Key Summary
- President Buhari has signed the 2023 Budget into law
- The N21.8 trillion budget is benchmarked against crude oil production of 1.69mbpd and a crude oil price of $75.
- Budgeted revenues and expenditures are N10.4 trillion and N21.8 trillion respectively
- The total budget deficit is estimated at N11.34 trillion
Nigeria’s President Muhammadu Buhari signed the N21.8 trillion 2023 budget into law on Tuesday morning following last week’s approval by the Senate.
This was disclosed in a statement by the Ministry of Finance, Budget and National Planning, as seen by Nairametrics.
Media aide to the Presidency, Bashir Ahmad, also confirmed the development, saying:
- “President Muhammadu Buhari signed the 2023 Appropriation Bill into law, this morning. This is his last budget signing as the President of the Federal Republic of Nigeria.”
President Muhammadu Buhari signing the 2023 #AppropriationBill into law with Ministers of @FinMinNigeria @PlanningNG, @ZShamsuna & @ClemAgba in attendance at the State House Presidential villa today. This is the last Appropriation Bill under this administration. #FinMinNigeria pic.twitter.com/z1YYpIicNe
— Federal Ministry of Finance (@FinMinNigeria) January 3, 2023
Late Passage of budget: Last week, Senate President Ahmad Lawan explained that the reason the budget was being signed on a later date is due to an “anomalous, very undesirable and unfortunate situation” which caused a delay.
- “We are very pleased that we have been able to, in the last four years, ensure the passage of the appropriation bills in record time before every Christmas, and Mr. President had always signed before the end of the year.
- “This year, particularly, is because of the anomalous, very undesirable, and unfortunate situation that we had to delay a little bit.
- “You will recall that the NASS had to cut down its Christmas recess to come back on Wednesday for the sole purpose of passing the appropriation bill which we could have passed a week before. So all the same, there’s nothing that we missed”.
Benchmarks: Nairametrics also gathered that the country’s crude oil production for 2023 has been pegged at 1.69 million barrels per day.
- The government also increased its crude oil benchmark to $75 per barrel from the previous $70 per barrel.
- The Federal Government believes that with these benchmarks, the country will be able to fund the 2023 budget.
Key highlights of the 2023 Budget
Revenue: Total revenue available to fund the 2023 FGN Budget is estimated at N10.49 trillion. This includes the gross revenues of 63 Government-Owned Enterprises totalling N3.87 trillion.
- FGN Oil revenue share is projected at N2.29 trillion, Non-oil taxes are estimated at N2.43 trillion, and FGN Independent revenues are projected to be N2.62 trillion.
- Other revenues total N762 billion.
- In aggregate, 22% of projected revenues is expected from oil-related sources, while 78% is to be earned from non-oil source
Expenditures: The 2023 Aggregate FGN expenditure (inclusive of GOEs and project-tied Loans) is projected to be N21.83tn, which is 20% higher than the amended 2022 Budget.
- Recurrent (non-debt) spending is estimated to amount to N8.33tn, inclusive of N200 billion in social investment programme.
- Aggregate Capital Expenditure of N6.46tn is 30% of total expenditure; and 3.5% lower than the 2022 Budget (inclusive of the Capital component of Statutory Transfers, GOEs Capital & Project-tied loans expenditures).
- Debt service is budgeted at N6.31 trillion, which is 29% of total expenditure. This is 71% higher than the 2022 estimate as it includes an interest payment of N1.2 trillion for Ways & Means
FIscal Deficits Financing
The overall budget deficit is N11.34 trillion for 2023 representing 5.03% of GDP.
- The budget deficit is to be financed mainly by borrowings made up of domestic sources of N7.04tn, foreign sources of N1.76trillion, Multi-lateral/bi-lateral loan drawdowns of N1.77billion, and Privatisation Proceeds: N206.18 billion
- The gap between the revenue + additional financing and total expenditure, amounting to N553.46 billion is expected to be financed by additional revenue from Spectrum fees and tax on the Maritime sector
