President Bola Ahmed Tinubu says 2024 will begin to see the recovery of the nation from the economic difficulties. In his budget speech to the national assembly, the President said his administration will work to reduce inflation and deliver on Security, Job Creation and Poverty Reduction. This is as he admitted in his Christmas speech that, “This year (2023) has been a time of transformation and relentless change in our country. And I am aware that the necessary reforms we are implementing to achieve a more prosperous, peaceful nation for all have imposed unique sacrifices.”
In his budget presentation, President Tinubu said that Nigeria’s national defence and internal security, local job creation, macro-economic stability, investment environment optimization, human capital development, poverty reduction, and social security are some of the top priorities of the 2024 Budget of Renewed Hope.
Among others he promised that, “To improve the effectiveness of our budget performance, the 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.”
On the fundamentals, Tinubu said: “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, our primary objective 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. Emphasizing public-private partnerships, we have strategically made provisions to leverage private capital for big-ticket infrastructure projects in energy, transportation, and other sectors. This 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.
The President said a conservative oil price benchmark of 77.96 U.S. Dollars per barrel and a daily oil production estimate of 1.78 million barrels per day were adopted after a careful review of global oil market trends, and that a Naira to U.S. Dollar exchange rate of 750 naira per U.S. Dollar was adopted for 2024 as well. Giving a breakdown of the 2024 Appropriation Bill, the President said: “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. The 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 represented 6.11 percent of GDP. The deficit will be financed by new borrowings totaling 7.83 trillion naira, 298.49 billion naira from Privatization Proceeds, and 1.05 trillion naira draw down on multilateral and bilateral loans secured for specific development projects.”
President Tinubu said his administration remains committed to broad-based and shared economic prosperity, adding: “We are reviewing social investment programmes to enhance their implementation and effectiveness. In particular, the National Social Safety Net project will be expanded to provide targeted cash transfers to poor and vulnerable households.”
Among some of the key items, the administration plans to use PPP to finance infrastructure, Amid plans for huge IGR, fresh loans and sale of national assets.
In the budget breakdown, the Minister of Budget and National Planning, Abubakar Bagudu, said “The 2024 Appropriation has been themed the Budget of Renewed Hope. The proposed budget 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.” He added that the focus is on security, and infrastructure, among others.
“Defence and internal security 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 prioritizes human development with particular attention to children, the foundation of our nation.”
While presenting the budget, Bagudu stated that N50bn of the amount would be for the student loan scheme of the Federal Government. However, no details have emerged on how the scheme would work.
Bagudu stated, “Equally on infrastructure spending, part of the instruction of Mr President to the cabinet is that as he has done in Lagos, we have to bring in private sector investments into infrastructure. He has mandated all ministries to examine how to access investors who are willing to put money into infrastructure. What the government can put into infrastructure is small compared to what the private sector can bring. So, a number of roads and railways, airports, housing and a number of infrastructure projects will be considered. The government funding is to capitalise private investment.”
On tax revenues, President Tinubu in his speech said, “We are currently reviewing our tax and fiscal policies. Our target is to increase the ratio of revenue to GDP from less than 10 per cent currently to 18 per cent within the term of this Administration. The government will make efforts to further contain financial leakages through effective implementation of key public financial management reforms.”
Finance minister and Coordinating Minister for the Economy, emphasised the reduction in budget deficit, though this is still high at about the same as that of 2023: “The budget deficit is being brought down to about from 6.1 per cent to 3.8 per cent of GDP. That is a huge change in direction from unlimited borrowing to focusing on revenue and expenditure management. There will be value for money on expenditure and increased revenue. The key target is to increase tax to GDP from under 10 per cent to 18 per cent in a couple of years. That target, a hugely ambitious one is what we need to meet to reduce reliance on borrowings.”
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