During the ministerial presentation of the 2023 budget, the Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, said that the Federal Government has recorded a deficit of N5.33 trillion between January and August 2022, which is N430.82 billion above the prorate level.
The government spent N9.56 trillion from January to August 2022, out of N11.55 trillion pro rata expenditure projected for the period. Of the N9.56tn spent in eight months, N3.52tn was expended on debt service while N2.89tn was used for personnel costs and pensions.
The total expenditure projected for the whole of 2022 is N17.32tn.
Ahmed said the Federal Government’s retained revenue was N4.23 trillion as of August 2022, representing 64 per cent of the pro-rata target of N6.65tn.
She disclosed that the Federal Government’s share of oil revenues in 2022 was N395.06bn, representing 27.1 per cent performance, while non-oil tax revenues totalled N1,549.91tn, indicating 102.9 per cent performance.
Ahmed further revealed that the Companies Income Tax and the Value Added Tax collections this year totalled 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.
But revenues have not fared so well since then, with debt service hurting the country’s fiscal outlook.