Highlights of Nigeria’s 2023 Budget

The end of a year and the start of another is marked by three major events: Christmas, New Year, and Budget Reading. Like the passing of the moon and the rising of the sun, the third event marks the beginning of a new economic year.

President Muhammadu Buhari signed the 2023 Federal Budget tagged “Budget of Fiscal Sustainability and Transition” in January 2023. It was his eighth and final budget for the current administration.

Here are some highlights: 

  • Debt service cost of about N6 trillion represents about 31% of the Budget. This underscores the need for urgent action to address revenue underperformance and expenditure efficiency. 
  • Total revenue is estimated at N10.49 trillion.
  • Aggregate expenditure, inclusive of (Gross Operating Expense) GOEs and project-tied Loans), is projected to be N21.83 trillion, 20% higher than the amended 2022 Budget.
  • Economic benchmarks are Oil price benchmarked at 70 US dollars per barrel, Daily Oil production estimated at 1.69 million barrels per day, Exchange rate benchmarked at N435.57 per US Dollar, (Gross Domestic Product) GDP projected growth is 3.75%, while Inflation is rated at 17.16%
  • The overall budget deficit is N11.34 trillion representing 5.03% of GDP which is to be financed mainly by borrowings made up of domestic sources of N7.04 trillion, and foreign sources of N1.76 trillion.

Provisions were made in the budget to cater for all facets of government operations but defence, education and health were top on the list. 

Defence and internal security continue to be accorded top priority with the highest vote of N2.74 trillion (13 per cent of the total budget).

Vote for Education is N2.05 trillion (10 per cent of the budget) with a provision of 470.0 billion for revitalisation and salary enhancements in the tertiary institutions. 

The Health Sector got N1.58 trillion or eight per cent with the intent to focus attention on equipping existing hospitals and rehabilitating infrastructure. Emphasis will also be on local production of basic medicines/vaccines.

As has been previously announced, a provision was made in the budget for fuel subsidy in the first 6 months, which suggests we should prepare for fuel subsidy removal by mid-2023. 

As the economy moves into high gear after the signing of the budget by the President, it is expected that its effects will soon be felt on all strata of the society.

As 2023 is an election year, there will be a change of guard halfway into the implementation of this budget. It will be advisable to maintain focus on the revenue side of the budget with greater attention given to revenue generation through diversification, export promotion and sustenance of non-oil revenue.

To the people on the streets, these figures represent a peep into what the year will bring economically. 

How it will affect businesses, SMEs and the average Nigerian- time will tell. We at FirstBank will continue to give our customers information on how to navigate the economy to their advantage in 2023.

Visit www.firstbanknigeria.com and check out our FirstBank webinar titled: “Nigeria Economic Outlook 2023: A look ahead” held on Friday, 23 January 2023. 
It gives a sneak peek into the economic outlook for 2023: 

Latest Blogs