The 2023 budget proposal of N21.83 trillion and the 2022 supplementary appropriations bill were both signed into law by President Muhammadu Buhari on Tuesday. It is his administration’s eighth and last budget.
In the presence of Vice President Yemi Osinbajo, Senate President Ahmed Lawan, Speaker of the House of Representatives Femi Gbajabiamila, and other Federal Executive Council (FEC) members, Buhari signed the 2023 budget at the Council Chambers of the Presidential Villa in Abuja.
Buhari praised the National Assembly’s almost smooth interaction with the executive branch but asked the body to change its mind about his plan to securitize the Federal Government’s outstanding N22.7 trillion Ways and Means balance at the Central Bank of Nigeria (CBN).
He cautioned that failing to approve the securitization will result in a 40-year payback timeframe for the securitized debt and increased interest costs to the government of nearly N1.8 trillion in 2023.
Just one week has passed since the Senate rejected Buhari’s proposal to restructure the N22.7 trillion in Ways and Means advances.
The President stated at the budget signing that the overall spending amount of N21.83 trillion represents a rise of N1.32 trillion over the first executive request for a total expenditure of N20.51 trillion.
He said that the 2022 Supplementary Appropriations Act would provide his administration the tools it needed to address the damage that the recent countrywide floods had done to the agriculture and infrastructure sectors.
He said that, as is customary, Zainab Ahmed, the Minister of Finance, Budget, and National Planning, will give more details of the approved budget and the supporting 2022 Finance Act. Buhari explained, ‘We have examined the changes made by the National Assembly to the 2023 Executive Budget proposal.
‘’The amended fiscal framework for 2023 as approved by the National Assembly shows additional revenues of N765.79bn, and an unfunded deficit of N553.46bn.
“It is clear that the National Assembly and the executive need to capture some of the proposed additional revenue sources in the fiscal framework. This must be rectified.
“I have also noted that the National Assembly introduced new projects into the 2023 budget proposal for which it has appropriated N770.72 billion. The National Assembly also increased the provisions made by Ministries, Departments and Agencies by N58.55 billion.’’
According to the President, his decision to sign the 2023 Appropriation Bill into law as passed by the National Assembly is to enable swift implementation considering the imminent transition process to another democratically elected government.
However, he directed the finance minister to engage with the legislature to revisit some of the changes made to the executive budget proposal, expressing the hope that the National Assembly would cooperate with the executive arm of government in this regard.
While urging the National Assembly to reconsider its position on his proposal to securitize the FG’s outstanding Ways and Means balance at the CBN, Buhari said, ‘’As I stated, the balance has accumulated over several years and represents funding provided by the CBN as lender of last resort to the government to enable it to meet obligations to lenders, as well as cover budgetary shortfalls in projected revenues and/or borrowings.
“I have no intention to fetter the right of the National Assembly to interrogate the composition of this balance, which can still be done even after granting the requested approval.
“Failure to grant the securitization approval will, however, cost the government about N1.8tn in additional interest in 2023 given the differential between the applicable interest rates which is currently MPR plus three per cent and the negotiated interest rate of nine per cent and a 40year repayment period on the securitised debt of the Ways and Means,” said the President.