The Federal Government on Wednesday vowed to end the fiscal regime by the end of June this year.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, who gave this hint during her public presentation on the breakdown of the 2023 Federal Government budget in Abuja, said that the government had made provisions of N3.36 trillion for fuel subsidy payment to cover the first six months of this year.
She pointed out that the fiscal step aligned with the 18-month extension announced in early 2022 by the government to end the fuel subsidy regime.
The minister said: “The projected fiscal outcome in the 2023 Budget is based on the PMS subsidy reform scenario. In the 2023 Budget framework, it is assumed that petrol subsidy will remain up to mid-2023 based on the 18-month extension announced early 2022.
“In this regard, only N3.36trn has been provided for PMS subsidy. There will be tighter enforcement of the performance management framework for Government Owned Enterprises that will significantly increase operating surplus/dividend remittances in 2023”, Ahmed added.
She further spoke on sundry reforms initiated by the government to diversify the nation’s economy and the successes recorded so far, noting that with the proposal in the 2023 budget that non-oil sector will account for about 78% of revenue accruals, the diversification agenda has achieved remarkable results with the attendant socio-economic benefits for the country.
Specifically, Ahmed, who pointed out that the key thrust of the 2023 budget was to boost revenues required to fund capital and recurrent expenditures, recalled that as of November 2022, the sum of N6.50 trillion was generated as revenue, representing about 87 per cent of the prorated target of N7.48 trillion for the year.
Also commenting on the performances of the oil and non-oil sectors in terms of revenue generation, the minister explained that in the fiscal year 2022 oil revenues totalled N586.71 billion, representing 35.7 percent performance, while non-oil tax revenues totalled N2.09 trillion, indicating 123.3 percent performance.
Ahmed further disclosed during the year in review, the Companies Income Tax stood at N1.08 trillion, representing a 158.6 percent of the target while the Value Added Tax collections totalled N295.2 billion or 124.3 percent of the targeted collection.
She also said that Customs collections comprising import duties, excise, fees, and special levies exceeded the target by N15.42 billion.
On the expenditure side, the minister said that the actual spending from the 2022 budget as of 30th November was N12.87 trillion.
According to her, of this amount, N5.24 trillion was for debt service; N3.94 trillion for personnel costs including pensions; statutory transfers, overhead and that Service Wide Votes expenditures totalled N8.1 trillion.
On the debt management strategies of the government, the minister maintained that the Federal Government was not planning to restructure the debt payment as it remains committed to continue to meet its obligations to domestic and international lenders by adopting appropriate debt management tools to streamline the cost and risk profiles.
Meanwhile economic analysts believe that the latest fiscal move by the Federal Government to end the much discredited fuel subsidy regime primarily derived from sustained campaigns by Nigerian experts, industry groups and multilateral finance institutions, mainly the International Monetary Fund, the World Bank Group, who have been reeling out statistical data and other analyses to prove that the fuel subsidy regime is undesirable for sustainable growth of country.
Over the years, the fuel subsidy regime had been characterized by frauds and other fiscal abuses as figures being bandied by the promoters on payments and volume of fuel being subsidized never align with realities in the downstream sub-sector of the petroleum industry.
