over 1,500km critical roads in key economic corridors and many others.”
He noted that in terms of Good Governance, “one significant challenge this administration met at our inception was the inability of successive governments to institutionalise reforms to ensure their sustainability.
“We inherited an archaic set of corporate, banking and capital market laws; petroleum sector; an unimplemented Oronsaye White Paper to reform our civil service, amongst others.
“I was therefore committed, at the onset of this Administration’s Good Governance and Fighting Corruption Reforms, to focus on the much-neglected area of law reform, to bequeath a better legacy to the succeeding Administration, than the one we met.
“Our innovative, encompassing and historically significant legislative interventions include:
Critical corporate and financial laws to enhance our countries’ global competitiveness, including the repeal and re-enactment of Companies and Allied Matters Act (‘CAMA’) 2020, the first comprehensive reform since 1990; enacting the Federal Competition and Consumer Protection Commission, (FCCPC) Bill, the first legislation in Nigeria’s history focused on curbing anti-competition practices; establishing the Federal Competition and Consumer Protection Commission; repealing and reenacting Banks and Other Financial Institutions Act, (BOFIA) 2020; enacting the Asset Management Corporation of Nigeria, AMCON (Amendment) Acts of 2019 and 2021; enacting the Credit Reporting Act (CRA) 2017 and Secured Transactions in Movable Assets Act (STMAA) 2017, to mention our major legislative interventions and others.”
President Buhari further stressed that recent achievements of his administration over the last year has been on the completion of key road and rail projects saying; “the effective implementation of power sector projects; the provision of clean water; construction of irrigation infrastructure and dams across the country; and critical health projects such as upgrading Primary Health Care Centres across the six geopolitical zones.
“We have also gone further on the implementation of several power generation, transmission, and distribution projects, as well as off-grid solutions, all aimed towards achieving the national goal of optimising power supply by 2025.
“Under the Road Infrastructure Tax Credit Scheme, we are undertaking the construction and rehabilitation of about two thousand kilometres of roads and bridges, nationwide, to be financed by the grant of tax credits to investing private companies.
“We have made appreciable progress in the rehabilitation and reconstruction of key road networks like the Lagos – Ibadan expressway, Abuja-Kaduna-Kano expressway and East-West Road in Niger Delta.
“Work has also reached completion stage on the Apapa – Oworonsoki expressway, Loko-Oweto Bridge and the Second Niger Bridge. We hope to commission these projects before the end of our tenure in 2023.”
He reiterated Government’ concern about high cost of food prices in the country stating that various measures are being implemented to address structural factors underlying the issue.
“We will step-up current efforts aimed at boosting food production and distribution in the country. You will recall our efforts in improving production of fertiliser, rice, maize cassava among other earlier initiatives,” he noted.
In his earlier address, President of the Senate and Chairman, National Assembly, Ahmad Ibrahim Lawal commended the Ninth National Assembly and the Executive Arm of Government for a productive partnership and collaboration that has helped to ensure return of the Budget cycle from January to December.
“Mr. President, our economy is still challenged by dearth of revenues. The main source of revenue to the Nigerian Government is Oil and Gas.
“We always consider the diversification of the economy as crucial and its indeed crucial. The idea of deploying our revenues from the Oil and Gas to support the diversification into real sectors like Agriculture, Manufacturing, Mining is now under serious threat.
“The large scale and massive stealing of our Oil, is concerning, as this reduces drastically revenues available to the Government.
“With conflicting figures, projections have put our losses from this malaise at between 700,000 to 900,000 barrels of crude Oil per day, leading to about 29 to 35 per cent loss in Oil revenue in the first quarter of 2022.
“This represents an estimated total fall from N1.1 trillion recorded in the last quarter of 2021 to N790 billion in the first quarter of this year.
“The situation has worsened. Recently, the loss of our Oil has reached 1 million barrels per day. Translated into monetary terms, our loss is monumental. The figures show we are not able to meet the OPEC daily quota of 1.8million barrels per day.
“I consider Oil thieves, the worst enemies of our country. The thieves have declared war on our Country and our people. I strongly feel that if we do not take necessary measures to stop the thieves immediately, our economy will be devastated, as efforts to provide infrastructure and diversification of the economy would both be thwarted. It is time to take drastic and desperate measures against the thieves.
“The situation becomes more unfortunate if we factor in the Budget deficit estimated at N7 trillion and the grim prospect of its increase to about N11.30 trillion as presented in the 2023 – 2025 Medium Term Expenditure Framework/Fiscal Strategy Paper (MTEF/FSP),” he said.
Speaker, House of Representatives, Rep Femi Gbajabiamila in his vote of thanks assured President Buhari of the national assembly commitment to prioritise this bill and ensure it is passed before the end of the year.
“However, we will not, in the quest for timely passage, fail to do the due diligence expected of us by the Nigerian people. The reforms to the budget process initiated in the 9th Assembly have helped streamline the appropriations process and the oversight system.
“We have set a standard for others to match or answer for. This is to the credit of all those who worked to achieve these outcomes, particularly the senators and honourable members.
“I have often said that a budget reflects priorities. National security, healthcare, education, public infrastructure and human capital development are the priorities we have pursued in the 9th Assembly.
“Every Appropriation Act we have considered and passed has reflected these priorities to different degrees. The 2023 Appropriation Act will be a budget of consolidation; our last, best opportunity to ensure that ongoing projects across the country are completed before the end of the administration.
“As we consider this 2023 Appropriation Bill, I wish to remind Heads of Ministries, Departments and Executive Agencies that the National Assembly expects thorough accounting for previous appropriations, disbursements and expenditures.
“Where such accounts are not forthcoming, we will demand them. And we will exercise full authority of parliament to hold to account those who fail to provide the records we need to make informed decisions on the Appropriation Bill.
“This is a priority for us as we wind down and begin compiling our service records for history and as a guide to those who will continue from where we stop.
“Just as the 9th Assembly has reformed the appropriations process to ensure timely budget passage, we also intend to leave a legacy of transparency and accountability as a standard for the future.”
Mixed reactions have trailed N20.51 trillion 2023 budget presentation by President Buhari to the joint session of the National Assembly.
Senator Betty Apiafi (Rivers West) said the budget does not have anything for capital component.
“Remember the N6.72 trillion for subsidy is excluding the salaries or the losses from the three refineries that we have borrowed money to repair that is still hanging; they were giving us December 2023 to get the refineries working. Now they are moving it to 2024; I mean there is no budget.
“The government should go and stop oil theft. They owe it to Nigerians to stop oil theft. You can’t be sitting down and say we are running government and people are stealing 80% of your revenue. What is that? We have insecurity and oil theft. So, we have no security, we have no economy.”
According to her, oil theft was about 200 barrels per day (bpd) and oil subsidy was about N400 billion. Somewhere along the line there was an amendment of the Medium Term Expenditure Framework (MTEF) and fuel subsidy moved to N4 trillion. Today we are talking of N6.72 trillion. Revenue is dropping because about 80 per cent of our revenue is stolen.
“From the records I saw in the MTEF presented to us, we are missing 1 million bpd. So, there is no budget.
“They gave us two scenarios when they gave us MTEF presented to us in the Senate yesterday. The two scenarios are if we provide 100 per cent for subsidy, which is N6.72 trillion; there won’t be capital projects. If we do subsidy for 6 months, which is N3.36 trillion. Then we will have money for capital projects.
“Nobody does budgeting like that. Nigerians voted us to represent them, to protect the nation and make it prosper. So, what are we doing allowing our revenue to be stolen? We don’t have security, we don’t have economy and we don’t have a budget,” she said.
However, Senator Barau Jibrin (Kano North) said the president has just presented the budget to them and they have to go through it before he can make comments on it.
But he was quick to say that he has never seen a government that has made huge investment infrastructure development like the Buhari administration.
“Let me tell you one fact, I have never seen any government …, I have been a participant in the budgetary process since 1999 when we started our new journey in terms of democracy we’re enjoying as a nation. I was once Chairman House Committee on Appropriation and even when I left office I was following what was happening. There is no government in the history of this country that has invested so much in infrastructure. The government has done very well. It has performed Ina way we should commend it,” Barau concluded.
