The recently negotiated wage agreement with the Labour Congress, salaries for federal workers, and other non-debt recurrent costs are expected to amount to N7.76 trillion in 2023, according to data from the initial 2023 budget and the recently signed 2023 supplementary budget. The central government approved a N2.18 trillion budget to address new expenses, including wage rewards for workers following the removal of the fuel subsidy.
Minister of Budget and Economic Planning, Abubakar Bagudu, revealed key allocations, stating that N605 billion is earmarked for national defense, and N210 billion will cover wage awards. He emphasized the importance of sustaining gains in security and addressing critical infrastructure needs, such as bridge repairs and road maintenance.
The payment of wage awards was a result of negotiations with the Nigeria Labour Congress, with the federal government agreeing to pay N35,000 each to approximately 1.5 million federal employees, covering the months of September through December 2023.
According to appropriation details, the total budget includes N1.01 trillion for recurrent expenditure and N1.17 trillion for capital expenditure. The supplementary budget is set to increase the total non-debt recurrent expenditure to N7.76 trillion and capital expenditure to N4.53 trillion. The total budget for 2023, including the supplementary budget, is expected to reach N19.81 trillion, with a net budget of N13.26 trillion after removing debt servicing costs.
Of the N7.76 trillion budgeted for recurrent expenditure, approximately N4.31 trillion (55.54 percent) will be allocated to salaries. The government has already spent N978.10 billion on salaries in the first three months of 2023, based on the 2023 Q1 implementation report, in addition to N1.24 trillion on non-debt recurrent expenditure and N175.45 billion on capital expenditure.
To finance the budget, the government has borrowed N2.30 trillion, and despite signing the supplementary budget, it anticipates a fiscal deficit of N9.01 trillion for the year. The Federal Government has expressed concern over rising expenditure costs amid declining revenues. The Accountant General of the Federation, Mrs. Oluwatoyin Madein, emphasized the need to continuously work on strategies to increase revenue to meet the expectations of Nigerians.
The ongoing revenue crisis in Nigeria is attributed to falling oil production and the challenges of diversifying the economy, as highlighted by former Minister of Finance, Budget, and National Planning, Zainab Ahmed. She stated that revenue generation remains a significant fiscal constraint for the federation.