Nigeria to stop petrol subsidy payment in June – Minister

Nigeria's Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has said that the Federal Government will stop the…

Nigeria’s Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has said that the Federal Government will stop the payment of petrol subsidy by the end of June 2023.Giving the breakdown of the 2023 budget on Wednesday in Abuja, the minister said that N3. 36 trillion had been provided for petrol subsidy payment to cover the first six months of this year.

Speaking on the performance of the economy, especially the revenue side as at November 2022, she stated revenues stood at N6. 5 trillion, representing an 87 percent of the set target of N7. 8 trillion for the year.

According to the minister, the drivers of the growth of the Nigerian economy in 2022 included Agriculture 23 percent, information and communications technology, trade, manufacturing with the oil and gas sector contributing just about 5. 6 percent.

On the issue of tax waivers, the minister disclosed that a total of N6 trillion had gone into the tax waiver scheme between 2021 and 2022.

On debt servicing, the minister said that the federal government had spent a total of N5.24 trillion on debt servicing between January and November 2022, out of a revenue of N6.5 trillion for the same period with the country’s debt service-to-revenue ratio put at 80.6 percent for the period under review.

On funding sources for the 2023 budget, Ahmed said 22 percent of the projected revenues will come from oil-related sources, while 78 percent will be earned from non-oil sources.

She disclosed that the overall budget deficit for the 2023 budget was N11.34 trillion, representing 5.03 percent of the country’s gross domestic product (GDP).

The minister explained that the budget deficit would be financed mainly by borrowings and that N7.04 trillion would be borrowed from domestic sources, N1.76 trillion from foreign sources, N1.77 billion from multilateral and bilateral loan drawdowns, while privatisation proceeds would provide N206.18 billion.

According to her, the gap between the revenue plus additional financing, and total expenditure, amounting to N553.46 billion is expected to be financed by additional revenue from spectrum fees and tax on the maritime sector.

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