Abuja — PRESIDENT Muhammadu Buhari yesterday commenced the rounding up of his eight-year tenure as President and Commander-in-Chief of the Armed Forces of the Federal Republic of Nigeria by presenting the 2023 Budget to the nation which is the last in the life of his administration.
The Appropriation Bill of N20.51 trillion which he christened the budget of "fiscal sustainability and transition", was presented to the joint session of the National Assembly.
The budget, which includes N2.42 trillion spending by Government-Owned Enterprises, is about N750 billion higher than N19.76trillion earlier proposed in the 2023 - 2025 Medium Term Expenditure Framework and Fiscal Strategy Paper. The 2023 budget proposal is also higher than N17.23 trillion aggregate expenditure for 2022 by N3.28trillion.
Addressing the Senators and members of the House of Representatives yesterday, President Buhari explained that the principal objective of the 2023 budget was to maintain fiscal stability and ensure a smooth transition to the incoming administration. He said 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."
With the budget, Nigeria will have to borrow N8.80 trillion, almost half of the entire budget size to finance the deficit of N10.78 trillion. The rest monies needed to finance the budget will come from proceeds from the sales of national assets.
Yet, Nigeria will spend another N6.31 trillion from the roughly N9 trillion that will be left to service outstanding debts, thereby leaving the government with a meagre sum of N3 trillion that will be easily gulped by the fuel subsidy regime.
President Buhari who made a lower projection of budget deficit by pegging it at N10.78 trillion against N11.30 trillion proposed in the MTEF/ FSP documents said that the N10.78trillion would be funded by projected N8.80 trillion new borrowings and proceeds from privatised assets and others.
He said, "we plan to finance the deficit mainly by new borrowings totalling N8.80 trillion Naira, 206.18 billion Naira from Privatization Proceeds and N1.77 trillion Naira drawdowns on bilateral/multilateral loans secured for specific development projects/programmes."
Buhari earmarked N3.6 trillion to fund fuel subsidies from January to June next year with a warning that the subsidy regime must be stopped to save the nation's economy from avoidable bleeding on yearly basis.
According to the President, critical assumptions and parameters upon which the projected N20.51trillion 2023 budget is based are: 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 per cent inflation rate.
Other critical components of the budget are: an N744.11billion for Statutory Transfers; N8.27trillion for Non-debt Recurrent Costs; N4.99 trillion for Personnel Costs and N854.8 billion for Pensions and Gratuities of Retirees.
Others are N1.11 trillion for Overheads cost; N5.35trillion 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.
He said that based on the parameters, total federally-collectable revenue is estimated at 16.87 trillion Naira in the 2023 fiscal year. "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 revenues 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 revenues 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."
As a way of ending the lingering strike by the Academic Staff Union of Universities ( ASUU) and revitalizing Tertiary Institutions in the country, President Buhari disclosed that the government has earmarked a total of N470 billion for that purpose, adding that the allocation, though drawn from the government's constrained resources, was part of its effort to resolve the issue of paralysed activities in public universities.
The allocation comes amid the lingering strike in public universities which has left schools closed for over seven months. The striking lecturers have resolved to stay off work until their demands are met. Part of their demands are rehabilitation and revitalisation of universities as well as better welfare for lecturers.
According to Buhari, he expects the staff of these institutions to show a better appreciation of the current state of affairs in the country as the federal government is appalled by the crisis that has paralysed activities in the public universities in the country.
He said, "The Government notes with dismay the crisis that has paralysed activities in the public universities in the country. We expect the staff of these institutions to show a better appreciation of the current state of affairs in the country.
"In the determined effort to resolve the issue, we have provided a total of N470.0 billion in the 2023 budget from our constrained resources, for revitalization and salary enhancements in the tertiary institutions.
"Distinguished Senators and Honourable members, it is instructive to note that today Government alone cannot provide the resources required for funding tertiary education. In most countries, the cost of education is jointly shared between the government and the people, especially at the tertiary level. It is imperative therefore that we introduce a more sustainable model of funding tertiary education.
"The Government remains committed to the implementation of agreements reached with staff unions within available resources. This is why we have remained resolute that we will not sign any agreement that we would be unable to implement. Individual institutions would be encouraged to keep faith with any agreement reached in due course to ensure stability in the educational sector", he said.
Buhari added that the government is committed to improving the quality of education at other levels and pledged to remain committed to the effective implementation of the Safe Schools Policy.
He said that for that reason, a total of 15.2 billion has been specifically provided in the 2023 budget to scale up current measures to provide a safer and more conducive learning environment in our schools.
Buhari who declared that a constant electricity supply will come to reality in 2025 based on fast improvements being made in that direction particularly with projected additional 7,000 megawatts by 2024, said: "We have transformed Nigeria's challenging power sector, through bespoke interventions such as the Siemens Power Program, with the German government under which over 2 billion US Dollars will be invested in the Transmission Grid.
"We have leveraged billions of US dollars in concessional and other funds from our partners at the World Bank, International Finance Corporation, African Development Bank, JICA as well as through the Central Bank of Nigeria, working with the Finance Ministry, to support the power sector reforms.
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"The Central Bank has also been impactful in its interventions to roll out over a million meters to on-grid consumers, creating much-needed jobs in assembly and installation.
"Our financing interventions have recently been complemented with the takeover of four electricity distribution companies and the constitution of the Board of the Nigeria Electricity Liability Management Company.
"On the generation side, we have made significant investments in an incremental 4,000MW of power generating assets, including Zungeru Hydro, Kashimbila Hydro, Afam III Fast Power, Kudenda Kaduna Power Plant, the Okpai Phase 2 Plant, the Dangote Refinery Power Plant, and others.
"Our generation efforts are making the transition from a reliance on oil and diesel to gas as a transitional fuel, as well as environmentally friendly solar and hydro sources.
"Under the Energising Education Programme, we have commissioned solar and gas power solutions at Federal Universities and Teaching Hospitals in Kano, Ebonyi, Bauchi and Delta States. Similarly, our Energising Economies Programme has taken clean, sustainable power solutions to the Sabon-Gari Market in Kano, Ariaria Market in Aba, and Sura Shopping Complex in Lagos".
Breakdown of President Buhari's budget presentation since he came to power in 2015:
In 2015, the budget sum was N4.5 trillion; in 2016, it rose to N 6.06 trillion; in 2017, it was N7.44 trillion; in 2018, the budget was jerked to N 9.12 trillion; in 2019, it was N8.9 trillion; in 2020, it rose to N10.33 trillion; in 2021, it was N13.6 trillion and in 2022, it was N17.126 trillion. Buhari inherited a budget size of N4. 5 trillion from former President Goodluck Jonathan in 2015.
