Introduction
The Federal Government of Nigeria recently presented the 2024 Budget proposal to the National Assembly. The Budget titled “Budget of Renewed Hope” shows a proposed expenditure of NGN27.5 trillion and an estimated revenue of NGN18.32 trillion for the 2024 fiscal year. We have analysed in our infographic a snapshot of the 2024 Budget proposal and its assumptions relative to the 2023 approved and supplementary Budgets.
Following President Bola Tinubu’s submission of a proposed budget of N27.5 trillion for 2024 to the National Assembly (NASS), the Speaker of the House of Representatives, Tajudeen Abbas, has called on Nigerians to contribute more substantively to nation-building and tone down on the criticism of the government.
The budget expenditure for the year as proposed stood at N27.5 trillion, the highest in the history of Nigeria and 10.79% higher than the 2023 revised budget (N24.83 trillion – addition of signed + supplementary budgets). The Budget relies on the key assumptions outlined in Nigeria’s Federal Government’s 2024-2026 Medium-term expenditure framework (MTEF). Revenue projection surged by 65.8% to N18.32 trillion, surpassing the 2023 revised budget of N11.05 trillion.
Expenditure projection rose by 10.3% to N27.5 trillion from the 2023-revised budget. The total expenditure breaks down as Capital expenditure at N7.72trn (28%), recurrent expenditure at N9.92trn (36.1%), and debt servicing at N8.25trn (30.0%). Debt service projection improves to 45.0% of revenue in 2024 from 73.5% in the 2023 budget proposal. The projection for capital expenditure improved by 34.7%, while non-debt recurrent expenditure increased by 19.1%. The total deficit hit N9.18 trillion, about 3.88% of the GDP, marking a shift toward better fiscal management.
The Nigerian Government intends to spend 30 percent of its 2024 budget on debt servicing, allocating less to critical sectors of the economy. The government budgeted N8.25 trillion (30 percent) for debt servicing in 2024 while critical sectors of the economy such as education was allocated N2.18 trillion, and the health sector N1.33 trillion, Infrastructure, defence, social development & poverty reduction were allocated N1.32 trillion, N3.25 trillion and N534 billion respectively in the budget.
The economy is expected to grow by 3.76%, while “inflation is expected to moderate to 21.4 percent in 2024.
Perspicacity from the 2024 Budget (President Bola Tinubu Budget Expectation)
- 2024 Nigeria’s Budget continues to be ambitious and unrealistic in the face of current reality; Revenue and fiscal deficit projections seem unrealistic. The country continues to live in denial as revenue consistently underperforms projections and maintains a slow growth projection while spending surges yearly.
- The 2024 budget intensifies spending to support the economy; As a clear departure from previous budgets, the 2024 budget highlighted how the government intends to support growth and employment. However, there is no mention of sending the Finance Bill 2023 to support the 2024 budget implementation.
- Revenue optimisation and expenditure efficiency; The government needs to implement measures to drive optimisation in revenue mobilisation and block leakages while also getting the best from spending. Others include a re-visitation of the tax structure and procurement to institutionalise effective fiscal space.
Given the enormity of the task ahead, heightened action is needed to galvanise progress. The Proposed programme budget 2024–2025 is aligned with these priorities, which aim to support countries to:
- promote health and well-being and prevent disease, by addressing root causes and creating conditions for good health through multi-sectoral collaboration;
- provide health through a radical reorientation of health systems towards primary health care as the foundation of universal health coverage.
President Bola Tinubu says Nigeria’s national defence and internal security, local job creation, macro-economic stability, investment environment optimisation, human capital development, poverty reduction, and social security are some of the top priorities of the 2024 Budget of Renewed Hope.
He said the proposed budget prioritises human capital development, with particular attention given to children, because human capital remains the most critical resource for national development.
“To improve the effectiveness of our budget performance, the government will focus on ensuring value for money, greater transparency, and accountability. In this regard, we will work more closely with development partners and the private sector.
“To address long-standing issues in the education sector, a more sustainable model of funding tertiary education will be implemented, including the Student Loan Scheme scheduled to become operational by January 2024,” the President affirmed.
Government Budget
Government Budget, Forecast of governmental expenditures and revenues for the ensuing fiscal year. In modern industrial economies, the budget is the key instrument for the execution of government economic policies. Because government budgets may promote or retard economic growth in certain areas of the economy and because views about priorities in government spending differ widely, government budgets are the focus of competing political interests.
According to the International Budget Partnership (IBP), the importance of a country’s budget lies in several factors:
Resource Allocation
The budget helps the government allocate resources efficiently to meet its policy objectives. It reflects the priorities of the government and its commitment to different sectors.
Policy Implementation
The budget serves as a tool for implementing government policies. It outlines the financial resources available for various programs, enabling the government to execute its plans effectively.
Fiscal Discipline
A well-managed budget promotes fiscal discipline by ensuring that government spending does not exceed available resources. It helps prevent excessive borrowing and contributes to economic stability.
Accountability and Transparency
The budget process promotes accountability and transparency in government operations. Citizens can assess how public funds are being used and hold the government accountable for its financial decisions.
Macroeconomic Stability
A balanced budget contributes to macroeconomic stability by avoiding excessive inflation or deflation. It helps maintain a sustainable fiscal policy that supports overall economic health.
Debt Management
The budget plays a crucial role in managing a country’s debt. Governments must consider their borrowing needs and ensure that debt levels are sustainable in the long term.
Investor Confidence
A transparent and well-managed budget enhances investor confidence. It provides insight into the government’s economic policies and its ability to meet financial obligations.
A country’s budget is a fundamental tool for managing its finances, implementing policies, and promoting economic stability. It reflects the government’s priorities, ensures accountability, and influences the overall well-being of the nation.
The 2024 Budget titled “Budget of Renewed Hope” replicates statistically the importance of having an explicit Budget in Nigeria which shows indeed there is hope for a better Nigeria.
By Evulobi Starman Clinton
