MTEF: House Approves N1.7trn for Oil Subsidy, Slashes 2023 Budget Deficit to N10.5trn

*Okays $73 per barrel oil price

Udora Orizu in Abuja 

The House of Representatives, at the plenary Thursday, approved the recommendation by its Committee on Finance that the oil subsidy payable in the 2023 financial year should be N1.7 trillion as against the N3.6 trillion proposed by the executive arm of government.

The lawmakers also reduced the fiscal deficit of N11.3 trillion to N10.5 trillion for 2023. The reduction is based on the expected savings from the subsidy regime amounting to N737.31 billion, as the federal government projected that the scheme will last only in the first six months of the year to the tune of N3.36 trillion.

They 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, be approved as a result of continuous increase in the oil price in the global oil market and other peculiar situations such as continuous invasion of Ukraine by Russia as this will result in saving of N155 billion.

The adjustments followed the adoption of the recommendations of the report of its Committee on Finance report on the 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).

In the report presented by the committee’s Deputy Chairman, Hon. Abdullahi Saidu, the House approved N9.3 trillion revenue as a result of increase in the benchmark as the ceiling oil subsidy of the year in review.

This is above the federal government projected total revenue of N8.46 trillion captured in the MTEF/FSP 2023-2025 presentation by Minister of Finance, Budget and National Planning, Zainab Ahmed to the committee earlier.

The lawmakers 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 with the view of bridging the gap between the official market and parallel market.

Other recommendations approved include: “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, totaling, 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. A significant reduction in both waivers and tax exemptions of Corporate

Organizations 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 Federal Government budget processes to ensure the same level of scrutiny, procurement and monitoring exercise. Ten out of the sixty-three GOEs be placed on the cost of collections with immediate effect,

just like FIRS, CUSTOMS, to serve as a test case for other GOEs which can be added in the future the list of this GOEs includes; NCC, CAC, NPA, NIMASA, NUPRC, NMPDRA, JAMB, NAFDAC; the

proposed 2023 Finance Bill to make amendment of the existing Act and include the above-mentioned

agencies.”

Meanwhile, the House received report from the Chairman police affairs Committee, Hon. Bello Kumo on the issuance from Statutory Budget of the Nigeria Police Trust Fund, the total sum of N65, 905, 252, 467.00 (sixty-five billion, nine hundred and five million, two hundred and fifty –two thousand, four hundred and sixty- seven Naira) only, for personnel and overhead expenditure for the year ending, 2022.