MON, 24 OCT, 2022-theGBJournal| According to the breakdown of the 2023 budget presented by the Finance Minister, Zainab Shamsuna Ahmed, the Federal Government of Nigeria (FGN) proposes to spend N20.51 trillion in 2023-major components include non-debt recurrent expenditure (N8.27 trillion), debt service (N6.31 trillion) and aggregate capital expenses (N5.35 trillion).
Similarly, the government expects to generate N9.73 trillion aggregate revenue, with 47.7% expected to come from both independent revenue and Government Owned Enterprises (GOEs) retained revenue.
Accordingly, the government projects the fiscal deficit to settle higher at N10.78 trillion in 2023 (vs 2022 budget: N7.35 trillion). As usual, the Independent Revenue and GOEs retained revenue estimates are overoptimistic in our view, even as we expect the non-oil revenue performance to be in line with the budget.
Notably, independent and GOEs retained revenue underperformed their prorated budget targets by 50.3% and 50.8%, respectively, as of 8M-22. However, we expect the government expenditure to be relatively in line with the target (7-year average: 91.2% performance).
Consequently, we see the 2023E fiscal deficit higher than the budgetary estimates, indicating higher borrowing compared to 2022E levels.-With Cordros Research
Twitter-@theGBJournal| Facebook-The Government and Business Journal|email: gbj@govbusinessjournal.ng|govandbusinessj@gmail.com
