Emmanuel OchayiNigeria’s Federal Government is grappling with financial commitments as the latest budget forecasts a portion of funds—N7.76tn—allocated to cover salaries, recurrent expenses, and new outlays outlined in the 2023 supplementary budget.
This budget, necessitated by additional expenses like the agreed wage hike for workers post-fuel subsidy removal, paints a critical financial landscape for the country.
Minister of Budget and Economic Planning, Abubakar Bagudu, highlighted the budget’s key allocations, stressing the imperative of the N605bn earmarked for national defense to sustain security gains and expedite further progress in the sector.
He emphasized, “N605bn for national defense and security is to sustain the gains made in security. It will accelerate the gains in that sector as the funds will be made available to security agencies before the year runs out.”
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A chunk of the budget, totaling N1.01tn, is allocated for recurrent expenditure, while N1.17tn is pegged for capital expenditure. However, with the supplementary budget, these figures swell to N7.76tn for non-debt recurrent expenditure and N4.53tn for capital expenditure, totaling N19.81tn for 2023.
In a concerning trend, the government’s revenue is struggling to match its expenses. The Accountant General of the Federation, Mrs. Oluwatoyin Madein, pointed out the imbalance, stating, “The expenditure is on the rise, and the strategies to increase revenue must be worked upon continuously to ensure that we are having funds to meet the expectations of Nigerians.”
The revenue crunch is a long-standing challenge for Nigeria, exacerbated by falling oil production and the country’s struggle to diversify its economy. The former Minister of Finance, Budget, and National Planning, Zainab Ahmed summarized the issue, saying, “Revenue generation remains the major fiscal constraint of the federation.”
The looming fiscal deficit, predicted at N9.01tn before the supplementary budget, coupled with rising expenditures, underlines the urgent need for effective strategies to boost revenue.
As the country grapples with this financial conundrum, addressing the revenue shortfall remains a crucial priority to maintain the government’s ability to meet its financial obligations.
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