As the two chambers of the National Assembly prepare to receive the proposed budget of the 2023 fiscal year from the President next Month, gaps in the performance of the 2022 budget are being laid bare by experts.
Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed had disclosed that an aggregate expenditure of N19.76t for the 2023 fiscal year is being planned.
Budget deficit for the 2023 fiscal year might be between N11.30t and N12.4t, depending on the choice that would be made by the Federal Government on the issue of fuel subsidy payment.
However, experts have continued to fault the performance of the 2022 budget. The issue of debt service to revenue is of the critical factors identified as being responsible for the poor performance of the 2022 budget.
BudgIT, a civic-tech organisation leading in advocacy for transparency and accountability in Nigeria’s public financial management, said the debt service-to-revenue ratio reached alarming levels within the first four months of 2022.
Reports have it that the country’s current debt service, which stood at N1.94t from January to April 2022, is over 100 per cent of the nation’s revenue, which was N1.64t, within the same period.
In 2022’s first quarter, Nigeria’s public debt rose to N41.6t from N39.56t recorded at the end of December 2021, putting enormous pressure on debt servicing. Budget performance reports as studied by The Guardian showed that gross oil and gas revenue for full year 2022 was projected at N9.37t but as at April 30, 2022, only N1.23t was realised out of the prorata projection of N3.12t, representing a mere 39 per cent performance.
The reports showed that oil revenue underperformed due to significant oil production shortfalls such as shut-ins resulting from pipeline vandalism and crude oil theft as well as high petrol subsidy cost due to higher landing costs of imported products.
Non-oil taxes also fell far below targets marginally, with average performance of 92.6 per cent. Experts say budget performance in the last one year has been nothing but sub-optimal.
Their position was informed after x-raying two federal ministries, which included the Ministry of Industry, trade and Investments as well as its counterpart- Ministry of Finance, Budget And National Planning respectively.
In his submission, a Professor of Economics, at the Olabisi Onabaqnjo University, Prof. Sheriffdeen Tella said the trade and industry sector had not performed better than other sectors, more also that the oil subsector, which normally dominate trade, was unable to perform despite the opportunity, as Nigeria was unable to meet up with the Organisation of Petroleum Exporting Countries (OPEC) crude oil allocations. Tella said the non-oil sector too couldn’t cover the gap due to slow growth the world dem.