Budget 2023: Experts foresee lull in economy

• Published date: 14 January 2023
• Publication title: Nigeria - The Nation

The 2023 Appropriation Bill signed into law by President Muhammadu Buhari recently has led to a change of reactions from experts from all walks of live who have argued that the fiscal policy that is expected to drive economic activities may not bode well for the economy on the long run, reports Ibrahim Apekhade Yusuf.

WHEN President Muhammadu Buhari signed the 2023 Appropriation Bill into law penultimate Friday, not many people heaved a sigh of relief. The reason for this is not far to seek: in the view of analysts, the fiscal policy was short on hope but high on nemesis, especially for the incoming government, who analyst argued may suffer the fallouts.

X-ray of 2023 budget

Specifically, while Mr. President proposed an annual budget of N20.51 trillion for 2023, (a 19.8 per cent increase over the N17.13 trillion approved for 2022, including the supplementary budget), he ended up signing a 2023 Appropriation Act of N21.83 trillion. The president however deferred the signing of the Finance Bill, which is still being reviewed because of some contentious contents, especially parts that conflict with the fiscal term of the Petroleum Industry Act (PIA).

The (proposed) Finance Bill is said to have taken away all concessions given by the PIA; for instance, it dis-incentivises investments in the petroleum sector, leading to massive protest by the international oil companies (IOCs), especially in the area of gas flaring-a development that in part, accounts for the exodus of some IOCs from Nigeria in recent times. Yet, the Finance Bill forms the backdrop that spells out the sources of funding for the annual budget already signed into law. How soon the 'review' of the Finance Bill will be completed is a matter for conjecture given the several loose ends in the Budget itself that urgently need to be tied up.

In reality, at every stage of the 2023 Budget signing event, Mr. President expressed his hesitation to assent to the Appropriation Bill, arguing for instance, that his decision to sign the 2023 appropriation bill into law, as passed by the National Assembly, was to enable its implementation commence without delay, 'considering the imminent transition process to another democratically elected government.'

With this product of 'exigency' (the budget) in place, the President expressed the hope that 'the National Assembly would cooperate with the executive' in the much work that still needed to be done on the budget. He said 'We have examined the changes made by the National Assembly to the 2023 executive budget proposal', adding that 'the amended fiscal framework for 2023, as approved by the National Assembly, shows additional revenues of N765.79 billion, and an unfunded deficit of N553.46 billion.

'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...