Reps Okay N8.437trn Borrowing, $73 Crude Oil Benchmark for 2023

By Aduragbemi Omiyale

The House of Representatives has said the federal government can borrow up to N8.437 trillion from local and foreign sources to finance the 2023 budget.

The parliament approved these and others on Thursday while deliberating on the 2023-2025 Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP).

Its Committee on Finance, which looked into the documents from the executive arm of government, submitted them at the plenary yesterday.

The House expressed concerns that the federal government failed to explain how it plans to borrow about N9.32 trillion in the fiscal year.

In the end, the green chamber of the National Assembly slashed the new borrowings to N8.437 trillion, “subject to the approval of the provision of details of the borrowing plan by the National Assembly.”

It, however, advised the government to reduce the significant proposed tax waiver for corporate organisations, saying it would increase the budget deficit.

“High waiver and tax exemptions for corporate entities have contributed significantly to the prevalent budget deficit,” the lawmakers said during the plenary presided over by the Deputy Speaker, Mr Ahmed Idris Wase.

Also, the House approved the daily crude oil production of 1.69 million barrels per day for next year, 1.83mbpd for 2024 and 1.83mbpd for 2025, with the crude oil benchmark fixed at $73 per barrel due to continuous increase in the oil price in the global oil market and other peculiar situations such as continuous invasion of Ukraine by Russia.

In addition, the Reps approved the exchange rate of N437.57/$1 in the MTEF/FSP, 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.

Furthermore, the lawmakers approved the projected gross domestic product (GDP) growth rate of 3.75 per cent for next year and the 17.16 per cent inflation rate.

The cost of petroleum subsidy was capped at N1.7 trillion, while the fiscal deficit of 11.3 trillion was pruned to N10.563 trillion from the N737.31 billion saved from the subsidy.

A few days ago, Business Post reported that President Muhammadu Buhari is expected to present the 2023 budget estimates to a joint sitting of the National Assembly on Friday.