Senate approves MTEF/FSP for 2023 budget, raises oil benchmark to $73/barrel

The senate has approved the medium term expenditure framework and fiscal strategy paper (MTEF/FSP) ahead of the consideration of the 2023 budget proposal.

The upper legislative chamber approved the documents on Wednesday, after Solomon Olamilekan, chairman of the finance committee, presented a report on the MTEF/FSP.

The MTEF/FSP are parameters any budget of the country is premised on.

President Muhammadu Buhari will present the N19.76 trillion 2023 budget to a joint session of the national assembly on Friday.

Speaking during his presentation to the senate, Olamilekan recommended “that the oil price of $73 per barrel of crude oil be approved as a result of continuous increase in the oil price in the global oil market and other peculiar situations such as continuous invasion of Ukraine by Russia, as this will result in saving of N155 billion.”

“That the cost of petroleum subsidy be capped at N3.6 trillion accordingly,” he said.

“Significant reduction in both waivers and tax exemptions of corporate organisations to cushion the effect of budget deficit.

“Aggregate federal government expenditure of N19.76 trillion; made up of total recurrent (non-debt) of N8.53 trillion; personnel costs (MDAs) of N827.8 billion; of capital expenditure (exclusive of transfers) N3.96 trillion; special intervention (recurrent) amounting to N350 billion; and special intervention (capital) of N7 billion.

“That the relevant oversight committees of the national assembly are at liberty to remove recycled projects in their budget proposal during the committees’ budget defence.”

Considering the report, the senate approved $73 as the oil benchmark, increasing the figure of what the executive arm of government proposed by $3.

The executive had proposed $70 as the oil benchmark.

The senate further retained the projected 1.69 million barrels per day (bpd) as the production of crude for the 2023 budget.

It also maintained N437.57 as the exchange rate, just as the executive proposed.

In addition, the upper legislative chamber retained 3.75 percent as gross domestic product (GDP) growth rate and 17.16 percent as projected inflation rate.