· Nigeria’s budget deficit is expected to cross N12.42 trillion if it retains petroleum subsidy for the entire 2023 fiscal cycle.
Nigeria’s budget deficit is expected to cross N12.42 trillion if it retains petroleum subsidy for the entire 2023 fiscal cycle. This is far more than the estimated deficit of N7.35 trillion in 2022. It will represent 196 percent of total revenue or 5.50 per cent of the estimated GDP. As per the current law, the deficit must be kept below 3 per cent of the GDP. However, the President has been empowered to cross the threshold with the approval of the National Assembly.
The Minister of Finance and National Planning, Zainab Ahmed revealed that the Federal Government budget will have to spend N6.72 trillion on subsidies and will have to manage the deficit by borrowing over N11 trillion and also selling national assets to finance the budget deficit in 2023.Mrs. Ahmed disclosed this before the House of Representatives Committee on Finance while defending the 2023-2025 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP). Mrs Ahmed recommended an alternative of keeping the subsidy till June 2023. Under this option, the deficit will be around N11.30 trillion, which is 5.01 per cent of the estimated GDP.
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