FG to spend N3.36trn on petrol subsidy in first half of 2023

The federal government says N3.36 trillion has been allocated for fuel subsidy in the first half of 2023.  

Zainab Ahmed, minister of finance, made this known on Wednesday in Abuja. 

Ahmed said the 2023 budget proposal has a deficit of N10.78 trillion. 

She said the deficit will be funded through domestic and multilateral borrowings and proceeds from privatisation.

The minister said Nigeria’s debt profile surged to $102 billion, of which 35 percent is foreign and 65 percent is domestic. 

She added that the current public debt is at 23 percent of the country’s gross domestic product.

Ahmed said the 2023 budget also factored in 17.16 percent  inflation.

She noted that the budget has been prepared on the background of international challenges such as the Russia-Ukraine war and COVID-19 pandemic, adding that revenue generation has been a major challenge to national development in the country.

On allocations for critical sectors, Ahmed said the sum of N2.05 triliion was allocated to education and N1.58 trillion for health.

She added that N2.74 trillion was earmarked for defense and security, infrastructure got N998.9 billion, while social development and poverty reduction has N756 billion. 

Meanwhile, Ahmed had said the federal government will halt spending on petrol subsidy in June 2023. 

President Muhammadu Buhari, affirming the FG’s stance, said the subsidy was no longer sustainable considering the current fiscal impact.

The FG had said an estimated N6.7 trillion in 2023 would be spent on subsidy —if it is not removed — or N3.36 trillion for the first half of the year, if the FG does not go back on its word. 

TheCable had reported that the Nigerian National Petroleum Company (NNPC) Limited spent N2.565 trillion on petrol subsidy payments since the beginning of the year.