FG set to borrow a token of N11.3 trillion to fund 2023 budget; exceeds borrowing limit

The Federal Government is planning to borrow N11.3 trillion to fund the N19.76 trillion proposed 2023 budget.

The Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, disclosed this while presenting the 2023 to 2025 Medium Term Expenditure Framework (MTEF) and Fiscal Policy Paper (FSP) to the House of Representatives’ Committee on Finance chaired by Honourable Abiodun Faleke. She also said the government’s budget deficit is expected to exceed N12.42 trillion if it should keep petroleum subsidy for the entire 2023 fiscal cycle.

According to her, the fiscal parameters for the year showed that oil production volume was pegged at 1.69mbpd, oil benchmark – $70 per barrel, exchange rate – N435.57/$; N8.501 trillion as total oil and gas revenue; N1.105 trillion as derivation; N7.396 trillion as total oil and gas revenue after derivation; deductions – N3.538 trillion while other federally funded upstream projects pegged at N3.432 trillion.

The minister presented two scenarios of budget parameters on fuel subsidy estimated at N6.72 trillion for full year 2023 (business-as-usual scenario) as well as possible provision of N3.36 trillion for mid-year 2023 (reform scenario).

The lawmakers, however, expressed grave concerns over the rationale behind the spike in the fiscal deficit pegged at N11.30 trillion for 2023 against N7.35 trillion fiscal deficits for 2022.