President Muhammadu Buhari, yesterday, said his government is going to finance the N10.78 trillion deficit in the 2023 Budget by borrowing N8.80 trillion and N206.18 billion from privatisation proceeds and project-specific loans.
The President, while presenting the 2023 budget of N20.51 trillion to the Senate and the House of Representatives at a joint session of the National Assembly, said his administration expected the total fiscal operations of the Federal Government to result in a deficit of N10.78 trillion. The Budget includes N2.42 trillion spending by government-owned enterprises. It is also about N3 trillion higher than the 2022 Budget.
Meanwhile, if the Government will spend N6.31 trillion from the about N9 trillion left to service outstanding debts, it will leave N3 trillion, which will be easily gulped by fuel subsidy.
However, President Buhari described the 2023 appropriation as a budget of “fiscal sustainability and transition”. He told the joint Assembly that the budget “reflects the serious challenges currently facing our country, key reforms necessary to address them, and imperatives to achieve higher, more inclusive, diversified and sustainable growth”.
The President explained that the principal objective in 2023 was to maintain fiscal stability and ensure a smooth transition to the incoming administration. He made a lower projection of budget deficit, by pegging it at N10.78 trillion, against N11.30 trillion proposed in the Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/ FSP) documents.
He listed the assumptions and parameters upon which the projected N20.51 trillion 2023 budget was based. There is an oil price benchmark of $70 per barrel; daily oil production estimate of 1.69 million barrels; exchange rate of N435.57 per US Dollar; projected GDP growth rate of 3.75% and 17.16% inflation rate.
Other critical components of the budget are N744.11 billion for Statutory Transfers; N8.27trillion for non-debt recurrent costs; N4.99 trillion for personnel costs; N854.8 billion for pensions and gratuities of retirees. Others are N1.11 trillion for overheads cost; N5.35 trillion for Capital Expenditure, including the capital component of Statutory Transfers, N6.31 trillion for debt service, and N247.73 billion as Sinking Fund to retire certain maturing bonds.