Budget 2023: How government will sustain revenue diversification to maximise non-oil sector ─Buhari

*President Muhammadu Buhari discloses the country’s N20.51trillion 2023 transition budget is designed to ‘address critical issues and lay a solid foundation’ for the incoming administration in  the country

Gbenga Kayode | ConsumerConnect

President Muhammadu Buhari has stressed the need for the Nigerian Government to sustain the extant revenue diversification strategy to further increase the non-oil revenue share of total revenues.

ConsumerConnect reports President Buhari said this Friday, October 7, 2022, in his Budget 2023 presentation before the two chambers of the National Assembly (NASS), in Abuja, FCT.

The Federal Government has proposed a record N20.51trillion budget for the 2023 financial year.

The N20.51 trillion budget, considered as the highest so far in the annals of the country’s budgeting history, is expected to be the last the President would present before his tenure of office elapses May 29, 2023.

According to Buhari, this 8th financial blueprint of his administration is tagged the “Budget of Fiscal Sustainability and Transition”.

In his presentation at the NASS Friday, he noted that the 2023 transition budget was designed to address critical issues and lay a solid foundation for the incoming administration.

The President also noted that based on these fiscal assumptions and parameters, total federally-collectible revenue is estimated at N16.87 trillion next year.

The total federally distributable revenue is estimated at N11.09 trillion in 2023, whereas total revenue available to fund the 2023 Federal Budget is estimated at N9.73 trillion, stated he.

Buhari also noted this includes the revenues of 63 Government-Owned Enterprises (GOEs).

He further said that oil revenue is projected at N1.92 trillion, Non-oil taxes are estimated at N2.43 trillion, and FGN Independent revenues are projected to be N2.21 trillion respectively.

Other revenues total N762 billion, while the retained revenues of the GOEs amount to NN2.42 trillion.

According 6o him, the 2023 Appropriation Bill aims to maintain the focus of MDAs on the revenue side of the budget and greater attention to internal revenue generation.

On sustenance of revenue diversification strategy

Buhari said: “Sustenance of revenue diversification strategy would further increase the non-oil revenue share of total revenues.”

While N2.42 trillion would be for spending by Government-Owned Enterprises, the proposed N20.51 trillion 2023 expenditure comprises:

Statutory Transfers of N744.11 billion; Non-debt Recurrent Costs of N8.27 trillion; Personnel Costs of N4.99 trillion; Pensions, Gratuities and Retirees’ Benefits of N854.8 billion; Overheads of N1.11 trillion; Capital Expenditure of N5.35 trillion, including the capital component of Statutory Transfers; Debt Service of N6.31 trillion; and Sinking Fund of N247.73 billion to retire certain maturing bonds.

The government expects a total fiscal operations of to result in a deficit of N10.78 trillion, the President said.

Buhari stated this represents 4.78 percent of estimated GDP, above the 3 percent threshold set by the Fiscal Responsibility Act 2007.

He as well noted: “As envisaged by the law, we need to exceed this threshold considering the need to continue to tackle the existential security challenges facing the country.”

The President disclosed that the government plans to finance the deficit mainly by new borrowings totalling N8.80 trillion, N206.18 billion from Privatisation Proceeds and N1.77 trillion drawdowns on bilateral and multilateral loans secured for specific development projects and programmes.