Financial Landscape
The recently approved budget for 2023 by the Federal Government reveals significant allocations for salaries, non-debt recurrent costs, and other crucial sectors.
This financial plan, derived from both the initial 2023 budget and a supplementary budget, outlines key priorities and expenses.
Budget Highlights: Addressing New Expenses
The central government has committed N7.76 trillion for salaries to federal workers and non-debt recurrent costs in the year 2023. This allocation is a response to new expenses, including the agreed-upon wage increase for workers following the removal of the fuel subsidy.
Supplementary Budget: Unveiling Additional Allocations
The Minister of Budget and Economic Planning, Abubakar Bagudu, emphasized the supplementary budget’s focus on national defence, wage rewards, and essential infrastructure.
Notably, N605 billion is allocated for national defence, and an additional N210 billion is designated for wage rewards.
Specific Allocations: Defence, Infrastructure, and Wages
Bagudu detailed the breakdown, stating, “N605bn for national defence and security is to sustain the gains made in security.
It will accelerate the gains in that sector as the funds will be made available to security agencies before the year runs out.” Additionally, N300 billion is earmarked for bridge repairs and road construction, while N210 billion is allocated for wage awards.
Budget Structure: Recurrent and Capital Expenditure
The total budget encompasses N1.01 trillion for recurrent expenditure and N1.17 trillion for capital expenditure.
The supplementary budget aims to elevate the non-debt recurrent expenditure to N7.76 trillion and capital expenditure to N4.53 trillion, bringing the overall 2023 budget to N19.81 trillion.
Expenditure Breakdown: Salaries and More
Within the N7.76 trillion allocated for recurrent expenditure, a substantial portion of N4.31 trillion (55.54 percent) is specifically earmarked for salaries.
The government has already disbursed N978.10 billion for salaries in the first quarter of 2023, as indicated by the 2023 Q1 implementation report.
Revenue Challenges: Borrowing and Fiscal Deficit
To finance the budget, the government has borrowed N2.30 trillion, resulting in an estimated fiscal deficit of N9.01 trillion for the year.
The Federal Government acknowledges concerns about escalating expenditures amidst declining revenues.
Revenue Crisis: Seeking Solutions
The Accountant General of the Federation, Oluwatoyin Madein, expressed concerns about diminishing revenue and rising expenditures, emphasizing the need for continuous strategies to boost revenue. Nigeria’s revenue challenges stem from falling oil production and the imperative to diversify the economy effectively.
Conclusion: Balancing Fiscal Realities
As the Federal Government navigates the delicate balance between expenditure and revenue challenges, the approved budget for 2023 reflects the commitment to addressing critical areas while acknowledging the economic realities facing the nation.
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