Home News 2024 budget: FG eyes N10.4tn tax as defence, education, roads get N6.7tn

2024 budget: FG eyes N10.4tn tax as defence, education, roads get N6.7tn


The President Bola Tinubu-led administration is planning to spend N6.75tn of its projected N27.5tn budget on defence and security, education, and infrastructure in 2024.

This is as it earmarked N6.48tn (96 per cent of the amount to be spent on the three sectors mentioned above) for personnel and pension, an increase of N576.16bn over the 2023 provision. The administration is also eyeing N10.4tn from tax, dividends and others.

The Minister of Budget and National Planning, Abubakar Bagudu, disclosed this during the presentation of the 2024 budget breakdown on Wednesday.

Earlier, while presenting the 2024 Appropriation Bill, themed ‘Budget of Renewed Hope’ on the floor of the National Assembly on Wednesday, Tinubu said the budget proposal was aimed at completing critical infrastructure projects that would help address structural problems in the economy while lowering the costs of doing business for companies and the cost of living for the average Nigerian.

In his presentation, he declared, “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.”

Tinubu noted that the government expects the country’s economy to grow by a minimum of 3.76 per cent (GDP as of the end of September 2023 was 2.54 per cent) despite the current inflationary headwinds which are expected to moderate to 21.4 per cent in 2024. Inflation was 27.33 per cent as of the end of October.

Highlighting the components of the 2024 budget proposal, he said, “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 per barrel and daily oil production estimate of 1.78 million barrels per day.

“We have also adopted a Naira to US Dollar exchange rate of N750/$ for 2024. Accordingly, an aggregate expenditure of N27.5tn is proposed for the Federal Government in 2024, of which the non-debt recurrent expenditure is N9.92tn while debt service is projected to be N8.25tn and capital expenditure is N8.7tn.”

According to the analysis, funding to the education sector (N2.18tn) is 101.85 per cent more than the N1.08tn that was budgeted for the sector in the 2023 appropriation.

Of the amount, N1.23tn is for the Federal Ministry of Education and its agencies, N251.47bn for the Universal Basic, Education Commission, and N700bn as transfers to tertiary education trust fund.

While presenting the budget, Bagudu stated that N50bn of the amount would be for the student loan scheme of the Federal Government.

Funding to the defence and security sector (which includes the military, police, intelligence, and paramilitary) increased by 46.39 per cent to N3.25tn from the N2.22tn that was earmarked in 2023’s appropriation for the defence and police affairs ministries.

Based on the document presented by the minister of budget, the allocation to the health sector improved by 23.15 per cent to N1.33tn from N1.08tn in the 2023 appropriation.

Of the amount, N1.07tn has been provisioned for the federal ministry of health and its agencies, N137.21bn for Gavi/immunisation funds, including counterpart funding for donor-supported programmes, and N125.74bn as transfer to basic healthcare provision fund.

Additionally, N1.32tn will be expended on the provision of infrastructure in the power, transport, water resources, aviation, works and housing sectors. Explaining reasons for the low provisions, the former Kebbi governor said the president had directed for increased private sector involvement in infrastructure provision.

He revealed that all ministries have been given matching orders to woo willing domestic and foreign investors to improve the nation’s infrastructure.

Bagudu stated: “Equally on infrastructure spending, part of the instruction of Mr President to the cabinet is that as he has done in Lagos, we have to bring in private sector investments into infrastructure. He has mandated all ministries to examine how to access investors who are willing to put money into infrastructure. What the government can put into infrastructure is small compared to what the private sector can bring.

“So, a number of roads and railways, airports, housing and a number of infrastructure projects will be considered. the government funding is to capitalize private investment.”

Also, N534bn has been budgeted for social investments and poverty reduction programmes in 2024. The government expects to spend N10.26tn on non-debt recurrent expenditure, N8.25tn on debt servicing, N243bn on sinking funds, and N8.70tn on capital expenditures.

The minister further noted that the 2024 budget was prepared amidst the backdrop of a challenging global and domestic economic environment.

He declared, “This Prevailing global environment is characterized by slowing global growth; persistent inflationary pressures prompting monetary tightening with the inherent negative impact on capital inflow to emerging markets economies.

“Also constrained investment spending; supply-chain disruptions; and rising geo-political tensions, including the Russia and Ukraine war have severely affected global food and energy prices.”

While giving insights on the performance of the 2023 budget, Bagudu stated that Federal Government has gotten N8.65tn in revenues as of September 2023 with an oil revenue of N1.42tn and non-tax revenue of N2.50tn

Bagudu stated that the estimated aggregate expenditure for 2023 (inclusive of the supplementary budget) is N24.82 trillion, but actual spending has been N13.7tn.

Earlier in the day, President Bola Tinubu presented the budget of N27.5tn to a joint section of the National Assembly while urging firms in the country to join in infrastructure development across the country.

This is coming a few days after the Federal Executive Council approved the 2024 Appropriation Bill of N27.5tn, an increase from the N26.01tn earlier considered, and a $1bn budget support loan from the African Development Bank.

At the time, Bagudu also announced that some parameters of the recently approved Medium Term Expenditure Framework by the Senate had been changed by FEC.

He said: “That approved Medium Term Expenditure Framework has the exchange rate of N700 to $1 and equally, the benchmark crude oil price at $73.96 cent.

“However, in Mr. President’s determination to find more money to fund our priorities, today the Federal Executive Council further revised the Medium-Term Expenditure Framework and Fiscal Policy Framework and two of the important decisions were to use an exchange rate of N750 to $1 and also a benchmark crude oil reference price of $77.96, meaning $4 more than the earlier approval.”

According to the president, the country remains committed to meeting its debt obligations with projected debt service at 45 per cent of total expected total revenue.

He said: “Budget deficit is projected at N9.18tn in 2024 or 3.88 per cent of GDP. This is lower than the N13.78tn deficit recorded in 2023 which represents 6.11 per cent of GDP. The deficit will be financed by new borrowings totalling N7.83tn, N298.49bn from privatisation proceeds and N1.05tn drawdown on multilateral and bilateral loans secured for specific development projects.”

The president, however, noted that the government is challenged when it comes to funding. According to him, “in view of the limited resources available through the federal budget, we are 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.”

To fund its budget, the Federal Government expects to make N18.32tn as revenue. N7.94tn is supposed to come from oil-related sources, and the balance of N10.39tn is projected to be from non-oil-related sources. Projected independent revenue is expected to be N1.9tn, grants and donor-funded projects N685.63bn, and dividends from NLNG, Bank of Industry, Development Bank of Nigeria, Galaxy Backbone, and Bank of Agriculture are projected at N357.92bn.

Commenting on the need to boost tax revenues, President Tinubu in his speech said: “We are currently reviewing our tax and fiscal policies. Our target is to increase the ratio of revenue to GDP from less than 10 per cent currently to 18 per cent within the term of this Administration. The government will make efforts to further contain financial leakages through effective implementation of key public financial management reforms.”

Meanwhile, the Minister of Finance and Coordinating Minister for the Economy, Wale Edun, in his remarks said the budget projections are based on realistic assumptions and can be implemented to stabilise the Nigerian economy for rapid inclusive growth.

He spoke during the public presentation of the federal government of Nigeria’s 2024 budget proposal held at the finance ministry headquarters on Wednesday in Abuja.

He affirmed the budget will be executed with less reliance on borrowings but promote domestic and foreign investment and privatisation of critical government assets. He said, “The budget is N27.5tn and what I think is critical is that this budget is based on assumptions which are realistic.

“It is based on projections which I think is okay to the average person and reasonable. Therefore, it is something that we can expect to be successfully implemented. The breakdown of different elements shows the direction of this administration in order to stabilize the Nigerian economy for rapid inclusive growth. There is going to be less reliance on borrowing.

“The budget deficit is being brought down to about from 6.1 per cent to 3.8 per cent of GDP. That is a huge change in direction from unlimited borrowing to focusing on revenue and expenditure management. There will be value for money on expenditure and increased revenue. The key target is to increase tax to GDP from under 10 per cent to 18 per cent in a couple of years. That target, a hugely ambitious one is what we need to meet to reduce reliance on borrowings.”

He highlighted that debt service as a proportion of revenue is expected to fall with the government expected to boost the economy through the inflow of domestic and foreign investment.

He added: “As you have heard from the president, There will be privatisation, private-public partnerships, and Internally Generated Revenue to improve on revenue.”

Despite this reduction in deficit to GPD, the Federal Government noted that the high projected level of fiscal deficit in 2024 is partly due to the proposed salary review of federal workers across the board, increased pension obligations, and higher debt service costs.

Lawmakers across the various party lines lauded the president’s budget, especially its attempt to reduce the budget deficit. Senator Jimoh Ibrahim (APC, Ondo South), said, “We have a budget of N9.7tn current expenditure and N8.7tn capital expenditure.

“For the first time, we have a budget that is not all going into the payment of salaries. This is even more than the 30 per cent benchmark in the last 10 years of having a budget presentation where 25 per cent is used for capital projects and the rest is spent on expenditure. Now the recurrent expenditure and capital project are very close.

“45 per cent debt servicing is not bad except that we have to borrow more remember last year debt to GDP was about six per cent but now debt to GDP is three per cent. We have a deficit financing of N8.7tn and that means that we are going to fund that on external borrowing.”

Buttressing his colleague, Chairman of the Senate Committee on Appropriations, Solomon Adeola, (APC, Ogunjobi West) stated that this was the budget that would benefit the country.

Adeola stated: “We have a budget whose deficits going down and the capital expenditure is going up. That shows that for the first time, we are having a paradigm shift and this we believe is going to continue.

“I believe this is a step in the right step and the president has also emphasised the issue of revenue-generation drive. What stood out for us is the issue of revenue to ensure that the budget can be well-funded. The president has done so well on the issue of revenue funding.”

Also, the Chairman Senate Committee on Public Account, Aliya Wadada (SDP, Nasarawa South) said, “It is obvious the President’s agenda is a people-oriented budget.”

Senator Sani Musa, Chairman Senate Committee on Finance, added: “We never had it so good in the budget presentation where the capital expenditure has been raised to about N8tn and though the deficit has increased, the debt servicing has reduced.

“We are looking at making the dollar N750 instead of 700, which means we are going to get more revenue from that. The crude oil price has been increased from $73 to more than $76, which is good. In a nutshell, you can see that the budget is different from the previous ones that we have had where the debt servicing is far more than the capital budget.

“Now the capital budget has been raised to N8tn, which is unprecedented. I believe this budget will handle the renewed hope of Nigerians.”

At the adjourning of the plenary, the Senate President, Godswill Akpabio, noted that the budget would be passed “between Thursday and Friday after which the plenary would be adjourned till December 12. “

He added: “The adjournment will enable lawmakers in each committee to entertain MDAs for their respective budget defence.”

In the same vein the spokesperson of the House of Representatives, Hon Akin Rotimi stated that lawmakers were very impressed by the President’s budget. He said, “The National Assembly is going to scrutinise the budget and we hope that we will be able to pass it in the next few weeks.

“The budget is coming in good time to allow us a good time to allow for it to be passed December 31. We are going to have a budget town hall to ensure that the budget is people-oriented. We would have a town hall where Nigeria can have a say.”

The opposition party has kicked against the actions of lawmakers when the president was in the house. When the President arrived at about 11:09 am, the national anthem was recited, led by the military band.

Thereafter, lawmakers at various angles in the chamber shouted ‘jagaban” to which the president responded with his hand for them not to turn the session into a rowdy one. After welcoming the opening prayer and, Akpabio’s speech, the military band led the song, ‘On you mandate we shall stand…” The song was accompanied by the voices of the lawmakers who shouted, “Bola… On your mandate, on your mandate.”

According to the Chief Spokesman of the Labour Party Campaign Organisation, Yunusa Tanko, the song was a subtle attempt by the APC to force Nigerians to accept Tinubu’s ‘illegitimate’ presidency.

He said: “The APC government is battling with legitimate issues. They also know that the judiciary has aided them in that illegality. What their members are also doing in the National Assembly is to stamp that same illegality down the throats of the Nigerian people.

“Most of those you found singing Tinubu’s anthem are members of their party, meaning that they know he does not have the legitimacy of being the president of the Federal Republic of Nigeria.”

On its part too, the Peoples Democratic Party condemned the 2023 rendition of the All Progressives Congress.

The PDP in a statement by its National Publicity Secretary, Debo Ologunagba, said, “This condemnable episode validates the concerns of the PDP as expressed on several occasions, the latest being on Wednesday, November 15, 2023, where our Party raised alarm and cautioned that our nation is dangerously sliding into cronyism and totalitarianism under the Tinubu-led APC administration.

“The National Assembly is the symbol of the collective sovereignty of the Nigerian people which cannot be appropriated by or surrendered to any individual or cabal under any guise or circumstance whatsoever.”

However, the National Director of Publicity for the APC, Bala Ibrahim, believed the backlash over the anthem was unnecessary since Tinubu’s budget presentation was an extension of the said ‘mandate.’

He said: “I don’t know the tradition of the National Assembly whether it is a misnomer for people to chant ‘On your mandate’ when the president is emphasizing the importance of his mandate. It is the slogan of the administration.

“This is not the first time the president has gone into the Assembly and his anthem sang. I have seen him go into the hallowed chamber when he was contesting the election, and that anthem was sung all through on the floor of the Assembly. But I won’t know if it is a misnomer to sing it now that he has become president.”



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