The federal government has earmarked a total of N4.83 trillion out of the proceeds of Nigerian Treasury Bills (NTBs) and Bonds issued in 2024 to settle part of the N7.9 trillion Ways and Means advances received from the Central Bank of Nigeria (CBN), which is approximately N3.07 trillion short of the outstanding advances as of December 2023.
Wale Edun, minister of finance and coordinating minister of the economy, made the disclosure in a paper titled “Reconstructing the Economy for Growth, Investment and Climate Resilience Development”, presented at the recent Lagos Business School Breakfast Club.
Edun noted that in December 2023, Nigeria’s GDP growth was only slightly higher than population growth, by less than 20 basis points (bps). This, according to the Minister, was indicative of the country’s years of sub-optimal growth and productivity.Â
In order to successfully pursue meaningful growth in 2024, Edun said that the country would need to focus on three key areas: increasing oil production to two million barrels per day (mbpd), including condensate;ensuring agricultural sector growth of three per cent, up from 2.1 percent in 2023; and boosting trade activities to support a positive current account balance.Â
To achieve fiscal consolidation, the coordinating minister of the economy noted that the government has set out a robust plan for increasing revenues, with the goal of growing revenue by 78 per cent year-on-year in 2024. However, he pointed out that the effective implementation of the government’s revenue assurance model will be crucial to the success of this plan. He also highlighted the target budget deficit of 3.9 per cent of GDP, which is significantly lower than the 6.1 percent target in 2023.Â
As part of the fiscal consolidation strategy, Edun said that the government is focused on protecting oil revenues, increasing revenue contribution from ministries, departments and agencies (MDAs) and Government Owned Enterprises (GOEs), boosting non-oil revenue, and optimising government assets.
The finance minister also outlined a number of medium-term initiatives aimed at increasing the availability of “sticky” foreign capital. These include presidential executive orders to increase US dollar liquidity, presidential directives in the oil and gas sector, the repatriation of foreign denominated assets into the formal financial sector, and the issuance of foreign-denominated federal government bonds in the local market.Â
Edun outlined a number of specific measures that are scheduled to be implemented in the second quarter of 2024, including tax incentives, exemptions, and remissions for oil and gas companies; increased local content requirements and reduced contracting costs and timelines for the petroleum sector; and other measures aimed at improving the investment environment and attracting more foreign capital.
The minister noted that sustaining trade surpluses will be beneficial to the country’s economic growth, and highlighted that the current account balance was positive in 2023, driven by improved export performance. He added that the government is working on a number of initiatives to further promote regional trade, including harmonising trade policies, enhancing financial systems, and integrating payment systems across the region.
