The House of Representatives has reduced the fiscal deficit of N11.3 trillion to N10.5 trillion for the next financial year.
This is ahead of the presentation of the N19.76 trillion budget proposal for 2023 by President Muhamadu Buhari.
The reduction is based on the expected savings from the subsidy regime amounting to N737.31 billion, as the Nigerian government projected that the scheme would last only in the first six months of the year to the tune of N3.36 trillion.
The adjustment followed the approval of the recommendations of the report of the House Committee on Finance report on the 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) at plenary on Thursday.
According to the report presented by Abdullahi Saidu, Deputy Chairman of the finance committee, the House approved N9.3 trillion in revenue as a result of the increase in the benchmark as the ceiling oil subsidy of the year in review.
This is above the Nigerian government projected total revenue of N8.46 trillion captured in the MTEF/FSP 2023-2025 presentation by the Minister of Finance, Budget and National Planning, Zainab Ahmed to the committee earlier.
The House also approved the recommendations of the daily crude oil production of 1.69mbpd, 1.83mbpd, and 1.83mbpd for 2021, 2022 and 2023 respectively and the oil price of $73 per barrel of crude oil due to continuous increases in the oil price in the global oil market and other peculiar situations such as continuous invasion of Ukraine by Russia as that will result in saving of N155 billion.
The Green chamber further approved the exchange rate of N437.57 as contained in the MTEF FSP document with continuous engagement between the Central Bank of Nigeria and the Federal Ministry of Finance, Budget and National Planning with the view of bridging the gap between the official market and parallel market.
It equally approved: “the projected GDP growth rate of 3.75% be approved; the projected Inflation rate of 17.16%; projected New Borrowings of N8.437 trillion (including Foreign and domestic Borrowing), subject to the approval of the provision of details of the borrowing plan by the National Assembly; fiscal deficit of N10.563 trillion (including GOEs).
“Statutory transfers, totalling, N722.11 billion; Debt Service estimate of N6.31 trillion; sinking Fund to the tune of N247.7 billion; Pension, Gratuities & Retirees Benefits of N827.8 billion.
“Aggregate FGN Expenditure of N19.76 trillion; made up of Total Recurrent (Non-debt) of N8.53 trillion; Personnel Costs (MDAs) of N827.8 billion; Capital expenditure (exclusive of Transfers) N3.96 trillion; Special Intervention (Recurrent) amounting to N350 billion; and Special intervention (Capital) of N7 billion.”
The House also approved the committee’s recommendation that the cost of petroleum subsidy be capped at N1.7 trillion and accordingly.
All relevant agencies of the governments would be required to take necessary action to keep the petroleum subsidy cost to the government within the N1.7 trillion ceiling in 2023.
By this action, the committee said, “the sum of N737,306, 443,151 will be saved and that should be used to reduce the fiscal deficit of N11.3 trillion of the government as contained in the MTEF/FSP.”
Other approvals given by the House are the committee’s recommendations that: “a significant reduction in both waivers and tax exemptions of Corporate Organisations to cushion the effect of the budget deficit.
“All revenue-generating agencies should reconcile their accounts with the Fiscal Responsibility Commission and the Office of the Accountant General of the Federation (OAGF), the report of which should be submitted to the Committee of Finance for consideration and approval.
“There should be a common electronic platform for reconciliations amongst the government MDAs, OAGF and Fiscal Responsibility Commission for effective monitoring and remittances; there should be strict compliance with the Constitution, Fiscal Responsibility Act and other extant laws by all agencies of the Government with regards to revenue remittances.
“The relevant oversight Committees of the National Assembly are at liberty to remove recycled projects in their budget proposal during the Committees’ budget defence; mainstreaming of annual GOEs’ budgets into the Nigerian Government budget processes to ensure the same level of scrutiny, procurement and monitoring exercise.”
VON