In the next couple of days, the President is expected to communicate to the National Assembly, the day for presentation of the 2023 budget projections. There are indications that the President will present the budget in the first week of October 2022. Under established budget practice, the national budget anticipates presentation to the National Assembly three months before the commencement of the next fiscal year. It would appear that budget presentation and projections in Nigeria especially in recent years have become merely a ritual, as ministries, departments, and agencies (MDAs) of government complain that sums budgeted for them, particularly for capital projects are hardly released. As Nigeria awaits the full details of the budget to be presented to the National Assembly, projections emerging indicate serious economic challenges ahead.
Presentations made to the relevant Committees of the National Assembly on the 2023-2025 Medium Term Expenditure Framework/Fiscal Strategy Paper (MTEF/FSP) show that the country would be running a deficit budget of N11.03trillion or N12.41trillion in the two budget scenarios presented by the Minister of Finance. Expected revenue for the year 2023 is put at N8.46 trillion while petrol subsidy is put between N3.36 trillion and N6.72 trillion.
The Committees rejected the projected deficit figures, the projected N6 trillion tax and import duties waivers, as well as the projection that there may be no provision for treasury-funded capital projects in 2023. They called for a critical downward review of these figures, in order to reduce the budget deficit. A major concern was the need to explore all possible revenue sources to finance the 2023 budget. The Senate Finance Committee disclosed that there may be a need to amend the Finance Act to increase the targets and capacities of revenue generating government agencies (especially from non-oil sources) with a view to reducing the budget deficit and borrowings. The Committee also stated the need to plug revenue leakages within government ministries, departments and agencies (MDAs). In relation to plugging government revenue leakages in the oil sector, the leadership of the Senate met with heads of security agencies in an interactive session on 12th September 2022 and enjoined them and the judiciary to ensure expeditious prosecution of apprehended oil thieves.
Speaking on driving revenue mobilisation, the International Monetary Fund (IMF) Resident Representative for Nigeria, Ari Aisen has noted once again, the need for Nigeria to take away petrol subsidy permanently in order to boost revenue. Aisen also reiterated the need for the Nigerian government to ensure private sector recovery.
Nigerians will be watching to see how the Federal Government and the National Assembly will proceed to deal with rising debt and diminishing revenue in drafting and passing a budget for the 2023 fiscal year.