Nigerian President Bola Tinubu says the Federal Government is to fund the items needed to restore macroeconomic stability and mitigate the harsh impact of subsidy removal in Nigeria.
He made the remark when he presented the 2024 Appropriation Bill to the joint Session of the National Assembly, in Abuja.
He said that he was confident that the National Assembly will continue to work closely with us 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.
“Distinguished Senators and Honourable Members of the National Assembly, I commend your 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. We do not serve ourselves. We must always strive to work together to serve and benefit the people of our beloved country”.
It is, by now, a matter of recorded history that 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
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 were attempting to draw water from a dry well. Today, I stand before you to present our Budget of Renewed Hope; a budget which 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. The budget we now present constitutes the foundation upon which we shall erect the future of this great nation.
PREVAILING ECONOMIC ENVIRONMENT
The president said that economic conditions remain challenging both abroad and at home.
” Distinguished Senators, Honourable Members: despite the global headwinds, the Nigerian economy has proven resilient, maintaining modest but positive growth over the past twelve months. Inflation has trended upward due to weak global conditions. To contain the rising domestic prices, we will ensure effective coordination of fiscal and monetary policy measures, and collaborate with sub-national governments to address structural factors driving inflation in Nigeria”, he said.
He noted that “The Budget proposal meets our goal of completing critical infrastructure projects which will help address structural problems in the economy by lowering the costs of doing business for companies and the cost of living for the average person, The Honourable Minister of Budget and Economic Planning will provide full details of this proposal”.
PERFORMANCE OF THE 2023 BUDGET
The president also said that 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”.
THEME AND PRIORITIES OF THE 2024 BUDGET
The president highlighted key issues relating to the budget proposals for the next fiscal year.
” 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.
“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.
” 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, 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”, he said.
President Tinubu noted that the revised 2024-2026 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) set out the parameters for the 2024 Budget.
“After a careful review of developments in the world oil market and domestic conditions, we have adopted a conservative oil price benchmark of 77.96 US Dollars per barrel and a 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”. He noted.
He poinyed out that Nigeria remains committed to meeting its debt obligations and that 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 Privatization Proceeds and 1.05 trillion naira drawdown on multilateral and bilateral loans secured for specific development projects”, he said.
The President also said, “Our government remains committed to broad-based and shared economic prosperity. 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. In addition, efforts will made to graduate existing beneficiaries toward productive activities and employment. We are currently reviewing our 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”, he said.
He also said that in view of the limited resources available through the federal budget, the government is 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.
“Distinguished Senators and Honourable Members, this Budget presentation would be incomplete without commending the patriotic resolve of the 10th National Assembly to collaborate with the Executive on our mission to renew hope and deliver on our promises to the Nigerian people. I assure you of the strong commitment of the Executive to sustain and deepen the relationship with the National Assembly.
“As you consider the 2024 Budget estimates, we trust that the legislative review process will be conducted with a view to sustaining our desired return to a predictable January-December fiscal year.
” I have no doubt that you will be guided by the interest of all Nigerians. We must ensure that only projects and programs with equitable benefits are allowed into the 2024 Budget. Additionally, only projects and programs that are in line with the sectoral mandates of MDAs and which are capable of realizing the vision of our Government should be included in the budget.
As a Government, we are committed to improving the lot of our people and delivering on our promises to them. The 2024 Budget has the potential to boost performance, promote the development of Micro, Small and Medium-sized Enterprises, enhance security and public safety, and improve the general living conditions of our people”, President Tinubu added.
In his remarks, the Senate President, Godswill Akpabio called for the unbundling of government agencies for effectiveness and reduction of expenditure.
He also said that a mono economic is a risk that has been taken for too long and needs to be changed.
The Senate President also noted that the legislature will always stand with the people of Nigeria and defend their rights.
On his part, the Speaker of the House of Representatives, Hon Tajudeen Abbas said that it was a well-known fact that millions of Nigerians are living through incredibly difficult times.
He said that the people were also looking to the Tinubu-led government to provide quick and sustainable solutions.
” The antecedents of the President and your track record in governance inspire a lot of hope in Nigerians. 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.
Accordingly, the budget laid before us today 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 order to promote economic growth and development, the 2024 Budget should prioritise social welfare programmes to help reduce poverty and inequality. Equally important is job creation and youth empowerment in view of the large and ever-growing youth population. 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. In view of this and the related challenge of a high level of public debt, the National Assembly will ensure that the 2024 budget includes concrete strategies for sustainable debt management, including measures to increase revenue and control expenditure. Specifically, the focus should be on raising more revenue through tax reform, fiscal reform, subsidy reform, foreign exchange convergence, and centralised revenue collection. In our recent engagement with MDAs on the MTEF, we emphasised the need for revenue-generating agencies to double their targets to meet the N18trn revenue projected in the budget”, he said
The Speaker called for the need for budget reforms, including altering relevant sections of the Constitution and existing laws to strengthen the budget process and transform our budget into an authentic tool for development.
He expressed the assurances of the 10th Assembly to work with the president to ensure that he succeeds and that Nigeria succeeds.
Dominica Nwabufo
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