By the end of 2023 Nigeria’s total debt would have risen to over N50 trillion, the federal government has said. The total debt stock is currently N41.6 trillion, according to the Debt Management Office, DMO.
But speaking while presenting the 2023 to 2025 Medium Term Expenditure Framework, MTEF and Fiscal Policy Paper, FSP to the House of Representatives’ Committee on Finance, the Minister of Finance, Zainab Ahmed said the government’s debt will rise to over N50 trillion as the plan is underway to borrow more than N11 trillion to finance the proposed 2023 budget.
The minister disclosed to the committee led by James Faleke that the Buhari government is proposing a N19.76 trillion budget for the next fiscal year.
She said N6.72 trillion from the borrowed fund will be used for next year’s petrol subsidy.
Ahmed said “In the first scenario, the 2023 Federal Government revenue is projected at N6.34 trillion, out of which only N373.17 billion or 5.9 percent comes from oil-related sources. The balance of N5.97 trillion is to be earned from non-oil sources.
“In the second scenario, in addition to subsidy reform, this scenario assumes an aggressive implementation of cost-to-income limits of GOEs. With these, the 2023 Federal Government revenue is projected at N8.46 trillion (15.1 percent or N1.51 trillion less than the 2022 budget) but N2.12 trillion more than scenario one.
“Of this N8.46 trillion, N1.99 trillion or 23.6 per cent is projected to come from oil-related sources, while the balance is to be earned from non-oil sources.”
Breaking down the 2023 proposed budget the minister said, “In this (business-as-usual) scenario, 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 per cent if total Federal Government revenues or 5.50 per cent of estimated GDP.
“This is significantly above the three percent threshold stipulated in the Fiscal Responsibility Act, 2007 and there will be no provision for treasury-funded MDAs’ capital projects in 2023,” she noted.
“Federal Government’s 2023 aggregate expenditure is estimated at N19.76 trillion (inclusive of GOEs). In this scenario, 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, above the three percent threshold stipulated in the Fiscal Responsibility Act, 2007,” the minister noted.
