Nigeria’s 2024 Budget Sets Ambitious Benchmarks Amidst Calls for Fiscal Prudence
Amid foreign exchange market fluctuations, the Federal Government has unveiled its ambitious 2024 budget, with a crude oil price benchmark of $73.96 per barrel and an exchange rate of N700 to the dollar.
The budget, amounting to N26 trillion, is set to be submitted to the National Assembly before December 31, 2023.
During a briefing after a Federal Executive Council (FEC) meeting presided over by President Bola Tinubu, Minister of Planning and Budget, Atiku Bagudu, disclosed these details.
The government is committed to adhering to the January to December budget cycle, aiming to present the 2024 appropriation bill for ratification before year-end.
The 2024-2026 medium-term expenditure framework (MTEF) and fiscal strategy papers (FSP) have also gained approval from the Council.
This framework outlines an estimated aggregate expenditure of N26.01 trillion for the 2024 budget. This includes provisions for statutory transfers, non-debt recurrent expenses, debt servicing, and personnel pension costs.
What’s striking is the fiscal assumptions made by the government in light of macroeconomic stability measures, such as petroleum price deregulation and foreign exchange market regulation.
This marks a notable shift in response to the ongoing forex challenges and inflation.
In another move, the Federal Government has secured financing from the World Bank and the African Development Bank (AfDB).
The World Bank will provide $1.5 billion in concessional financing, aimed at supporting Nigeria’s efforts to restore economic balance and promote prudent financial management.
Nigeria’s macroeconomic reforms have garnered the support of these multilateral development banks.
The AfDB is set to offer $80 million in financing for the Ekiti Knowledge Zone project, which seeks to empower young individuals by enabling their engagement in the knowledge economy and technology sector.
This funding reflects the government’s commitment to nurturing the country’s tech-savvy youth.
However, the decision to seek additional financing raises concerns, given the country’s growing debt burden. Nigeria’s total public debt has surged to N87.38 trillion, prompting caution from financial stakeholders.
The Debt Management Office (DMO) had earlier cautioned that the government’s projected revenue of N10 trillion for 2023 might not support further borrowing.
Yet, the International Monetary Fund (IMF) views Nigeria’s total public debt as manageable, emphasizing that the primary concern is the rising cost of debt servicing.
This shift in fiscal policy reflects Nigeria’s ongoing effort to find a balance between economic stability and sustainable development.
As the government charts this ambitious budget course, it remains to be seen how these macroeconomic moves will impact Nigeria’s fiscal landscape and address the pressing issues in a nation striving for financial equilibrium.
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