Senate on Wednesday passed for a second reading the 2023 Appropriation Bill which was presented to the National Assembly by President Muhammadu Buhari last Friday.
The bill seek to authorise the issue out of the consolidated revenue fund of the federation the total sum of 20,507,942,180,704 for the year ending on 31st December, 2023.
After the bill passed for a second reading following a debate on its general principles, the Senate suspended its plenary until 15th November, 2022 to enable its Committees embark on budget defence with relevant Ministries, Departments and Agencies (MDAs).
Leading the debate on the bill, the Senate Leader, Abdullahi Gobir said based on the budget fiscal assumptions and parameters, the current expenditure which is constituting over 43% of the total budget outlay is still too high.
According to Gobir, the current expenditure contained personnel costs, pensions, benefits and over heads that are expenses that are necessary for stabilising the government and the polity.
He said, “it is expected that the total operations of the Federal Government to result in a deficit of N10.78 trillion Naira. This represents 4.78% of estimated GDP, above the 3% threshold set by the Fiscal Responsibility Act 2007.
“Countries around the world have of necessity over-shoot their fiscal thresholds for their economies to survive and thrive.
“There is a need to exceed the threshold considering the administration collective desire to continue tackling the existential security challenges facing the country.
“It is important to point out that issues of revenue shortfall and meeting unexpected emergencies can only be tackled either by borrowing or cutting expenditure, shrinking the economy and government and social services, rationalisation, job cuts etc.
“While the first option will pile up debts which must be paid in the future, it allows you to survive the present and stabilize to enable you to device the means of paying the debt. If invested properly, debt could provide one with the platform and capacity to pay the debt itself and catapult into a brighter future.
“The second option which is more dangerous is to shrink the economy and risk political suicide and economic turbulence by sacking workers, obliterating opportunities, cutting social service and starving our communities to death and Oblivion.
“To finance the deficit therefore is to engage in new browings totalling N8.80 trillion; N206.18 from privatisation proceeds and N1.77 trillion drawdowns on bilateral/multilateral loans secured for specific development projects/programmes”.
“Although there is a growing concern over this administration resort to borrowing to finance fiscal gaps, let me state here that the debt level of the Federal Government is still within sustainable limits.
“Very importantly, these loans are used to finance critical development projects and programmes aimed at improving our economic environment and ensuring effective delivery of public services to our people.
“Nevertheless, it is also important to note that a budget deficit of this size requiring more indebtedness is not healthy for the long term development of the country, but this must be tolerated now because of the challenges of the time.
“It is important, above all to note that this is a budget of fiscal sustainability and transition with the principal objective of maintaining a fiscal viability and ensuring a smooth to the transition to the incoming administrations.”
In his remarks, the Senate President Ahmad Lawan bemoaned the huge loss of revenue due to high scale oil theft and called for appropriate sanctions against the pepetrators.
Lawan charged the committees of the Senate to, in the course of the budget defence, ensure critical scrutiny of the submissions and trace any leakage or wastages contained in it.
He futher called on them to give more priority on the completion of on going projects rather than initiating new ones to avoid incidents of abandoned projects, particularly now that the present administrtaiion is on its last lap.
The Senate President referred the bill to the Senate Committee on Appropriation for further legislative process, to report back in four weeks.
