The Lagos Chamber Of Commerce and Industry (LCCI) has expressed deep concerns over the huge cost of financing the 2023 budget deficit of N11.34 trillion which is equivalent of about 5.03% of the nation’s GDP.
At the January 2023 economic review and budget analysis session organized in Lagos recently, the chamber laid emphasis on what the figures and policy statements mean for businesses to provide insight on the implications of the 2023 budget for businesses, policymakers, and investors, and the economic outlook in the year ahead.
In a statement, the President and Chairman Of Council LCCI, Michael Olawale-Cole, noted that with the 2023 federal government budget tagged “budget of fiscal consolidation and transition,” the federal government plans to spend the sum of N21.83 trillion in the new fiscal year.
According to the statement this is an increase of N1.32 trillion over the initial executive proposal for a total expenditure of n20.51 trillion and from the sum of n17.13 trillion in 2022.
“This budget size reaffirms the commitment of the government to pursuing an expansionary fiscal policy to stabilize growth and deepen the diversification of the Nigerian economy.
“The overall budget deficit at N11.34 trillion for 2023 represents 5.03% of GDP. The budget deficit is to be financed mainly by borrowings made up of domestic sources of N7.04tn, foreign sources of N1.76trillion, multi-lateral/bi-lateral loan drawdowns of N1.77billion, and privatisation proceeds: N206.18 billion.
“With the deficit financing to come from borrowing, the chamber wishes to reiterate our concerns about debt costs. We need to re-assess our debt sources to borrow at lower rates and also embrace more non-tax revenue sources.” Olawale-Cole emphasised.
He further noted that the Nigerian economy in 2022 recorded growth in the first three quarters but slowed down from 3.54% in q2 to 2.25% in the third quarter.
“The slowdown was driven by a decline in aggregate demand in the face of inflation spikes, commodities’ supply chain disruption, high energy costs, and forex scarcity. In 2023, we expect to see growth in sectors like manufacturing, agriculture, transport, telecommunications, and trade.” The LCCI Chairman said.
The economic outlook and budget analysis session aimed to enlighten stakeholders, corporate and business executives on how the budget will likely impact sectors and industries of the economy, and how they can explore the opportunities for profitability and sustainability.
Participants include renowned economists of repute; Ben Akabueze, Dr. Biodun Adedipe, and Taiwo Oyedele. The panel session was moderated by Dr. Ayo Teriba, CEO of Economic Associates.
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