Nigeria’s 2023 budget will have a deficit of N12.43 trillion – Finance Minister

Nigeria’s 2023 budget is expected to show a deficit of N12.43 trillion due to import duty waivers and fuel subsidy payments, according to Minister of Finance, Budget and National Planning, Zainab Ahmed. .

The Finance Minister had informed the Senate Finance Committee in an interactive session on Tuesday that the proposed budget of N19.76 trillion for 2023 would be highly compromised by the above-mentioned factors, particularly if the fuel subsidy is maintained throughout. of 2023.

The concern, which was also expressed by revenue-generating agencies, prompted the committee’s chairman, Olamilekan Adeola, to ask the minister to critically review both the projected budget deficit of N12.43 trillion and N6tn’s tax and import duty exemptions before sending the proposals to the National Assembly for consideration and approval.

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Adeola demanded that the minister review the list of beneficiaries of the 6 trillion naira waivers for possible revision down to N3tn, which will minimize the size of the entire budget deficit.

“The proposed deficit of 12.43 trillion naira for the 2023 budget and the waivers of 6 trillion naira are very worrying and must be critically examined. Many beneficiaries of the exemptions do not invest the accumulated gains in the projects expected with regard to the development of the infrastructures.

“The same goes for the tax credit window offered by the FIRS to certain companies. Billions and trillions of naira can be generated by the government as revenue if these windows are closed to beneficiaries who abuse them and consistently provide the money needed for budget financing with less deficits and borrowing.

“The Nigeria Customs Service should assist in this direction by critically reviewing waivers granted on import duties for certain importers, just as the FIRS should also review the tax credit window offered to certain businesses without services. corresponding corporate social responsibility to Nigerians in terms of planned project executions. like road construction,” he said.

Nigeria’s revenue shortfalls have persisted for so long due to deficiencies in the country’s oil sector. Last month, Nigeria’s oil production fell to 972,000 barrels per day (bpd), pushing Africa’s former biggest oil-producing nation behind Angola and Libya, according to a report by the Organization. oil exporting countries (OPEC).

The latest drop in oil production has pushed Nigeria’s oil output well below its OPEC-stipulated quota of 1,400 million barrels a day. This means that the hope of a recovery in oil revenues is not achievable in the short term.

Nigeria is the only oil-producing country not to have benefited from the oil windfall orchestrated by the Russian-Ukrainian conflict. As an oil-based economy, this has worsened the country’s economic growth, as other means of revenue generation have failed to fund budgets.

One of the main reasons for the income crisis in Nigeria is the fuel subsidy. In 2022 alone, the grant is expected to gobble up more than 74.07% of its capital expenditure. The Federal Government recently assessed the current per diem expenditure of the petrol subsidy at N18.4 billion.

While the 2023 budget story looks sadder, the 6.72 trillion naira projected for a potential grant payment in 2023 indicates that Nigeria’s capital spending could suffer another shortfall. Recently, revenue-generating agencies have made excuses for the failure of remittances, indicating that the projected budget deficit of 12.43 trillion naira for 2023 may be exceeded.