New wage, others to gulp over N7trn in 2023
The Federal Government’s recently agreed wage with the Labour Congress, salaries to federal workers, and other non-debt recurrent costs are expected to gulp N7.76tn in 2023.
This is based on data from the initial 2023 budget and recently signed 2023 supplementary budget. The country’s central government recently approved a N2.18tn budget to augment new expenses, including an agreed wage reward for workers due to the removal of fuel subsidy.
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When the budget was announced, the Minister of Budget and Economic Planning, Abubakar Bagudu, noted that N605bn has been earmarked for national defense, while N210bn will cover the payment of wage awards.
He said, “N605bn for national defense and security is to sustain the gains made in security. It will accelerate the gains in that sector as the funds will be made available to security agencies before the year runs out.
“Equally a sum of N300bn was provided to repair bridges, including Eko and Third Mainland bridges, as well as construction, rehabilitation, and maintenance of many roads nationwide before the return of the rainy season.
“The sum of N210bn was provided for the payment of wage Awards. In negotiation with the Nigeria Labour Congress, the federal government agreed to pay N35,000 each to about 1.5 million employees of the Federal Government and that covers September, October, November, and December 2023.”
According to appropriation details from the budget office, N1.01tn of the total budget is for recurrent expenditure with N1.17tn pegged for capital expenditure. The supplementary budget is set to increase the total non-debt recurrent expenditure of the Federal Government to N7.76tn and capital expenditure to N4.53tn.
The supplementary budget is also set to increase the total budget for 2023 to N19.81tn. When debt servicing is removed, the budget totals N13.26tn. Of the N7.76tn budgeted for recurrent expenditure, at least N4.31tn (55.54 per cent) will be spent on salaries. So far, the government has spent N978.10bn on salaries in the first three months of 2023, based on the 2023 Q1 implementation report.
It has spent N1.24tn on non-debt recurrent expenditure and N175.45bn on capital expenditure. So far, the government has borrowed N2.30tn to finance its budget, and before signing its supplementary budget, it predicted that fiscal deficit for the year would be N9.01tn.
Recently, the Federal Government decried rising expenditure costs considering its falling revenues. The Accountant General of the Federation, Mrs Oluwatoyin Madein, noted on Wednesday that revenue generation and its collection is dwindling in comparison with expenditure for the government.
She said, “Inasmuch as the revenue is in this position, the expenditure too has not also been helping matters, especially with the current economic reality where the prices of things are going up regularly.
“The expenditure too is on the rise and definitely the strategies to increase revenue must be worked upon on a continuous basis to ensure that we are having funds to meet the expectations of Nigerians.”
Nigeria’s revenue crisis is well documented due to falling oil production and inability to effectively diversify the economy.
The former Minister of Finance, Budget, and National Planning, Zainab Ahmed, summarised it thus, “Revenue generation remains the major fiscal constraint of the federation.
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