FG confirms a N26.01 trillion budget for 2024
On Monday, the National Assembly was presented with a budget proposal of N26.01 trillion for the fiscal year 2024 by the Federal Executive Council, or FEC.
The administration declared that it was making efforts to guarantee that the budget cycle of January to December be kept intact and that the 2024 budget be approved and signed by December 31, 2023.
At the conclusion of a council meeting chaired by President Bola Tinubu at the Council Chamber, Presidential Villa, Abuja, Minister of Budget and Planning Atiku Bagudu disclosed the information.
After the FEC, Bagudu informed State House correspondents that the 2024–2026 budget has been approved by the Council. He made this announcement alongside colleagues from the Ministry of Information and National Orientation, Mohammed Idris, the Ministry of Finance and Coordinating Minister of Economy, Wale Edun, Works Engineer Dave Umahi, Industry, Trade and Investment, Doris Uzoka-Anite, Labor and Employment, Simon Lalong, and the Minister of State for Labor, Nkeiruka Onyejecha.
He clarified that the Fiscal Responsibility Act mandates that the administration submit a report to the National Assembly prior to a budget presentation, which contains the medium-term economic prognosis for the nation’s economy.
Benchmarks
According to him, the FEC established assumptions regarding the reference price for crude oil, which is $73.96, the exchange rate, which is $700, and the daily output of 1.78 million barrels of oil.
Debt service of N8.25 trillion, GDP growth of 3.76 percent, and inflation of 21% are projected.
“Now, it was presented on the background of the commendable measures that have been taken since June in order to restore macroeconomic stability,” he stated. “We maintained that subsidies are no longer in place for petroleum prices, and that the foreign exchange market is indeed regulated.”
The implications of this, as well as all the measures promised in the renewed hope agenda, were discussed by the Council. These included funding the newly aligned institutional changes, especially ministries with specific functions that can spur growth and be better for our nation, as well as consumer credits, mortgages, and dismissed or reversed institutions.
“The medium-term expenditure framework has been acknowledged by the council members, and it has been decided to proceed to the next phase of consultation and National Assembly presentation.”
“The Fiscal Responsibility Act requires the Medium Term Expenditure Framework,” he clarified. Thus, according to the first three documents, the Fiscal Responsibility Act covers the years 2024–2026.
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The reference price in the several hundred dollars is predicated on the hope that investment flows will not stop. With all of the interactions and favorable tractions.
“We are witnessing from investors from the engagements headed by Mr. President himself, two distinct nations, specifically India, the United Arab Emirates, and France, the engagements headed by the Coordinating Minister of the Economy, which are headed by the Minister of Trade and Investment, as well as other ministers.
Therefore, there has been an increase in the governor of the Central Bank of Nigeria’s engagement, as well as that of the other ministers. Therefore, we think that these inflows will aid in our efforts to reduce the backlog and that the currency rate will start to show a more stable value than its current weakness.
A query regarding the presumptions was raised. I covered a variety of presumptions. The benchmark oil price, which I mentioned for 2024 is 73.96, the daily oil output of 1.7 8 million barrels, and the exchange rate of $700 are all part of the assumptions.
Following that, there was a 21% inflation rate and a 3.76 percent GDP growth rate. The total estimated expenditure for the 2024 budget is 26.01 trillion Naira, which includes N1.3 trillion in statutory transfers, N10.2 6 trillion in non-debt recurrent expenditures, an estimated N8.2 5 trillion for debt service, and N7.78 trillion for personnel and pension costs.
Debt servicing climbed to 22.07 trillion Naira, with the assumption that the nine percent federal government debt would be closely examined.
That works out to be almost 2.1 trillion Naira. This explains how increases in human costs resulted from labor agreements involving transfers.
World Bank loan
During the briefing, Edun, the Minister of Finance and Coordinating Minister of the Economy, stated, “We also approved the World Bank financing application.” Especially the International Development Association, which is the World Bank’s finance and lending arm that offers loans at almost no interest.
There is $1.5 billion in total. And the background is exactly what the Minister of Budget and Planning told you. Interest rates are high in the modern world as the industrialized nations attempt to combat inflation. They achieve this by imposing financial restrictions and maintaining high interest rates in order to reduce inflation. This implies that interest rates for other borrowers become not only exorbitant but also excruciating, if not unaffordable, in that particular situation.
Nigeria has demonstrated the ability to implement macroeconomic policies and make difficult choices to bring about economic equilibrium in the government finances. These actions have earned the country backing from multilateral development banks.
Based on that, the World Bank is prepared to review and handle $1.5 billion in concessional financing—financial that is reasonably priced and will be disbursed swiftly—on our behalf.
“And that was the proposal made to the Federal Executive Council, whose members agreed to move forward with the funding despite the fact that it is reasonably priced.
Second, the Federal Executive Council also approved a financing of $80 million from the African Development Bank.
The Ekiti knowledge zone project, often known as Project EKZ, is the beneficiary of this funding. The main purpose of an EKZ is to assist young people in their pursuit of utilizing technology to their advantage in order to gain employment, training, and benefits associated with being a part of the knowledge economy. This includes participating in Nigeria’s technological wave, which is contributing an increasing amount to the country’s GDP.
In other words, $80 million will be used to support youth in the communications and technology sectors of the knowledge economy.
Roads
“Today we presented a memo on an inherited scope of road infrastructure from the past administration, and the total length of the roads and bridges we inherited was 18,897 kilometers,” stated Engineer Umahi, the Minister of Works, in a briefing.
Additionally, we informed the FEC about several projects that had been granted, some of which had been continuing on for up to 20 years, were abandoned, were still going on without adequate money, and so on. Additionally, there are 24 bridges and 12,000 kilometers of new, important roadways.
“As you are aware, the Federal Executive Council committee, the chief of staff, the minister of finance and coordination of the economy, the minister of works, the minister of budget and planning, and the minister of finance approved the continuation of these inherited projects and the new proposal.
The second item on the list is the coastal road that runs from Phase 1 (Lagos to Port Harcourt to Calabar) to Phase 2 (Sokoto to Ogoja). The project was approved to be completed on EBC + F, or Engineering Procurement and Construction plus Financing. The FEC also received information about the ongoing projects and how to mitigate a great deal of inflation and variation of the projects. Some of the projects that have reached completion will be redesigned on concrete, and going forward, new projects will be done on concrete.
The coastal road that connects Phase 1 (Lagos to Port Harcourt to Calabar) and Phase 2 (Sokoto to Ogoja) is the second item on the list. The completion of the project on EBC + F, or Engineering Procurement and Construction plus Financing, was authorized. Information regarding the ongoing projects, as well as strategies to reduce significant inflation and project variance, was also provided to the FEC. Going ahead, new projects will be completed on concrete, and some completed ones will be redesigned on it.
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