- Presenting his final Budget on October 7th, Nigeria’s president Muhammadu Buhari has confirmed plans to drop the costly petrol subsidy and sending signals of deep revenue shortfalls.
Presenting his final Budget on October 7th, Nigeria’s president Muhammadu Buhari has confirmed plans to drop the costly petrol subsidy and sending signals of deep revenue shortfalls.
Addressing the joint session of the National Assembly in Abuja, Buhari stated that the current fiscal impact of the subsidy made it unsustainable. The bulk of Nigeria’s petrol needs is met through costly imports and through subsidy the prices are kept low for the consumers. The ending of the subsidy will add to the woes of Nigeria’s common man who is already in the grip of inflationary pressures unleashed by the Ukraine war and the Pandemic.
The record 20.5 trillion nairas ($47.3 billion) proposed expenditure for 2023 is expected to be approved and take effect in January 2023. The 2023 budget is 19% higher than the 2022 government expenditure giving high priority to defence and internal security. About 5.3 trillion nairas ($12.2 billion), or 26% of the proposed budget, is allocated for capital expenditure to boost the nation’s key infrastructure.
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Nigeria’s economy he said is projected to grow 3.7 per cent in 2023, slightly above the 3.55 percent rate expected this year. The budget deficit is estimated to be 10.78 trillion nairas, while oil revenue is projected at 1.92 trillion nairas. Non-oil taxes are estimated to contribute 2.43 trillion nairas. Assuming an oil price of $70 per barrel and an exchange rate of 435.57 nairas to the dollar, Nigeria’s crude oil production is expected to be 1.69 million barrels per day (bpd).
