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From Okwe Obi, Abuja
The Federal Government has said there may not be provision for treasury funded capital projects in Ministries, Department and Agencies ( MDAs) in the 2023 fiscal year.
Minister of Finance, Budget and National Planning, Zainab Ahmed, who stated this, yesterday in Abuja, also pegged aggregate expenditure for the 2023 fiscal year at N19.76 trillion.
Ahmed, who spoke while presenting the Medium Term Expenditure Framework ( MTEF) and Fiscal Strategy Paper ( FSP) to House of Representatives Committee on Finance, pegged the budget deficit for the 2023 fiscal year at between N11.30 trillion to N12.41 trillion.
She said this will however be dependent on whatever decision the government makes on the payment of subsidy on Petroleum Premium Spirit (PMS).
Speaking on key assumptions for the 2023 appropriation would be based on, the minister put the oil benchmark at $70 per barrel.
She added that the oil production benchmark is 1.69 million barrels per day, with an exchange rate of N435.02 to the US dollar.
According to her, inflation is expected to be at 17.16 percent, while the Gross Domestic Product ( GDP) is expected to grow at 3.75 percent. “The budget deficit is projected to be N11.30 trillion in 2023, up from N7.35 trillion in 2022.
“This represents 5.01 percent of the estimated GDP, which is above the 3 percent threshold stipulated in the Fiscal Responsibility Act, 2007.
“Given the severely constrained fiscal space, budget deficit is projected to be N12.41 trillion in 2023, up from N7.35 trillion budgeted in 2022, representing 196 percent of total FGN revenue or 5.50 percent of the estimated GDP.
“This is significantly above the 3 percent threshold stipulated in the Fiscal Responsibility Act 2007 and there will be no provision for treasury funded MDA’s capital projects in 2023.”
Ahmed who stated that subsidy payment was exacting pressure on the finances of the country explained that “the subsidy on PMS was estimated to have been N6.72 trillion for the full year, that is if we decide to keep subsidy from January to December.
“PMS subsidy will remain up to June that is mid-year 2023 based on the 16 months extension that was announced earlier in 2021 based on which the 2022 budget was amended.
“In this case only N3.36 trillion will be provided for in the 2023 appropriation.
“The PMS subsidy will be provided only from January to June, and that is what is convened to the parliament for consideration.
“The oil production has been projected to be at 1.69 million barrels per day with a budgeted crude oil price per barrel at $70 dollars and average exchange rate of N435. 67 kobo.” She said there would be an upward pressure on oil prices expected to be driven by the current large effect of the global price surge due to the Russia and Ukraine war.
