LCCI holds webinar on 2023 budget, identifies challenges, opportunities
By Abimbola Mohammed
Lagos Chambers of Commerce (LCCI) held its annual conference on Economic Outlook and Budget Analysis Conference to review how the economy fared in 2022 and the emerging issues framing the outlook for 2023.
The hybrid with the theme: “Economic Outlook and Budget Analysis Conference” event was held at its office in Victoria Island and via zoom.
While giving the opening remark Asiwaju Dr. Michael Olawale-Cole CON, President LCCI, said the essence of holding the conference and budget analysis is to facilitate conversation and share aesthetics from diverse sectors of the economics of the details on the budget and what it means for businesses in 2023.
According to him, he said traditionally the section is to enlighten stakeholders, corporate and business executives on how the budget will likely affect sectors and industries of the economy and how they can explore the opportunities for profitability and sustainability.
He added that the presentations and panel sessions would point out areas to watch for risks, and the opportunities for business growth and sustainability.
On his part, the keynote speaker, Ben Akabueze, DG, Budget office of the federation, while delivering his presentation on “The 2023 budget implementation plan Vs Budget performance: Implications and opportunity for business” said: “The principal thrust of the 2023 Appropriation, christened “Budget of Fiscal Consolidation and Transition” is to maintain fiscal viability and ensure smooth transition to the incoming Administration.”
He added that the budget was prepared against the backdrop of continuing global and domestic challenges sparked by a multiplicity of crises. Many economies are currently contending with fiscal instability, slow growth, food crisis, and high interest rates. Like many other countries, our economy faces headwinds from low revenues, high inflation, exchange rate depreciation and insecurity.
The DG outlined the factors impacting the medium-term fiscal outlook, domestically and internationally, as: “The Russia-Ukraine war, with severe implications on food and energy prices, which have heightened the cost of Petrol Subsidy in Nigeria; the resurgence of COVID-19, elevated inflation in most economies, prompting monetary tightening by Central banks with the inherent negative impact on capital flows to emerging markets and developing economies; and Negative impact of insecurity on the domestic economy.”
Speaking on the overview of the 2023 budget, he noted that the projected fiscal outcome in the 2023 budget is based on the PMS subsidy reform scenario.
“In the 2023 Budget framework, it is assumed that petrol subsidy will remain up to mid-2023 based on the 18-month extension announced early 2022. In this regard, only N3.36 trillion has been provided for the PMS subsidy. There will be tighter enforcement of the performance management framework for GOEs that will significantly increase operating surplus/dividend remittances in 2023. Total revenue available to fund the 2023 FGN Budget is estimated at N11.05 trillion. This includes the gross revenues of 63 Government-Owned Enterprises totaling N3.87 of this, FGN Oil revenue share is projected at N2.29 trillion, Non-oil taxes are estimated at N2.43 trillion, and FGN Independent revenues are projected to be N3.17 trillion. Other revenues total N737 billion. In aggregate, 21% of projected revenues are expected from oil-related sources, while 79% is to be earned from non-oil sources,” the DG said.
Identifying some of the business opportunities in the 2023 budget, he said: “Private sector investors should leverage on the improved business environment/ease of doing business in the country. A strong partnership between the public and private sectors is, therefore, imperative for successful delivery of the Plan outcomes and the 2023 FGN budget is yet another step towards achieving the NDP 2021-25.”
The DG concluded his session by saying the 2023 Budget was prepared amidst a very challenging world economy that is weakened by lingering Covid-19 pandemic effects, high food and fuel prices and negative spillover effects of the Russia-Ukraine war.
“Like many other countries, our economy faces headwinds from these factors, compounded by domestic security challenges. Fiscal risks are somewhat elevated, following weaker-than-expected domestic economic performance and structural issues adversely impacting the domestic economy. However, our interventionist and reflationary measures have significantly moderated the impact of current challenges,” he said.
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