Nigeria to spend N1.2trn more in fiscal 2024 with N28.7trn budget

• Federal MDAs needed make-up funding

• Ministry of Defence @ N1.31trn; Ministry of Police Affairs @ N869.12bn; Ministry of Education @ N857.13bn top allocation list 

Business a.m

Nigerian lawmakers meeting as two chambers of the National Assembly approved the 2024 federal Appropriation Bill ahead of the close of the calendar year 2023, choosing to increase the initial budget of N27.5 trillion proposed by President Bola Tinubu to N28.7 trillion.

In addition to the passage of the jerked budget, the senate also approved President Tinubu’s request to borrow $7.8 billion and €100 million as part of the 2022-2024 borrowing plan of the federal government. The approval also included the securitisation of the outstanding debit balance of N7.3 trillion in the federal government’s Consolidated Revenue Fund (CRF), expected to boost the government’s financial position and help achieve its development goals.

The Senate passed the budget bill at a special plenary  session, after Solomon Adeola, the chairman of the senate committee on appropriation, presented his committee’s report, which was unanimously approved by the lawmakers. Adeola explained that the committee relied on the Medium-Term Expenditure Framework and Fiscal Paper (MTEF/FSP), which was approved by the National Assembly, in drafting the budget.

According to the bill, the total amount of expenditure for the fiscal year is N28,777,404,073,861, while statutory transfers amount to N1,742,786,788,150. The bill also includes N8,768,513,380,852 for recurrent expenditure and N9,995,143,298,028 for capital expenditure. In addition, the bill projects a GDP growth rate of 3.88 percent.

Furthermore, the committee adopted an oil benchmark of $77.96 per barrel, an output of 1.78 million barrels per day, and an exchange rate of N800 to the dollar, deviating from the N750 proposed by the executive. In terms of key figures, the bill has a total aggregate expenditure of N28.7 trillion, N1.7 trillion in statutory transfers, N8.7 trillion in recurrent expenditure, and N9.9 trillion in capital expenditure.

The committee chairman explained that the N1.2 trillion increase in the budget was due to additional funding requests for items that were not originally included in the Appropriation Bill as submitted by President Tinubu. The joint National Assembly Committee on Appropriation noted that some MDAs of the federal government had inadequate funding in their budgets, which could negatively impact their ability to function effectively.

In addition to highlighting the need for additional funding, the chairman of the senate committee also noted the executive’s late submission of the 2024 Appropriation Bill, which violated the provisions of the Fiscal Responsibility Act (FRA). The FRA stipulates that the budget should be submitted to the National Assembly at least three months before the beginning of the next financial year.

In a similar move, the House of Representatives also approved a total expenditure of N28.777 trillion for the 2024 fiscal year after Abubakar Bichi, the chairman of the House Committee on Appropriation presented and defended the committee’s report.

According to the report’s breakdown presented by Tajudeen Abbas, the Speaker of the House of Representatives, the N28.777 trillion approved is N1.2 trillion higher than the N27.504 trillion originally presented by President Tinubu during the joint session of the National Assembly on November 29, 2023. The increase, he explained, was due to inflation and an exchange rate increase from N750 to N800. Abbas added that government-owned enterprises agreed to increase their revenues, which contributed to the higher total expenditure.

The Speaker further noted that the 2024 budget was the first time that capital expenditure was higher than recurrent expenditure. As for the breakdown of the N28.777 trillion approved budget, N1.743 trillion will be allocated to statutory transfers, N8.271 trillion to debt service, N8.769 trillion to non-debt recurrent expenditures, and N9.995 trillion to capital expenditures. The N9.179 trillion fiscal deficit for the year is to be financed through asset sales/privatisation (N298,486,421,740), multilateral/bilateral project-tied loans (N1,051,914,486,314), and debt financing (N7,828,529,477,860).

Regarding the N8.271 trillion in debt service approved for the year 2024, N5.3 trillion will be spent on domestic debts (including Ways and Means), N2.748 trillion on foreign debts, and N223.662 billion on the sinking fund to retire maturing promissory notes.

The budget includes N341.626 billion for the National Judicial Council (NJC), N338.925 billion for the Niger Delta Development Commission (NDDC), N263.044 billion for the Universal Basic Education Commission (UBEC), N131.836 billion for the North East Development Commission (NEDC), N131.522 billion for the Basic Healthcare Provision Fund (BHPF), N131.522 billion for the National Agency for Science and Engineering Infrastructure (NASENI), N14.460 billion for the Public Complaint Commission (PCC), and N5 billion for the National Human Rights Commission (NHRC).

Under the budget’s recurrent (non-debt) expenditures, the Ministry of Defence received the highest allocation of N1.308 trillion, followed by the Ministry of Police Affairs (N869.121 billion), the Ministry of Education (N857.134 billion), the Ministry of Health and Social Welfare (N667.577 billion), the Ministry of Interior (N362.552 billion), the Ministry of Youth (N201.467 billion), the National Security Adviser (N199.763 billion), the Ministry of Foreign Affairs (N140.456 billion), the Ministry of Agriculture and Food Security (N110.248 billion).

The appropriation bill  included details on the federal government’s share of gross federation revenues, which amounted to N12,739,069,984.307, while deductions totalled N1,502,632.513,940. The bill further stipulated that the federal government’s share of net federation revenues is N11,236,437,470,367, while independent revenues were estimated at N1,907,775,748,763. Additionally, the bill provided for other dividends totalling N357,923,133.707.

The bill also included information on aid and grants, which were estimated at N685,632,294,000; social fund/account receipts, which were estimated at N300,000,000,000; and government-owned enterprises (net of operating surpluses), which were estimated at N3,645,080,469,662.