Reps Approve MTEF/FSP, Disagree With Senate On N1.7trn Subsidy

House of Representatives yesterday disagreed with the Senate on the value for fuel subsidy in the proposed 2023 appropriation bill which will be presented to a joint session of the National Assembly by President Muhammadu Buhari today.

To this end, the House reduced the proposed fiscal deficit of N11.3 trillion to N10.5 trillion for the next financial year.

The Senate had on Wednesday rejected a report by its Committee on Finance to reduce N3.6 trillion proposed for subsidy in the 2023 budget by the executive to N1.7trillion.

But the House sustained the reduction as recommended by its Committee on Finance. The adjustment followed the approval of the recommendations of the report of the House Committee on Finance on the 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) at plenary yesterday.

According to the report presented by deputy chairman of the committee, Abdullahi Saidu, the House approved N9.3 trillion revenue as a result of the increase in the benchmark on oil subsidy for the year in review.

This is above the federal government projected total revenue of N8.46 trillion captured in the MTEF/FSP 2023-2025 presentation by Zainab Ahmed, minister of finance, budget and national planning to the committee earlier.

The House also approved the recommendations of the daily crude oil production of 1.69mbpd, 1.83mbpd, and 1.83mbpd for 2021, 2022 and 2023 respectively and the oil price of $73 per barrel of crude oil due to continuous increases in the oil price in the global oil market and other peculiar situations such as continuous invasion of Ukraine by Russia as that will result in saving of N155 billion.

The House further approved the exchange rate of N437.57 as contained in the MTEF FSP document with continuous engagement between the Central Bank of Nigeria and the Federal Ministry of Finance, Budget and National Planning with the view of bridging the gap between the official market and parallel market.

It equally approved: “the projected GDP growth rate of 3.75% be approved; the projected Inflation rate of 17.16%; projected New Borrowings of N8.437 trillion (including Foreign and domestic Borrowing), subject to the approval of the provision of details of the borrowing plan by the National Assembly; fiscal deficit of N10.563 trillion (including GOEs).

“Statutory transfers, totalling, N722.11 billion; Debt Service estimate of N6.31 trillion; sinking Fund to the tune of N247.7 billion; Pension, Gratuities & Retirees Benefits of N827.8 billion.

“Aggregate FGN Expenditure of N19.76 trillion; made up of Total Recurrent (Non-debt) of N8.53 trillion; Personnel Costs (MDAs) of N827.8 billion; Capital expenditure (exclusive of Transfers) N3.96 trillion; Special Intervention (Recurrent) amounting to N350 billion; and Special intervention (Capital) of N7 billion.”

The House also approved the committee’s recommendation that the cost of petroleum subsidy be capped at N1.7 trillion and accordingly, all relevant agencies of the governments will be required to take necessary action to keep the petroleum subsidy cost to the government within the N1.7 trillion ceiling in 2023.

By this action, the committee said, the sum of N737,306, 443,151 will be saved and that should be used to reduce the fiscal deficit of N11.3 trillion of the government as contained in the MTEF/FSP.

Other approvals given by the House are the committee’s recommendations that: “a significant reduction in both waivers and tax exemptions of corporate organizations to cushion the effect of the budget deficit.

“All revenue-generating agencies should reconcile their accounts with the Fiscal Responsibility Commission and the Office of the Accountant General of the Federation (OAGF), the report of which should be submitted to the Committee of Finance for consideration and approval.

“There should be a common electronic platform for reconciliations amongst the government MDAs, OAGF and Fiscal Responsibility Commission for effective monitoring and remittances; there should be strict compliance with the Constitution, Fiscal Responsibility Act and other extant laws by all agencies of the Government with regards to revenue remittances.

“The relevant oversight committees of the National Assembly are at liberty to remove recycled projects in their budget proposal during the Committees’ budget defence; mainstreaming of annual GOEs’ budgets into the Federal Government budget processes to ensure the same level of scrutiny, procurement and monitoring exercise.