On October 7, 2022, President Muhammadu Buhari submitted the 2023 Budget proposal ("the Budget") to the Joint Session of the National Assembly. The "Budget of Fiscal Sustainability and Transition" is intended to achieve the National Development Plan 2021-2025 and to aid in the seamless transition from one government to the next.
The budget expenditure of N20.51trn represents the highest in Nigeria’s history, and is to be (partly) funded by expected revenue of N9.73 trn. The country’s highest recorded deficit of N10.78trn (4.78% of estimated GDP) is to be financed by new borrowings, privatisation proceeds and drawdown on loans already secured for specific projects.
The budget deficit is nearly 11% more than the estimated income of N9.73 trillion. To put it another way, Nigeria has to earn 111% of its present revenue (or more than double its revenue) in order to satisfy its expenditure demands without borrowing.
The non-debt recurrent expenditure (NDRE) of N8.27 trillion remains the greatest expense in the budget (approximately 40%), and is 16% more than the N7.11 trillion revised budget for 2022. It comprises N4.99 trillion in human costs, which accounts for 60.33% of NDRE.
Debt service spending, projected at N6.31 trillion, increased by 71% from 2022. It accounts for 31% of the projected budget spending for 2023. The enormous surge in debt payment suggests that there may be a larger gap in the anticipated deficit of 2022, necessitating further borrowings as well as higher interest rates.
The capital spending (without the mandatory transfer component) of N4.93 trillion constitutes almost one-quarter of the 2023 budget expenditure and is down 8.88% from 2022.
The expected income for 2023 is N9.7 trillion, which is 2.4% less than the amended budget amount of N9.9 trillion for 2022.
The President mentioned many vital areas that require immediate assistance, including:
Human Capital Development - In order to address the continuing problem in public universities, the Federal Government (FG) has allocated N470 billion in the budget to revitalise and raise the pay of federal officials in academic institutions. The administration indicated its desire to renovate infrastructure and equip existing hospitals, with a focus on local manufacturing of basic medicines/vaccines.
Defence and Internal Security – The FG announced that it intends to prioritize security in the budget by equipping and inspiring security personnel. Defence and the National Security Adviser spending account for N1.2trn (26% of the N4.5trn allocated for Ministries, Departments, and Agencies).
2022 Finance Bill - The President stated that negotiations on the 2022 Finance Bill, a document that alters current tax and fiscal legislation, are underway, and that the Bill will be sent to the National Assembly for examination and signing into law.
NABRO is an initiative of the Nigerian legislature to support its work in its engagements with Executive institutions. We provide independent, unbiased and non-partisan analysis of budget estimates.