The Senate Committee on Finance has expressed dissatisfaction with the projected N12.41 trillion budget deficit contained in the 2023-2025 MTEF/FSP. The Chairman of the Committee, Solomon Adeola (APC, Lagos), stated the position of the committee on Tuesday during the interactive session on the 2023-2025 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper. Mr Adeola said the committee is alarmed at the proposal to borrow N12.41 trillion to fund the budget. He noted that borrowings cannot continue at the current pace. He said the government must explore means to cut down the deficit by increasing revenue generation and cutting down leakages.
“Let me place it on record at this point that the Senate Committee on Finance started an investigative hearing on 9th March 2021 on remittances of all revenue generating agencies of government to the Consolidated Revenue for the Federation (CRF) as well as payment of the 1% Stamp Duty on all contracts executed in all MDAs.
“The investigation, which is still ongoing, is targeted at blocking revenue leakages as well as boosting revenues of the government in the face of dwindling resources from ‘traditional’ revenue source of crude oil.
“It is also premised on the need to reduce government yearly budget deficits resulting in massive borrowings from local and international sources.
“It is in this wise that the committee frowns at the projected N12.41 trillion budget deficit contained in the 2023-2025 MTEF/FSP and the alarming projection of ‘no provision for treasury-funded MDAs’ capital projects in 2023,” he said.
Mr Adeola stated that the borrowing trends “cannot be allowed to continue unchecked and conscious efforts must be made to reduce budget deficits.”
Proposed budget scenarios by FG
The federal government had proposed two options for the lawmakers to consider for the 2023 budget.
According to the Minister of Finance and National Planning, Zainab Ahmed, in the first scenario, the deficit is projected to be N12.41 trillion in 2023, up from N7.35 trillion budgeted in 2022, representing 196 per cent of total revenue or 5.50 per cent of the estimated GDP. In this option, she added, the government would spend N6.72 trillion on subsidy. The second option involves keeping subsidy till June 2023 and this scenario will take the deficit to N11.30 trillion, which is 5.01 per cent of the estimated GDP. In this option, the PMS subsidy is projected to gulp N3.3 trillion.