Representatives approve N8.4tn borrowing, N6.3tn debt servicing

…as Buhari presents an appropriations bill to the National Assembly today

The President, Major General Muhammadu Buhari (Retired), will table the Finance Bill 2023 on Friday (today) before a joint session of the National Assembly in Abuja.

Ahead of the presentation of the federal government’s budget, the House of Representatives on Thursday adopted the medium-term expenditure framework and the 2023-2025 budget strategy document, which the president previously presented to the National Assembly.

The passage follows consideration of the Finance Committee’s report on the MTEF/PSF by the Committee of Supply.

The Chamber approved aggregate FGN expenditures of 19.76 tn, consisting of a recurrent total (excluding debt) of 8.53 tn; personnel costs (MDA) of N827.8 billion; capital expenditure (excluding transfers), N3.96tn; special intervention (recurring) of N350bn; and special intervention (capital) of N7 billion.

The Federal Government had proposed a budget with estimates totaling N19.76tn, while the deficit was expected to hover between N11.30tn and N12.41tn in the financial year 2023.

Minister of Finance, Budget and National Planning, Zainab Ahmed, during the public hearing organized by the Chamber on the MTEF/FSP, had decried that the government may not be able to provide investment projects financed by the treasury next year, in particular due to the drop in income. and the payment of a subsidy on Premium Motor Spirit, better known as gasoline.

Ahmed, while noting that the government has two options, said the first scenario assumed that the subsidy on the PMS, which was estimated at N6.7 billion for a full year, would remain in 2023 and be fully funded.

The second scenario is the reform scenario which assumes that the petrol subsidy will continue until mid-2023, based on the 18-month extension announced in early 2021, in which case only N3.6 billion would be planned.

However, in the report, the committee recommended N1.7tn for the gasoline subsidy.

It also approved borrowings of N8.4tn and N6.3tn for debt servicing.

The committee recommended daily crude oil production of 1.69 million barrels, 1.83 mbpd and 1.83 mbd for 2023, 2024 and 2025, respectively.

The committee also recommended a benchmark crude oil price of $73 per barrel “due to the continued increase in the price of oil in the global oil market and other special situations such as the continued invasion of Ukraine by Russia, as this will lead to an economy of 155 billion naira.”

While the House maintained an exchange rate of 437.57 naira per US dollar as proposed in the MTEF/FSP, the committee called for continued engagement between the Central Bank of Nigeria and the Federal Ministry of Foreign Affairs. Finance, Budget and National Planning” with a view to bridging the gap between the official market and the parallel market.

Lawmakers also approved a projected gross domestic product growth rate of 3.75% and an inflation rate of 17.16%.

The committee further recommended “that the projected new borrowing of N8,437 billion, including foreign and domestic borrowings, be approved, subject to the approval of the provision of details of the borrowing plan by the Assembly national”.

Speaking to reporters after the plenary, Deputy Chairman of the House Finance Committee, Musa Abdullahi, said borrowing was not bad for the economy, stressing the need to pay attention to the generation of income to repay debts. He also explained that lawmakers had cut the gas subsidy allocation.

Abdullahi said in part: “There are so many uncertainties surrounding the payment of grants. So what we have decided to do is to smooth it out by making a provision of 1.7 billion naira for the payment of the subsidy. We plan to build some of our refineries by early next year. Port Harcourt (refinery), for example, is expected very soon.

Meanwhile, the House on Thursday received the report of its Police Affairs Committee on the Nigeria Police Trust Fund’s proposed N65.9 billion budget.

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