…oil benchmark 77.96 US Dollars
…1.78mbpd oil production
…exchange rate at N750 per Dollar
…Non-debt recurrent expenditure N9.92trn
…Capital expenditure at N8.7trn
…as NASS debates budget today, tomorrow
OSAS EMMANUEL AND MARGARET CHIDERA
ABUJA, Nigeria – President Bola Tinubu on Wednesday presented to a joint session of the National Assembly the 2024 budget totalling N27.5 trillion.
The government proposed a shortfall of N9.18 trillion or 3.88 percent to Gross Domestic Product (GDP) and expected to finance the deficit by new borrowings totalling N7.83 trillion.
The borrowing component include; “N298.49 billion from Privatisation Proceeds and N1.05 trillion drawdown on multilateral and bilateral loans secured for specific development projects.”
Parameters of the 2024 budget, according to the estimated presented by President Tinubu, are; “a conservative oil price benchmark of 77.96 US Dollars per barrel and daily oil production estimate of 1.78 million barrels per day. We have also adopted a Naira to US Dollar exchange rate of 750 naira per US Dollar for 2024.
“Accordingly, an aggregate expenditure of 27.5 trillion naira is proposed for the Federal Government in 2024, of which the non-debt recurrent expenditure is 9.92 trillion naira while debt service is projected to be 8.25 trillion naira and capital expenditure is 8.7 trillion naira.
Nigeria remains committed to meeting its debt obligations. Projected debt service is 45% of the expected total revenue.
“Budget deficit is projected at 9.18 trillion naira in 2024 or 3.88 percent of GDP. This is lower than the 13.78 trillion naira deficit recorded in 2023 which represents 6.11 percent of GDP.
“The deficit will be financed by new borrowings totalling 7.83 trillion naira, 298.49 billion naira from Privatisation Proceeds and 1.05 trillion naira drawdown on multilateral and bilateral loans secured for specific development projects.”
Tinubu said his government remains committed to broad-based and shared economic prosperity by reviewing social investment programmes to enhance their implementation and effectiveness.
He said “in particular, the National Social Safety Net project will be expanded to provide targeted cash transfers to poor and vulnerable households. In addition, efforts will made to graduate existing beneficiaries toward productive activities and employment.”
Government, he said, is currently reviewing tax and fiscal policies.
“Our target is to increase the ratio of revenue to GDP from less than 10 percent currently to 18 percent within the term of this Administration. Government will make efforts to further contain financial leakages through effective implementation of key public financial management reforms.
“In view of the limited resources available through the federal budget, we are also exploring Public Private Partnership arrangements to finance critical infrastructure.
“We, therefore, invite the private sector to partner with us to ensure that our fiscal, trade and monetary policies, as well as our developmental programs and projects succeed in unlocking the latent potential of our people and other natural endowments, in line with our national aspirations,” he added.
PRIORITIES OF THE 2024 BUDGET
According to the President, the 2024 Appropriation themed the Budget of Renewed Hope, seeks to achieve “job-rich economic growth, macro-economic stability, a better investment environment, enhanced human capital development, as well as poverty reduction and greater access to social security.”
Defence and internal security, he said are accorded top priority.
“The internal security architecture will be overhauled to enhance law enforcement capabilities and safeguard lives, property and investments across the country.
Human capital is the most critical resource for national development. Accordingly, the budget prioritises human development with particular attention to children, the foundation of our nation.
“To improve the effectiveness of our budget performance, government will focus on ensuring value for money, greater transparency and accountability. In this regard, we will work more closely with development partners and the private sector.
“To address long-standing issues in the education sector, a more sustainable model of funding tertiary education will be implemented, including the Student Loan Scheme scheduled to become operational by January 2024.
“A stable macro-economic environment is important to catalyse private investment and accelerate economic growth. We have and shall continue to implement business and investment friendly measures for sustainable growth.
“We expect the economy to grow by a minimum of 3.76 percent, above the forecasted world average. Inflation is expected to moderate to 21.4 percent in 2024.
In preparing the 2024 Budget, he said the primary objective of the government has been to sustain our robust foundation for sustainable economic development. A critical focus of this budget and the medium term expenditure framework is Nigeria’s commitment to a greener future.
Tinubu emphasized public-private partnerships, saying the government have strategically made provisions to leverage private capital for big-ticket infrastructure projects in energy, transportation and other sectors.
This, he said, “marks a critical step towards diversifying our energy mix, enhancing efficiency, and fostering the development of renewable energy sources. By allocating resources to support innovative and environmentally conscious initiatives, we aim to position Nigeria as a regional leader in the global movement towards clean and sustainable energy.
“As we approach COP 28 climate summit, a pivotal moment for global climate action, I have directed relevant government agencies to diligently work towards securing substantial funding commitments that will bolster Nigeria’s energy transition.
“It is imperative that we seize this opportunity to attract international partnerships and investments that align with our national goals. I call upon our representatives to engage proactively to showcase the strides we have made in the quest to create an enabling environment for sustainable energy projects.
“Together, we will strive for Nigeria to emerge from COP 28 with tangible commitments, reinforcing our dedication to a future where energy is not only a catalyst for development but also a driver of environmental stewardship.
Distinguished members of the National Assembly, the revised 2024-2026 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) sets out the parameters for the 2024 Budget.”
PERFORMANCE OF THE 2023 BUDGET
Giving a recap of the 2023 Budget Performance, the President said “an aggregate revenue of 11.045 trillion naira was projected to fund the 2023 Budget of 24.82 trillion naira with a deficit of about 6.1 percent of GDP.
“As of September 30, the Federal Government’s actual aggregate revenue inflow was 8.65 trillion naira, approximately 96 percent of the targeted 8.28 trillion naira.
“Despite the challenges, we continue to meet our obligations.”
Going down memory lane , the President reeled out the economic intervention so far made by his administration saying “my very first fiscal intervention as President of this great nation was to end the fuel subsidy regime which had proven to be so harmful to the overall health of our national economy. The second was to negotiate and subsequently present a supplementary budget to enable my government to fund the items needed to restore macro-economic stability and mitigate the harsh impact of subsidy removal.
“The third was to secure a second supplementary budget, this time to enable us to keep our promises to promote national security, invest in infrastructure and provide much needed support to the most vulnerable households in our society.
“In swearing-in my cabinet and reflecting on the unique challenges facing us, I invited the Ministers to imagine that we are attempting to draw water from a dry well.”
Tinubu said the 2024 budget will go further than ever before in “cementing macro-economic stability, reducing the deficit, increasing capital spending and allocation to reflect the eight priority areas of this Administration”.
Commending NASS
President Tinubu commended members of the National Assembly for their swift consideration and passage of the 2023 Supplementary Appropriation Bills and the 2024-2026 Medium Term Expenditure Framework and Fiscal Strategy Paper.
“Your prompt action underscores your devotion to economic development and to the greater welfare of our people. It also highlights your desire to work in close collaboration with the Executive branch,” he said.
He expressed confident that the National Assembly will continue to work closely with the Executive to ensure that deliberations on the 2024 Budget are thorough but also concluded with reasonable dispatch.
“Our goal is for the Appropriation Act to come into effect on the 1st of January 2024.”
In considering the budget, he urged the National Assembly to be guided by the interest of all Nigerians.
“We must ensure that only projects and programmes with equitable benefits are allowed into the 2024 Budget.
“Additionally, only projects and programmes which are in line with the sectoral mandates of MDAs and which are capable of realising the vision of our Government should be included in the budget,” he said
Speaking earlier, the President of the Senate, Godswilll Akpabio, promised a thorough review of the financial proposals.
He assured Tinubu that the proposals presented will be diligently considered accordingly as well as approaching the exercise with a sense of duty, unity, and purpose.
He, therefore, asked the Presidency to prevail upon heads of government agencies and paraststals to make themselves available to defend their estimates during budget defence.
He said “to ensure maximum attention to the review of the Year 2023 Budget performance and the consideration of the Year 2024 Budget Proposal, we request that Mr President would mandate Honourable Ministers and Heads of Agencies to avoid any travelling engagements that would prevent them from honouring our invitation to promptly appear before our committees to defend their budget estimates.”
Mr President, as we embark on this budget presentation, let us reaffirm our commitment to responsible governance, fiscal prudence, and the efficient allocation of resources for the benefit of all Nigerians. Together, with the spirit of unity and collaboration, we can overcome challenges and usher in an era of unprecedented development through reinvigorated revenue generation and fiscal prudence.
We will continue to support the war against corruption and collaborate with anti-graft agencies to ensure that we do not continue to lose money that could be used to develop our people. The Tenth Assembly will always stand with the people, protect their constitutional rights and fight for their welfare. We are glad that you share these sentiments for our people and had codified these in the Renewed Hope Agenda. This Agenda resonates with us as an instrument the people endorsed by voting you into office. Our legislative agenda constellate around it and we believe its faithful implementation would agur well for our nation, and put our country on a new growth trajectory.
The Speaker of the House of Representatives Rt. Hon. Abbas Tajudeen, Ph.D, has said the 2024 Appropriation Bill “should not be seen as a mere financial document but a reflection of our collective resolve to address the most critical needs of our long-suffering citizens.”
In his vote of thanks after President Bola Ahmed Tinubu laid the 2024 budget estimates Abbas noted that “it is a well-known fact that millions of our constituents are living through incredibly difficult times,” said it is for this reason that the citizens ” urging the Tinubu-led government to provide quick and sustainable solutions.
“Mr. President, it is for this reason that we cannot afford to fail Nigerians. If anyone can change the rot and chart a new course for Nigeria, IT IS YOU! I have no doubt whatsoever that we can measure up to the expectations of Nigerians through your visionary leadership and the commitment of the National Assembly,” he said.
In order to promote economic growth and development, Speaker Abbas stated that the 2024 budget “should prioritise social welfare programmes to help reduce poverty and inequality.”
He added that job creation and youth empowerment, in view of the large and ever-growing youth population, was equally important.
The Speaker stated: “Failure to do this means failure to invest in our future. This budget must also prioritise investment in education and healthcare, which is critical to human capital development and a more productive workforce. Infrastructure development is another critical area of importance, which is crucial for economic growth.
“The biggest challenge, however, is balancing these priorities within the constraints of available resources.”
REACTIONS
Senator Sani Musa, chairman Senate Committee on Finance said “we never had it so good in budget presentation where the capital expenditure has been raised to about N8 trillion and though the deficit has increased, the debt servicing has reduced.
“We are looking at making the dollar 750 naira instead of 700, which means we are going to get more revenue from that. The crude oil price has been increased from 73 to 75 dollars, which is good.
“In a nutshell, you can see that the budget is different from the previous ones that we have had where the debt servicing is far more than the capital budget. Now the capital budget has been raised to N8 trillion, which is unprecedented. I believe this budget will handle the renewed hope of Nigerians.
Some of the differences between the 2024 budget and the previous ones, according to him are the debt servicing which will increase taxation and looking at the government enterprises that are performing to be commercialised or privatised for government to make more money leading to “efficiency”.
To stop most of the leakages witnessed, Sani said “Customs now is trying to modernize . There is this e-Customs platform that they are going to work and taxes will be collected centrally. “If we do that, I think a lot of loopholes that have become pipe drain for abuse will be blocked. This is the best time that Nigerians should be hopeful”.
Seconding to Senator Jimoh Ibrahim (Ondo South) “we now have a budget of N9.7 trillion recurrent expenditure and we have N8.7 trillion capital expenditure, fantastic, for the first time is not all budgeting for salary. You see, it is beyond the 30 per cent benchmark in the last 10 years of having a budget of 25 per cent capital project and the remaining for recurrent expenditure. Now they are very close; you have the recurrent expenditure and capital project very close.
“The 45 per cent debt services, that is not bad, except that we are borrowing more. Remember, last year, debt to GDP was about 6 per cent. now, debt to GDP is about 3 per cent. Now, we have a deficit financing of about N8.7 trillion and we are going to fund that from external borrowing. It is a fair budget and it is on infrastructure development.
“There are 11,846 abandoned Federal Government mega project in Nigeria. Is that not worrisome? Above all, averagely, it is a very fair budget, except that we have to look at the area of funding, the area of borrowing.
“Now we are borrowing N8.7 trillion dollars, that is not too much of borrowing for 250 million people. What Nigeria is owing is less than 100 billion dollars, and debt to GDP is about 30 per cent meaning; that we can still borrow 70 per cent value of our GDP.
Senator Aliyu Wadada (Nasarawa West) said the budget circle of January to December is still possible despite the late presentation by the president if all hands are on deck.
According to him, the feat cannot be achieved without the chief executives of ministries, agencies and departments (MDAs) appearing as ta when due. “I expected the leadership of the National Assembly to have emphasized it to the president to be assertive on his ministers heads of MDAs to make themselves available during budget consideration, which he described as a “serious business”.
Meanwhile, both chambers of the Senate Assembly will today begin debating the 2024 budget. The exercise will span Friday.
Disclosing this at the end of plenary yesterday, Senate President, Godswill Akpabio said plenary will be suspended for the various ministries, departments and agencies (MDAs) appear before their supervision committees in the parliament to defend their budget proposals.
He said plenary will resume on Tuesday, December 4 to begin consideration of various committee reports before the passage of the budget.
