In a significant development, the Federal Government of Nigeria is set to allocate a substantial amount of N7.76 trillion in 2023 for salaries to federal workers and other non-debt recurrent costs. This decision is outlined in the initial 2023 budget and the recently signed 2023 supplementary budget, with a notable focus on addressing new expenses, including the removal of the fuel subsidy.
The Minister of Budget and Economic Planning, Abubakar Bagudu, revealed that out of the N2.18 trillion supplementary budget, N605 billion is designated for national defense, aimed at sustaining and accelerating gains in the security sector. Another N210 billion has been earmarked for wage awards, reflecting the government’s commitment to the workforce.
Bagudu stated, “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 covering September, October, November, and December 2023.”
Appropriation details from the budget office indicate that N1.01 trillion of the total budget is allocated for recurrent expenditure, while N1.17 trillion is reserved for capital expenditure. The supplementary budget increases the total non-debt recurrent expenditure to N7.76 trillion and capital expenditure to N4.53 trillion, pushing the overall 2023 budget to N19.81 trillion.
A significant portion of the recurrent expenditure, at least N4.31 trillion (55.54%), will be directed towards salaries. The government has already spent N978.10 billion on salaries in the first three months of 2023, based on the 2023 Q1 implementation report. Non-debt recurrent expenditure and capital expenditure incurred costs of N1.24 trillion and N175.45 billion, respectively.
To finance these expenditures, the government has borrowed N2.30 trillion, contributing to a predicted fiscal deficit of N9.01 trillion for the year. The rising expenditure costs have led to concerns, especially considering the declining revenues. The Accountant General of the Federation, Mrs. Oluwatoyin Madein, emphasized the need for continuous efforts to increase revenue amid economic challenges.
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As Nigeria grapples with falling oil production and struggles to diversify its economy, the former Minister of Finance, Budget, and National Planning, Zainab Ahmed, succinctly captured the situation, stating, “Revenue generation remains the major fiscal constraint of the federation.” The government faces the critical task of balancing its financial commitments amid economic uncertainties.
