News Update?FG earmarks N470bn for ASUU as Buhari proposes N20.51trn budget for 2023

• Projects N9.73trn revenue, N8.8trn new borrowing 

• Says petrol subsidy not sustainable 

• President, VP to spend N3.34bn on trips; N1.90bn on new vehicles, spares

• Oil thieves nigeria’s worst enemies, saboteurs – Lawan, Gbajabiamila 

 

Abdullateef Salau, Balarabe Alkassim, Abbas Jimoh, Abuja & Abiodun Alade, Lagos

 

The federal government has earmarked N470 billion for revitalisation and salary enhancement in tertiary institutions in the 2023 budget proposal. 

Funding for the revitalisation of public universities is among the demands of the Academic Staff Union of Universities (ASUU), which has been on strike since February.

While presenting the N20.51 trillion 2023 budget estimate to the joint session of the National Assembly yesterday, President Muhammadu Buhari renewed his appealed to university lecturers to show a better appreciation of the country’s current situation and return to the classroom.

The N20.51trn estimate is N750 billion higher than the N19.76trn projected in the approved 2023 to 2025 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), partly to accommodate ASUU’s demands. 

The striking university lecturers, who are demanding N1.2trn, had earlier rejected a proposal of N150bn by the federal government for the first quarter of 2023.

Buhari, in his last budget speech, said his administration remained committed to the implementation of agreements reached with staff unions within available resources.

He, however, added that the federal government would not sign any agreement it would not be able to implement.

He said government alone could not provide the resources required for funding tertiary education, and urged universities to find other means of funding instead of solely relying on government’s budget.

“In most countries, the cost of education is jointly shared between the government and the people, especially at the tertiary level. It is imperative, therefore, that we introduce a more sustainable model of funding tertiary education,” he said. 

Budget details 

The 2023 budget estimate has a revenue projection of N9.73trn, with a deficit of N10.78trn, representing 4.78 per cent of an estimated gross domestic product (GDP). This is above the 3 per cent threshold set by the Fiscal Responsibility Act, 2007.

Buhari told the federal lawmakers that his government planned to finance the deficit mainly by new borrowings, totaling N8.80trn. 

The budget proposal is predicated on N435.57 per dollar exchange rate, oil benchmark of $70 barrel per day and oil production volume of 1.69million barrels per day.

Inflation rate was projected at 17.16 per cent, while GDP growth rate was fixed at 3.75 per cent. 

The proposed N20.51trn expenditure comprises of statutory transfers of N744.11bn; non-debt recurrent costs of N8.27trn, personnel costs of N4.99trn, and pensions, gratuities and retirees’ benefits of N854.8bn. 

The breakdown also showed that N1.11trn is for overheads, N5.35trn for capital expenditure and N6.31trn for debt service. 

Buhari said the budget was prepared to reflect the serious challenges currently facing the country, key reforms necessary to address them, and imperatives to achieve higher, more inclusive, diversified and sustainable growth.

Speaking on the performance of the 2022 budget, Buhari said that as at July 31, federal government’s retained revenues was N3.66trn, representing 63 per cent of its target, largely due to the underperformance of oil and gas revenue sources.

On the expenditure side, he said the sum of N8.29trn had been spent by July 31, 2022, out of the total appropriation of N17.32trn. 

He said a total of N3.09trn was spent on debt service obligations during the period, while about N1.48trn had been released to ministries, departments and agencies for capital expenditure.

‘Fuel subsidy controversial, not sustainable’

The president disclosed that the trillions being paid as petroleum subsidy over the years had been controversial and no longer sustainable.

Giving an overview of the 2022 budget, he said oil output stood at an average of 1.30million barrels per day as at June 2022, while the sum of N1.59trn was spent on fuel subsidy between January and June 2022.

“Petrol subsidy has been a recurring and controversial public policy issue in our country since the early eighties.  However, its current fiscal impact has clearly shown that the policy is unsustainable,” Buhari noted.

He also expressed concern over the practice where government-owned enterprises liaised directly with relevant National Assembly committees to have their budgets passed and issued to them directly without presidential assent. 

He said the practice was at variance with the budgets sanctioned by him, and raised doubts about the transparency of government’s spending proposals.

He urged the lawmakers to return all the budget estimates to the Presidency when passed. 

However, Senate President Ahmad Lawan, in his speech earlier, urged the federal government to consider taking off some GOEs, especially the major revenue generating agencies from direct funding by placing them on cost of collection of revenues.

He said agencies like nigeria Ports Authority, (NPA), nigeria Communications Commission, (NCC), nigeria Maritime Administration and Safety Agency, (NIMASA), etc can be given encouraging cost of collections of revenues. 

The condition, he said, would require courageous fiscal policy to redress, by reducing the deficit, not just to avoid further increases in our debts, but to ensure macro-economic stability, grow confidence in the system and guarantee sustainable economic growth.

Lawan, Gbajabiamila express concern over oil theft

Senate President Ahmad Lawan and the Speaker, House of Representatives, Femi Gbajabiamila, in their separate remarks, expressed concern over the devastating effect of oil theft on the country’s economy.

Lawan said oil theft had taken a monumental dimension as nigeria now losses 1m barrels per day to thieves, resulting to revenue loss of N790bn in the first quarter of 2022. 

The Senate president said the idea of deploying revenues from oil and gas to support diversification into sectors like agriculture, manufacturing and mining is now under serious threat. 

He described oil thieves as the worst enemies of nigeria, saying they had declared war on the country and its citizens.  

“We can reduce the deficit by stopping the theft. We can also consider other options to source more revenues for government. I believe it is imperative to review the waivers and concessions government has granted, to the tune of N6trn,” Lawan said. 

Speaker Gbajabiamila described those who engage in oil theft as economic saboteurs whose action amounts to treason.

“We are, therefore, urging a swift and systemic overhaul of the systems in place to protect the country’s oil and gas resources,” he said. 

Action Aid tasks N/Assembly on national interest

Speaking with Daily Trust Saturday on the matter in Abuja, the Country Director, ActionAid nigeria (AAN), Ene Obi, urged the National Assembly to prioritize national interest in their consideration of the budget estimate submitted to it on Friday by President Muhammadu Buhari.

“The lawmakers should consider the interest of all Nigerians and the country above any other considerations. The proposals are with lawmakers and should let Nigerians interest be uppermost,” she said.

2023 budget amplifies troubling fiscal outlook – Former LCCI boss

An economist and former Director General of the Lagos Chamber of Commerce and Industry (LCCI), Dr Muda Yusuf, has said the 2023 federal government budget presented yesterday by President Muhamamdu Buhari, further amplified the troubling fiscal outlook for the economy.

He lamented that expenditure continues to accelerate amid consistent weak revenue performance.

“We have a budget of N20.51trn and revenue projection of N9.73trn. This is a deficit of N10.78trn.  In all probability, the deficit will be much bigger by year end because of the track record of revenue under performance over the last couple of years. We are also likely to see an acceleration of CBN financing of the fiscal deficit given the revenue performance trajectory. The public debt stock is growing and currently at N42trn.

“With additional borrowing of N8.8trn, the debt profile will be inching close to N50trn by May next year.  If we take into account the borrowing from the CBN, which is currently about N20trn, we will have a total debt of N70trn by the end of 2023. This should be a cause for concern,” he said.

He said a number of issues need to be addressed to achieve the country’s fiscal sustainability aspiration.

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