FG increases 2024 budget to N27.5trn

The Federal Executive Council (FEC) has approved a N27.5 trillion budget for 2024, despite the challenges of debt financing and low economic growth.

The budget details are expected to be presented to the National Assembly by President Bola Tinubu tomorrow, according to the Secretary of Research and Information at the National Assembly, Dr Ali Barde Umoru.

The budget is based on the 2024 – 2026 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), which was passed by the parliament last week.

However, the budget raises some questions about the government’s fiscal policy and economic vision.

For instance, the Finance Minister, Wale Edun, had promised that the government would not rely on debt financing but would explore creative options for public financing. But the MTEF shows that the government plans to borrow over N9 trillion to fund the 2024 budget, which could be difficult given the current international debt market, the Central Bank of Nigeria’s (CBN) stance on ending reckless and cheap budget supports and the high cost of local borrowing.

The budget also falls short of the level of expenditure required to achieve President Tinubu’s ambitious goal of growing the economy to $1 trillion in the next seven years. Nigeria’s output peaked at $570 billion in 2014 but declined to $390 billion last year. The N27.5 trillion budget translates to a per capita spending of N127,000, or about $150 (using the official exchange rate). This is much lower than South Africa’s $2400 and Egypt’s $1500 per capita budget as of two years ago.

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