The Federal Government recorded a deficit of N5.33 trillion, or N430.82 billion more than the prorated level, between January and August 2022 despite Nigeria’s limited fiscal space.
Out of the N11.55tn pro rata projected expenditure for the period, the government spent N9.56tn from January to August 2022.
N3.52 trillion of the N9.56 trillion spent in eight months went toward debt service, and N2.89 trillion went toward personnel costs and pensions.
The total projected expenditure for 2022 is N17.32 trillion.
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This was disclosed by the Zainab Ahmed, Minister of Finance, Budget and National Planning, during the ministerial presentation of the 2023 budget on Wednesday in Abuja.
She added that the Federal Government’s retained revenue as of August 2022 was N4.23 trillion, representing 64% of the pro-rata target of N6.65 trillion.
She revealed that the Federal Government’s share of oil revenues in 2022 would be N395.06 billion, representing a 27.1 percent performance, while non-oil tax revenues would total N1,549.91 trillion, representing a 102.9 percent performance.
Ahmed further revealed that the Companies Income Tax and the Value Added Tax collections this year totaled N826.27bn and N210.36bn respectively, representing 136.3 per cent and 99.6 per cent of their respective targets.
Customs’ collections comprising import and excise duties, fees, and federation account special levies fell short of the target by N102.51bn (17 per cent).
“The Customs introduced that thing and it has created a lot of revenue setbacks for the government. The government should look at it seriously and reduce it and cancel the VIN. It is illegal and should be cancelled,” founder of the National Council of Managing Directors of Licensed Customs Agents, Mr Lucky Amiwero, told The Punch recently.
According to Ahmed, the key parameters and other macroeconomic projections driving the medium-term revenue and expenditure framework had been revised in line with the emergent realities, including the GDP growth (from 4.20 to 3.55 per cent in 2022 forecast).
For the 2023 budget, she said investment, especially from foreign sources, was expected to be hit by interest rate hikes in advanced economies, foreign exchange management concerns in Nigeria and other domestic challenges, including insecurity.
“Overall budget deficit is N10.78tn for 2023. This represents 4.78% of GDP,” Ahmed said, noting that budget deficit would be financed mainly by borrowings from domestic sources (N7.04tn); foreign sources (N1.76tn); multilateral /bi-lateral loan drawdowns (N1.77bn), and privatisation proceeds (N206.18bn).
The Federal Government, in 2020, launched the Strategic Revenue Growth Initiative with a view to tapping sources that would boost and diversify Nigeria’s revenue base.
However, revenues have suffered since then, with debt service harming the country’s fiscal outlook.
Ben Akabueze, Director-General of the Federation’s Budget Office, stated that the government had significantly improved the use of technology in the budget process, including the service-wide implementation of the GIFMIS Budget Preparation System.
He stated that the Federal Government’s budget now included all projects funded by bilateral/multilateral loans, donor-funded programs/projects, as well as the revenues and expenditures of 63 major government-owned enterprises/regulatory agencies, in an effort to improve budget comprehensiveness and transparency.
