President Muhammadu Buhari told a joint session of the National Assembly that the 2023 budget deficit of N10.78 trillion would be funded by borrowing, sales of national assets and project-specific loans.
Buhari made the revelation, on Friday, while presenting the Appropriation Bill of N20.51 trillion for 2023.
The budget includes N2.42 trillion spending by government-owned enterprises. It is also about N3 trillion higher than the 2022 budget.
Meanwhile, if government will spend N6.31 trillion from the about N9 trillion left to service outstanding debts, it will leave N3 trillion that will be easily gulped by fuel subsidy.
However, President Buhari described the 2023 appropriation as a budget of “fiscal sustainability and transition”.
He told the joint assembly that 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.”
The President explained that the principal objective in 2023 was to maintain fiscal stability and ensure a smooth transition to the incoming administration.
President Buhari made a lower projection of budget deficit by pegging it at N10.78 trillion, against N11.30 trillion proposed in the MTEF/ FSP documents.
He said: “We plan to finance the deficit mainly by new borrowings totaling N8.80 trillion; N206.18 billion from privatization proceeds and N1.77 trillion drawdowns on bilateral/multilateral loans secured for specific development projects/programmes.”
He listed the assumptions and parameters upon which the projected N20.51 trillion 2023 budget was based.
There is oil price benchmark of $70 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 N435.57 per US Dollar and projected GDP growth rate of 3.75 percent and 17.16 percent inflation rate.
Other critical components of the budget are N744.11 billion for Statutory Transfers, N8.27trillion for non-debt recurrent costs, N4.99 trillion for personnel costs, N854.8 billion for pensions and gratuities of retirees.
Others are N1.11 trillion for overheads cost , N5.35 trillion 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.
