New Telegraph

February 29, 2024

2023 Budget: Experts berate FG on N8.80trn proposed borrowing, N6.31trn debt service cost

Finance experts, budget analysts have thumbed down the Federal
Government’s excessive borrowing and debt servicing projection in the
2023 budget.

They warned of a looming revenue crisis next year unless extreme caution is applied to the borrowing spree and debt service.

Their concern is premised on Friday’s presentation of the N20.51 trillion 2023 Budget by President Muhammadu Buhari to the joint session of members of National Assembly in Abuja.

In the proposal, the Federal Government proposed N8.80 trillion new borrowing to finance the budget and N6.31 trillion for debt service, an amount they say is quite worrisome.

However, they commended the Federal Government for early presentation of the budget, and for keeping faith with the January to December budget calendar.
Mr. Uche Uwalake, a Professor of Capital Market and a former Commissioner for Finance, Imo State, described the early presentation of the 2023 Budget by the government as deserving of commendation.

“The early presentation of the 2023 Budget Proposal is commendable as it ensures the sustainability of the return to the January to December budget cycle. It’s equally noteworthy that the Finance Bill will be considered alongside the 2023 Appropriation Bill as well as the fact that the budget of government-owned enterprises is integrated to promote transparency.
However, he said: “It is worrisome that capital expenditure as a proportion of total spending has gone down well below the government target of 30% while debt service at over N6 trillion is in excess of the amount budgeted for capital expenditure.

Economy Analyst, Dr. Ilyasu Aliyu also raised similar concerns about huge borrowings next year and amount proposed for debt service. He feared that, if care is not taken, Nigeria’s debt service will surpass its revenue next year.
He advised the government to work on revenue generation as against frequent resort to borrowings.
Dr. Aliyu commended President Buhari’s administration for sticking to timely presentation of budget in line with the January – December budget calendar.

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