The Senate on Wednesday passed the 2023 Appropriation Bill for a second reading for further legislation.
President Muhammadu Buhari had last week presented the Appropriation bill to the Joint Sitting of National Assembly.
The bill seeks to authorise the consolidated revenue fund of the federation, which amounts to N20,507,942,180,704 (N20.5 trillion) for the year ending on December 31, 2023.
After the bill was passed for a second reading following a debate on its general principles, the Senate suspended its plenary until November 15, 2022 to enable its committees embark on budget defence with relevant Ministries, Departments and Agencies.
Leading the debate on the bill, the Senate Leader, Abdullahi Gobir, said based on the budget fiscal assumptions and parameters, the current expenditure, which constitutes over 43 per cent of the total budget outlay is still too high.
According to Gobir, the current expenditure contained personnel costs, pensions, benefits and overheads, described as expenses 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.
“This represents 4.78 per cent of estimated GDP, above the 3 per cent threshold set by the Fiscal Responsibility Act 2007.
“Countries around the world have of necessity overshot their fiscal thresholds for their economies to survive and thrive.
“There is a need to exceed the threshold considering the administration’s 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 stabilise 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 borrowings 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, Senate President Ahmad Lawan bemoaned the huge loss of revenue due to high scale oil theft and called for appropriate sanctions against the perpetrators.
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 further called on them to give more priority on the completion of ongoing projects rather than initiating new ones to avoid cases of abandoned projects, particularly as the current administration in on the verge of leaving.
The Senate president referred the bill to the Senate Committee on Appropriation for further legislative process, with a charge to report back in four weeks.
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