By Tony Obiechina, Abuja
The Director General, Budget Office of the Federation (BOF), Mr Ben Akabueze says the introduction of technology in the preparation of Federal government Budgets has drastically minimized errors and facilitated timely passage of the budget.
Speaking at the public presentation of the the 2023 Budget by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed in Abuja, the Director General said the initiative has also ensured a sustainable return to a predictable January to December fiscal year.
Akabueze said “we are normally very reticent about the improvements we have brought to bear on the FGN budget process over the past 6 years, but I will break with that tradition today, albeit briefly”
According to him, the improvements include, enhanced use of technology in the budget process, service-wide implementation of the GIFMIS Budget Preparation System; and Creation of a Budget Office Help Desk to provide guidance/support to MDAs throughout the budget process, adding that the BOF Help Desk which functions physically as well as on virtual platforms, has also contributed to improved efficiency of the budget process.
“In a bid to enhance budget comprehensiveness and transparency, the FGN’s budget now includes all projects funded by bilateral/multilateral loans, donor-funded programmes/projects as well as the revenues and expenditures of 63 major Government Owned Enterprises / regulatory agencies”, he added.
The Director General further stated that the introduction enhanced and ensured timely availability of budget related information to the public through the Budget Office website as well as responsiveness to Freedom of Information requests.
“This has facilitated greater public participation in the budget process, Strategic refocusing of the budget to the revenue side hereof rather than a mere statement of expenditure proposals. This led to a redesign of the Appropriation Bill to include both revenue and expenditure estimates, and has contributed to the substantial growth in non-oil revenue performance recorded.
“A new Performance Management Framework was introduced to support this process. Three years ago, we reintroduced the enactment of annual Finance Acts to keep our fiscal policies/laws up to date and support the implementation of the annual budgets”, Akabueze noted.
He said this was the first since the return to democratic governance this would happen, arguing that “these improvements have been validated by the significant improvements in FGN’s Public Expenditure & Fiscal Accountability Review ratings by the World Bank”..
While giving the breakdown of the Budget, the Minister disclosed that the overall budget deficit of N10.78 trillion for 2023 will largely be financed through domestic loans.
She said that the budget deficit will be financed mainly by borrowings including domestic sources, N7.04 trillion; foreign sources, N1.76 trillion; multilateral and bi-lateral loan drawdowns, N1.77 billion and expected N206.18 billion proceeds from privatization of national assets.
“There is a continuing need to exceed this threshold considering the existential security challenges facing the country,” Ahmed said.
The minister said Nigeria has no plan to restructure its debt as government remains committed to meeting its domestic and external debt obligations.
According to her, government will continue to utilize appropriate debt management tools to streamline the cost and risk profile in the debt portfolio, including through concessional loans, spreading out of debt maturities to avoid bunching, and re-profiling of the debt maturities by refinancing short-term debt using long-term debt instruments.
She explained that total revenue available to fund the 2023 FGN Budget is estimated at N9.73 trillion. This includes the gross revenues of 63 Government-Owned Enterprises (GOEs) totalling N3.48 trillion. Of this, Federal government oil revenue share is projected at N1.92 trillion, non-oil taxes are estimated at N2.43 trillion, and independent revenues are projected to be N2.21 trillion. Other revenues total N762 billion. The GOEs will remit N1.06 trillion to federal government’s Consolidated Revenue Fund, and retain N2.42 trillion for their expenditures and reserves.
In aggregate, 20 per cent of projected revenues is expected from oil-related sources, while 80 per cent is to be earned from non-oil sources.
The 2023 Aggregate FGN expenditure (inclusive of GOEs and project-tied Loans) is projected to be N20.51trillion, which is 18.4 percent higher than the amended 2022 Budget. Recurrent (non-debt) spending, estimated to amount to N8.47 trillion, inclusive of N200 billion social investment programme.
Aggregate capital expenditure of N5.34 trillion is 26 per cent of total expenditure; and 8.8percent lower than the 2022 Budget, inclusive of capital component of statutory transfers, GOEs capital and project-tied loans expenditures. At N6.31 trillion, debt service is 30.8 per cent of total expenditure. This is 71.2 per cent higher than the 2022 estimate as it includes interest payment of N1.2 trillion for Ways and Means.
Total public debt as a percentage of Gross Domestic Products (GDP) stood at 23.06 percent as at June 30, 2022, within 55 per cent threshold recommended by the International Monetary Fund (IMF) and World Bank (WB) as well as Nigeria’s self-imposed limit of 40 percent set in the MTDS 2020-2023, even after including the outstanding balance on CBN Ways and Means Advances.
