The President, Major General Muhammadu Buhari (retd.), on Friday, presented the 2023 appropriation bill.
Buhari presented the 2023 appropriation bill to a joint session of the National Assembly in Abuja.
Read the President’s full speech below:
Explaining further, he said the government will spend N20.15tn for the 2023 fiscal year.
I am very pleased to be here today to present the 2023 Budget Proposals at this Joint Session of the National Assembly. This is the last time I will be laying the budget of the Federal Government of Nigeria before the National Assembly.
2. Mr. President; Mr. Speaker: As I address this Joint Session on the Budget for the last time, let me highlight some of the progress that we have made in last seven and half years, in just two important areas of Critical Infrastructure and Good Governance.
3. We have made transformational investments in Infrastructure, notably:
a. Establishing the Infrastructure Corporation of Nigeria (‘InfraCorp’), in 2021, seed capital of N1 trillion from the Central Bank of Nigeria (‘CBN’), the Nigeria Sovereign Investment Authority (‘NSIA’) and the Africa Finance Corporation (‘AFC’);
b. Leveraging finance through the NSIA into the Presidential Infrastructure Development Fund (‘PIDF’) to facilitate the accelerated completion of the Second Niger Bridge, Lagos-Ibadan Expressway and Abuja-Kano Road;
c. Through the Road Infrastructure Tax Credit Scheme pursuant to Executive Order #7 of 2019, incentivised responsible companies to invest billions of Naira in constructing over 1,500km critical roads in key economic corridors. Under this Scheme, the Dangote Group has substantially completed the Reconstruction of 34km Apapa-Oworonshoki-Ojota Expressway and the 43km Obajana-Kabba Road. Similarly, Nigeria LNG Limited is on track to complete the 38km Bodo-Bonny Road and Bridges Project by the end of 2023;
d. Under our Sukuk Bonds scheme, since 2017, over N600 billion has been raised and invested in 941km for over 40 critical road projects nationwide, complement the Ministry of Works and Housing’s Highway Development and Management Initiative and other interventions;
e. Investing significantly to restore our national railways, completing and commissioning the 156km Lagos-Ibadan Standard Gauge Rail (and its 8.72km extension to Lagos Port); the 186km Abuja-Kaduna Standard Gauge Rail; and 327km Itakpe-Warri Standard Gauge Rail. These completed projects complement our ongoing investments in Light Rail, Narrow and Standard Gauge Rail, Ancillary Facilities Yards, Wagon Assembly Plants, E-Ticketing infrastructure as well as the training and development of our rail engineers and other workers;
f. We have completed New Airport Terminals at Lagos, Abuja, Kano and Port Harcourt, and reconstructed the Abuja Airport Runway in its first overhaul since its construction in the early 1980s.
g. Other investments in airports safety facilities, aeronautical meteorological services delivery complement ongoing development of seaports and ancillary infrastructure at the Lekki Deep Sea Port, Bonny Deep Sea Port, Onitsha River Port, as well as the Kaduna, Kano and Katsina Inland Dry Ports to create a truly multimodal transport system;
h. We have transformed Nigeria’s challenging power sector, through bespoke interventions such as the Siemens Power Program, with the German government under which over 2 billion US Dollars will be invested in the Transmission Grid.
i. We have leveraged over billions of US dollars in concessional and other funds from our partners at the World Bank, International Finance Corporation, African Development Bank, JICA as well as through the Central Bank of Nigeria, working with the Finance Ministry, to support the power sector reforms.
j. The Central Bank has also been impactful in its interventions to roll out over a million meters to on-grid consumers, creating much needed jobs in assembly and installation. Our financing interventions have recently been complemented with the takeover of four electricity distribution companies and the constitution of the Board of the Nigeria Electricity Liability Management Company.
k. On the generation side, we have made significant investments in and incremental 4,000MW of power generating assets, including Zungeru Hydro, Kashimbila Hydro, Afam III Fast Power, Kudenda Kaduna Power Plant, the Okpai Phase 2 Plant, the Dangote Refinery Power Plant, and others.
l. Our generation efforts are making the transition from a reliance on oil and diesel, to gas as a transitional fuel, as well as environmentally friendly solar and hydro sources. Under the Energising Education Programme, we have commissioned solar and gas power solutions at Federal Universities and Teaching Hospitals at Kano, Ebonyi, Bauchi and Delta States. Similarly, our Energising Economies Programme has taken clean, sustainable power solutions to the Sabon-Gari Market in Kano, Ariaria Market in Aba, and Sura Shopping Complex in Lagos.
4. In terms of Good Governance, one significant challenge this Administration met at our inception was the inability of successive Governments to institutionalise reforms to ensure their sustainability. We inherited an archaic set of corporate, banking and capital markets laws; draft but unenacted Bills to reform the critical petroleum sector; an unimplemented Oronsaye White Paper to reform our civil service, amongst others.
5. I was therefore committed, at the onset of this Administration’s Good Governance and Fighting Corruption Reforms, to focus on the much-neglected area of law reform, to bequeath a better legacy to the succeeding Administration, than the one we met. Our innovative, encompassing and historically significant legislative interventions include:
a. Critical corporate and financial laws to enhance our countries’ global competitiveness, including the repeal and re-enactment of Companies and Allied Matters Act (‘CAMA’) 2020 – the first comprehensive reform since 1990; enacting the Federal Competition and Consumer Protection Commission (FCCPC) Bill, the first legislation in Nigeria’s history focused on curbing anti-competition practices; establishing the Federal Competition and Consumer Protection Commission; re-pealing and re-enacting the Banks and Other Financial Institutions Act (BOFIA) 2020; enacting the Asset Management Corporation of Nigeria, AMCON (Amendment) Acts of 2019 and 2021; enacting the Credit Reporting Act (CRA) 2017 and Secured Transactions in Movable Assets Act (STMAA) 2017, to mention our major legislative interventions;
b. Fundamental anti-corruption, anti-money laundering and financial intelligence laws, such as the Nigeria Police Act, 2020 (being the first comprehensive reform of Police legislation since the Police Act of 1943); the Nigerian Financial Intelligence Unit Act 2017 (which resolved the longstanding impediments to Nigeria’s full participation in the global efforts to combat illicit financing of terrorism and crime under the auspices of the global Egmont Group); the Money Laundering (Prevention and Prohibition) Act, 2022; the Terrorism (Prevention and Prohibition) Act 2022, Proceeds of Crime (Recovery and Management) Act, 2022; Mutual Assistance in Criminal Matters Act, 2019; Nigerian Correctional Services Act, 2019; Suppression of Piracy and other Maritime Offences Act, 2019; amongst others.
c. Historic reforms to our Constitutional and other public laws, including the first ever amendments to the Constitution of the Federal Republic of Nigeria to support the engagement of young persons in our politics by passing Not Too Young to Run legislation, as well as to improve the funding and independence of States’ Legislatures and Judiciaries; enacting overdue reforms through the Electoral Act, 2022;
d. Finally enacting into law the Petroleum Industry Act, 2021 after close to two decades of drafting, debates and delays – leading to the commercialization of NNPC Limited, and other much needed reforms to our energy sector. This important law also complements other landmark legislations such as the Deep Offshore and Inland Basin Production Sharing Contracts Act, 1993 (Amendment) Act, 2019, to increase oil and gas revenues accruing to the Federation;
e. Enacting annual Finance Acts of 2019, 2020 and 2021 to support our annual Budgets and respond to emerging tax, fiscal and economic issues, including:
I. reducing headline corporate tax rates for Small and Medium-Sized Enterprises;
II. reforming archaic tax legislation in line with global best practices to combat Base Erosion and Transfer Pricing;
III. reforming the taxation of securities lending and real estate investment trusts to spur increased investments on our capital markets;
IV. empowering the Federal Inland Revenue Service and the Nigeria Customs Service to optimize their use of technology to more efficiently collect taxes and levies; and
V. increasing VAT revenues predominantly to support our States and Local Governments’ precious finances during and after the impact of the COVID-19 Pandemic on the economy;
f. Furthermore, we have issued eleven Presidential Executive Orders on a range of important issues, including the Promotion of Transparency and Efficiency in the Business Environment, 2017;
I. Promoting Local Procurement by Government Agencies, 2017;
II. the Submission of Annual Budgetary Estimates by all Statutory and non-Statutory Agencies, including Incorporated Companies wholly owned by the Federal Government of Nigeria, 2017;
III. the Voluntary Assets and Income Declaration Scheme, 2017;
IV. Planning and Execution of Projects, Promotion of Nigerian Content in Contracts, Science, Engineering and Technology, 2018;
V. the Voluntary Offshore Assets Regularization Scheme (VOARS), 2018;
VI. Open Defecation and enhanced sanitation, 2019;
VII. the innovative Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, 2019; and
VIII. the National Public Buildings Maintenance, 2022.
6. We could not have made these historical achievements without the exceptional partnership this Administration has had with the Leadership, and Members of the National Assembly. So may I pause here, to once again, thank the Senate and the House of Representatives for your engagement, support and contribution to these successes, which history will remember us all favourably for.
RECENT ECONOMIC DEVELOPMENTS
7. The 2023 Budget was prepared amidst a very challenging world economy that is weakened by the lingering effects of the COVID-19 pandemic, high inflation, high crude oil prices resulting in huge cost of PMS Subsidy and negative spill over effects of the Russia-Ukraine war.
8. Many economies around the world are currently contending with fiscal instability, slow growth, food crisis, and high interest rates. Like many other countries, our economy faces headwinds from low revenues, high inflation, exchange rate depreciation and insecurity.
9. However, Nigeria’s real Gross Domestic Product grew by 3.54 percent in the second quarter of 2022, marking the seventh consecutive quarter of growth. Our interventionist and reflationary measures have been very effective and impactful. We must however continue to work towards achieving much higher levels of growth, especially given our high population growth rate, so that the average Nigerian can truly feel the impact of planned economic growth
10. Distinguished Senators and Honourable Members, despite continuing efforts, unemployment, underemployment, and poverty rates remain high. We are currently implementing several skills development programmes and work opportunity programmes to enhance the employability of our youths and tackle the troubling level of youth unemployment.
11. While it is evident that our economy still faces significant challenges, what could have happened without the implementation of some of the measure we introduced, would have been much worse for the country.
REVIEW OF 2022 BUDGET IMPLEMENTATION
12. Distinguished and Honourable Members of the National Assembly, the implementation of the 2022 ‘Budget of Economic Growth and Sustainability commenced on the first day of the year. It was, however, necessary to forward an amended budget proposal to address some exigent issues, especially the significant increase in fuel subsidy.
13. The amended 2022 Budget was based on a benchmark oil price of 73 US Dollars per barrel, oil production of 1.60 million barrels per day, and exchange rate of 410.15 Naira to US Dollar.
14. As at 31st July 2022, Federal Government’s retained revenues was 3.66 trillion Naira, excluding the revenue of Government-Owned Enterprises. Thus, revenue collection was only 63 percent of our target, largely due to the underperformance of oil and gas revenue sources.
15. Despite higher oil prices in 2022, oil revenue was below target due to significant oil production shortfalls and high petrol subsidy cost resulting from the significant rise in Crude prices which ultimately increased PMS prices worldwide.
16. Oil output stood at an average of 1.30 million barrels per day as at June 2022, while the sum of 1.59 trillion Naira was spent on fuel subsidy between January and June 2022. The NNPC, working in collaboration with security and other relevant agencies, is putting in place additional measures to curb the incidence of pipeline vandalism and crude oil theft in order to meet our crude oil production quota.
17. On the expenditure side, the sum of 8.29 trillion Naira had been spent by July 31 2022 out of the total appropriation of N17.32 trillion. Despite our revenue challenges, we have consistently met our debt service commitments. Staff salaries and statutory transfers have also been paid as and when due.
18. Total non-debt recurrent expenditure in January to July 2002 was 3.24 trillion Naira, of which 2.87 trillion Naira was for Salaries, Pensions and Overheads. A total of 3.09 trillion Naira was spent on debt service obligations during the period.
19. Furthermore, about 1.48 trillion Naira had been released to MDAs for capital expenditure as at the end of July 2022. I am pleased to inform you that we expect to fund MDAs’ capital budget fully by the end of the fiscal year 2022.
20. To further address structural problems in the economy and drive growth, capital releases thus far have been prioritised in favour of critical ongoing projects in the power, roads, rail, agriculture, as well as health and education sectors.
THE PUNCH
