The President, Major General Muhammadu Buhari (retd. ), will lay the 2023 Appropriation Bill before a joint session of the National Assembly in Abuja on Friday (today).
The House of Representatives passed the 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, which the President previously submitted to the National Assembly, on Thursday, ahead of the Federal Government budget presentation.
The approval came after the Committee of Supply considered the Committee of Finance’s report on the MTEF/FSP.
The House approved a total FGN expenditure of N19.76 trillion, which included total recurrent (non-debt) expenditure of N8.53 trillion, personnel costs (MDAs) of N827.8 trillion, capital expenditure (exclusive of transfers) of N3.96 trillion, special intervention (recurrent) of N350 trillion, and special intervention (capital) of N7 trillion.
The Federal Government submitted a budget with projections of N19.76 trillion, with the deficit expected to range between N11.30 trillion and N12.41 trillion in the fiscal year 2023.
At a public hearing on the MTEF/FSP organized by the House, the Minister of Finance, Budget, and National Planning, Zainab Ahmed, expressed concern that the government might be unable to fund treasury-funded capital projects next year, owing to dwindling revenue and the payment of subsidies on Premium Motor Spirit, also known as petrol.
While adding that the government had two alternatives, Ahmed stated that the first scenario assumed that the PMS subsidy, which was anticipated to be N6.7tn for a full year, would continue in 2023 and be fully funded.
It also authorized N8.4 trillion in borrowing and N6.3 trillion in debt service. The committee proposed crude oil daily output of 1.69 million barrels, 1.83 million barrels per day, and 1.83 million barrels per day for 2023, 2024, and 2025, respectively.
The committee also proposed a crude oil benchmark price of $73 per barrel “as a result of the continuing increase in the oil price in the global oil market and other unusual events such as Russia’s continuous invasion of Ukraine, as this will result in N155 billion saved.”
While the House maintained the recommended exchange rate of N437.57 to the US dollar in the MTEF/FSP, the committee asked for continued collaboration between the Central Bank of Nigeria and the Federal Ministry of Finance, Budget, and National Planning “with a view to bridging the gap between the official market and parallel market.”
The lawmakers also approved a projected Gross Domestic Products growth rate of 3.75 per cent and an inflation rate of 17.16 per cent.
The committee also suggested that “the expected additional borrowings of N8.437 trillion, comprising international and domestic borrowing, be allowed, subject to the National Assembly’s acceptance of the submission of specifics of the borrowing plan.”
Musa Abdullahi, Deputy Chairman of the House Committee on Finance, told media following the plenary that borrowing was not harmful for the economy, but that attention should be made to income creation to pay the loans. He also explained why lawmakers reduced funding for gasoline subsidies.
“There are so many uncertainty about subsidy payment,” Abdullahi remarked in part. So we decided to level it out by setting a N1.7tn contingency for subsidy payment. We are looking by early next year. Port Harcourt (refinery), for instance, is expected very soon.” Meanwhile, the House, on Thursday, received the report of its Committee on Police Affairs on the proposed N65.9bn budget of the Nigeria Police Trust Fund.