SAT. 07 JANUARY, 2023-theGBJournal| During the week, the Minister of Finance presented the 2023FY-approved budget to the public.
Based on the presentation, we highlight that the FGN now expects aggregate revenue of N10.49 trillion in 2023FY – oil revenue (N2.23 trillion), non-oil revenue (N2.43 trillion), independent revenue (N2.62 trillion), GOEs revenue (N2.42 trillion), and other revenue (N794.13 billion).
Simultaneously, the FGN expects aggregate expenditure to settle at NGN21.83 trillion.
Accordingly, the government expects a fiscal deficit of N11.34 trillion to be financed by the combination of domestic borrowing (N7.04 trillion), foreign borrowing (N1.76 trillion), multilateral/bilateral funding (N1.77 trillion), privatisation proceeds (N206.18 billion), and additional revenue from spectrum fees and tax on the maritime sector (N553.46 billion).
Using historical performance and factoring current realities and risks, our revised estimates show the 2023FY fiscal deficit could print between N12.35 – N14.53 trillion, with a base case scenario of N13.28 trillion.
Consequently, considering that the government is unlikely to patronise the Eurobond market in 2023FY, given foreign investors’ continued preference for safe-haven assets, we expect the FGN to increase its domestic borrowing and reliance on the CBN’s Ways & Means advances.
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