Nigerian government to borrow N11 trn to fund 2023 budget – finance minister
Minister of Finance and National Planning, Zainab Ahmed, said the federal government will borrow more than 11 trillion naira and sell national assets to finance the budget deficit in 2023.
She also said that the government's budget deficit is likely to exceed N12.42 trillion if it were to maintain oil subsidies for the entire 2023 fiscal cycle.
Ms. Ahmed revealed this on Tuesday during her appearance before the House Finance Committee to defend the 2023-2025 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).< /p>
Explaining the two scenarios to the committee, the minister said the first option is to keep the oil subsidy for the whole of fiscal year 2023.
President Muhammadu BuhariShe says the deficit is expected to be N12.41 trillion in 2023 from N7.35 trillion of naira budgeted in 2022, representing 196% of total revenue or 5.50% of estimated GDP. Under this option, she added, the government would spend 6.72 trillion naira on subsidies.
Ms. Ahmed said the second option is to maintain subsidies until June 2023 and this scenario will bring the deficit to 11.3 trillion naira, or 5.01 trillion naira of the estimated GDP. In this option, the PMS subsidy is expected to swallow N3.3 trillion.
She noted that the first option is unlikely to be feasible based on the current trend, while the second option would require a stricter application of the performance management framework for public enterprises, which would significantly increase the operating surplus in 2023.
The projected deficit under the second option, the minister said, should be financed by new borrowing from local and international sources. This will include a total of N9.32 trillion in new borrowing, including N7.4 trillion from domestic sources and N1.8 trillion from foreign sources. The government is expected to generate N206.1 billion from privatization proceeds and N1.7 trillion in project-related multilateral loans.
Minister of Finance and National Planning, Zainab Ahmed, said the federal government will borrow more than 11 trillion naira and sell national assets to finance the budget deficit in 2023.
She also said that the government's budget deficit is likely to exceed N12.42 trillion if it were to maintain oil subsidies for the entire 2023 fiscal cycle.
Ms. Ahmed revealed this on Tuesday during her appearance before the House Finance Committee to defend the 2023-2025 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).< /p>
Explaining the two scenarios to the committee, the minister said the first option is to keep the oil subsidy for the whole of fiscal year 2023.
President Muhammadu BuhariShe says the deficit is expected to be N12.41 trillion in 2023 from N7.35 trillion of naira budgeted in 2022, representing 196% of total revenue or 5.50% of estimated GDP. Under this option, she added, the government would spend 6.72 trillion naira on subsidies.
Ms. Ahmed said the second option is to maintain subsidies until June 2023 and this scenario will bring the deficit to 11.3 trillion naira, or 5.01 trillion naira of the estimated GDP. In this option, the PMS subsidy is expected to swallow N3.3 trillion.
She noted that the first option is unlikely to be feasible based on the current trend, while the second option would require a stricter application of the performance management framework for public enterprises, which would significantly increase the operating surplus in 2023.
The projected deficit under the second option, the minister said, should be financed by new borrowing from local and international sources. This will include a total of N9.32 trillion in new borrowing, including N7.4 trillion from domestic sources and N1.8 trillion from foreign sources. The government is expected to generate N206.1 billion from privatization proceeds and N1.7 trillion in project-related multilateral loans.
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