Budget 2023: Senate panel disapproves of N12.42 billion deficit
The Senate Finance Committee has expressed dissatisfaction with the projected budget shortfall of N12.41 trillion contained in the MTEF/FSP 2023-2025.
Committee Chair Solomon Adeola (APC, Lagos) outlined the committee's position on Tuesday during the interactive session on the 2023-2025 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper.< /p>
Mr. Adeola said the committee was alarmed by the proposal to borrow 12.41 trillion naira to finance the budget. He noted that borrowing cannot continue at the current pace.
He said the government should explore ways to reduce the deficit by increasing revenue generation and reducing leakage.
"Let me put on the record at this point that the Senate Finance Committee opened an investigative hearing on March 9, 2021 into remittances from all government revenue-generating agencies to Consolidated Revenue Federation (CRF) as well as payment of 1% stamp duty on all contracts executed in all MDAs.
"The investigation, which is still ongoing, aims to stop revenue leakage as well as increase government revenue in the face of dwindling resources from the 'traditional' crude oil revenue stream.< /p>
"It is also premised on the need to reduce annual government budget deficits, resulting in heavy borrowing from local and international sources.
READ ALSO: Nigeria to exceed borrowing limit in 2023; seeks new N11 trillion loan"It is in this sense that the committee disapproves of the projected budget shortfall of N12.41 trillion contained in the MTEF/FSP 2023-2025 and the alarming projection of "no provision for MDA investment projects financed by the Treasury in 2023," he said.
Mr. Adeola said borrowing trends “cannot be allowed to continue unchecked and conscious efforts must be made to reduce fiscal deficits.”
Budget scenarios proposed by FG
The federal government had offered two options to lawmakers for the 2023 budget.
According to the Minister of Finance and National Planning, Zainab Ahmed, in the first scenario, the deficit is projected to be N12.41 trillion in 2023, compared to the budgeted N7.35 trillion in 2022, or 196% of the total revenue or 5.50% of estimated GDP.
Under this option, she added, the government would spend N6.72 trillion on subsidies.
The second option is to maintain subsidies until June 2023 and this scenario will bring the deficit to N11.3 trillion, or 5.01% of estimated GDP. In this option, the PMS subsidy is expected to gobble up N3.3 trillion.
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The Senate Finance Committee has expressed dissatisfaction with the projected budget shortfall of N12.41 trillion contained in the MTEF/FSP 2023-2025.
Committee Chair Solomon Adeola (APC, Lagos) outlined the committee's position on Tuesday during the interactive session on the 2023-2025 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper.< /p>
Mr. Adeola said the committee was alarmed by the proposal to borrow 12.41 trillion naira to finance the budget. He noted that borrowing cannot continue at the current pace.
He said the government should explore ways to reduce the deficit by increasing revenue generation and reducing leakage.
"Let me put on the record at this point that the Senate Finance Committee opened an investigative hearing on March 9, 2021 into remittances from all government revenue-generating agencies to Consolidated Revenue Federation (CRF) as well as payment of 1% stamp duty on all contracts executed in all MDAs.
"The investigation, which is still ongoing, aims to stop revenue leakage as well as increase government revenue in the face of dwindling resources from the 'traditional' crude oil revenue stream.< /p>
"It is also premised on the need to reduce annual government budget deficits, resulting in heavy borrowing from local and international sources.
READ ALSO: Nigeria to exceed borrowing limit in 2023; seeks new N11 trillion loan"It is in this sense that the committee disapproves of the projected budget shortfall of N12.41 trillion contained in the MTEF/FSP 2023-2025 and the alarming projection of "no provision for MDA investment projects financed by the Treasury in 2023," he said.
Mr. Adeola said borrowing trends “cannot be allowed to continue unchecked and conscious efforts must be made to reduce fiscal deficits.”
Budget scenarios proposed by FG
The federal government had offered two options to lawmakers for the 2023 budget.
According to the Minister of Finance and National Planning, Zainab Ahmed, in the first scenario, the deficit is projected to be N12.41 trillion in 2023, compared to the budgeted N7.35 trillion in 2022, or 196% of the total revenue or 5.50% of estimated GDP.
Under this option, she added, the government would spend N6.72 trillion on subsidies.
The second option is to maintain subsidies until June 2023 and this scenario will bring the deficit to N11.3 trillion, or 5.01% of estimated GDP. In this option, the PMS subsidy is expected to gobble up N3.3 trillion.
Support the integrity and credibility journalism of PREMIUM TIMES Good journalism costs a lot of money. Yet only good journalism can guarantee the possibility of a good society, an accountable democracy and a transparent government. For free and continued access to the best investigative journalism in the country, we ask that you consider providing modest support to this noble endeavour. By contributing to PREMIUM TIMES, you help sustain relevant journalism and keep it free and accessible to everyone.Donate
[embedded content]TEXT ANNOUNCEMENT: Call Willie - +2348098788999
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