Federal Executive Council Approves N27.5 Trillion 2024 Budget

President Bola Tinubu and FEC members

 

 In a session held on Monday, the Federal Executive Council (FEC) gave the nod to a 2024 budget totaling N27.5 trillion. This decision followed an evaluation of the Medium-Term Expenditure Framework, which had initially been approved by the National Assembly with an exchange rate set at N700 to $1 and a crude oil price benchmarked at $73.96 per barrel.

Briefing State House Correspondents shortly after the FEC meeting at the Presidential Villa in Abuja, Minister of Budget and Economic Planning, Abubakar Bagudu, announced adjustments to the Medium-Term Expenditure Framework and Fiscal Policy.

The revised parameters include an exchange rate of N750 to $1 and a benchmark crude oil reference price of $77.96 per barrel. Bagudu further revealed that the FEC endorsed an Appropriation Bill for 2024, reflecting a total expenditure of N27.5 trillion—an increase of over N1.5 trillion from the previous estimate. Notably, utilizing the previous reference prices, the forecasted revenue now stands at N18.2 trillion, surpassing the 2023 revenue, and exhibiting a lower deficit than that of 2023. Meanwhile, the Fiscal Policy and Tax Reform Committee briefed the FEC on its 90-day efforts. Minister of Finance and Coordinating Minister of the Economy, Wale Edun, addressed journalists, highlighting the committee's proposal to eliminate VAT on diesel and aiming to raise the tax revenue-to-GDP ratio to 18 percent, aligning with the African average. Edun also provided updates on a $100 million financing from the African Development Bank (AfDB) and $15 million from the Canada African Development Bank Climate Fund (CACF), inherited from the previous administration.

This concessional borrowing, at around 4.2 percent per annum, is earmarked for waste management and road rehabilitation in Abia State. Furthermore, Edun announced that the AfDB approved $1 billion concessional financing for Nigeria, featuring an eight-year moratorium at about 4.2 percent per annum, acknowledging the economic measures taken and progress toward macro stability. The loan, repayable over 25 years, has a moratorium of eight years and is designated for general budget support. Edun concluded by stating that the FEC has approved a total limit of N2 trillion for the Ministry of Finance, aiming to navigate the market and potentially reduce interest rates on outstanding debt. The objective is to save about 50 billion naira or more in debt servicing over time by refinancing expensive debt with more affordable funding.