2023-2025 MTEF/FSP: 11.3 trillion deficit poses fresh threat to Nigeria’s economy
Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP) for the 2023- 2025 which received the Senate’s attention through its Committee on Finance chaired by Senator Solomon Adeola Olamilekan last week, laid bare not prospects, but challenges that would confront Nigeria in the 2023 fiscal year.
The MTEF/FSP is a policy document that speaks to the budgetary needs of the individual Ministries, Departments and Agencies of government, thus, it’s a preview of the annual appropriation to be soon laid before the joint session of the upper and lower legislative houses.
Traditionally, the presentation of the annual budget precedes the passage of MTEF/FSP at both Chambers. Though President Muhammadu Buhari was expected to present the 2023 budget in the first week of October, 2022, but for lack of space due to the ongoing N30 billion National Assembly Complex renovation, the budget documents would separately be submitted to the upper and lower legislative Chambers.
The separate submission, which President Buhari will not be physically present, was confirmed on Tuesday by the Speaker of the House of Representatives, Hon. Femi Gbajabiamila after the resumption of lawmakers from a two-month annual recess.
The MTEF/FSP public hearing afforded the Finance Committees of lower and upper Chambers to interrogate Chief Executives of the agencies of government on the next year proposal submitted to the Budget Office of Federation before they were made available to lawmakers for legislative debate.
The week-long MTEF/FSP public debate in the Senate, DAILY POST, observed, unearthed gross under performance of some Ministries, Departments and Agencies of government, even after over 70% 2022 budgetary releases to them by the Federal Ministry of Finance. The gross under performance, particularly the revenue generating agencies, in the reasoning of Senate Committee on Finance members would put the budget deficit of N11.03 trillion at risk. The total budget for 2023, which was sighted penultimate week by DAILY POST in Abuja, stood at N19.76 trillion, out of which the Federal government would have to source for funds to finance about 60% of the total budget.
Chairman of the Committee, Senator Solomon Adeola Olamilekan after listening to presentation by some revenue generating agencies which could not meet their annual target, threatened that the National Assembly may give effect to ‘the Stephen Orosonye Report’ which recommended the merger of over 400 parastatals of government to save cost.
He urged the heads of government agencies to wake up to their responsibilities, vowing that funds must be raised to fund the deficit. He stressed the readiness of the parliament to amend the relevant provisions of the Finance Act 2021 as amended to assist revenue generating agencies of government in generating revenues.
The lawmaker insisted that the FG cannot go cap in hand to borrow, while he insisted that heads of revenue generating agencies must be creative enough to generate funds to cater for the deficit.
He said: “Heads of revenue generating agencies should look for other sources of revenue generation to reduce borrowing and ultimately the deficit in the nation’s budget.
“Any agency that fails to meet its targeted revenue generation has outgrown its usefulness and will be reduced to a department under the relevant Ministry.”
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed had expressed concern on the budget deficit, citing the plethora of challenges confronting the nation and the inability of government agencies to generate funds.
The Minister disclosed that over 70% of the 2022 budget has been released to various government agencies, a feat she said was in line with President Muhammadu Buhari’s determination to properly fund agencies of government.
A member of the Committee and Senator representing Niger East Senatorial district, Sani Musa, pointed out that the challenges facing the oil and gas industry in Nigeria, would pose a serious handicap to the government in view of the fact Nigeria runs a monolithic economy.
Musa added that the government must begin to look away from oil and gas to other things as an alternative means of funding its 2023 budget.
“The budget of this country has been in deficit and the only thing we can do is to amend so many things in the Finance Act,” he said.
Meanwhile, the full scale oil theft in the Niger Delta, which has crippled Nigeria’s ability to meet its 2.2 million barrels of crude oil OPEC quarter, was a source of concern to all stakeholders.