President Bola Ahmed Tinubu will borrow N7.8 trillion to fund the 2024 budget projected at N26 Trillion.
The sum of N8.2 trillion has been earmarked to service debt in the budget which will be presented to the National Assembly very soon.
This is contained in the report of the joint senate committees on Finance, Appropriation, National Planning, Economic Affairs and Local and Foreign Debt, presented by the Chairman Sani Musa during plenary.
The report presented for consideration on the floor of the Senate , revealed that the Federal government projected the reduction in inflation from 27.33 % to 21.4% in 2024, 20.30% in 2025 and 18.60 in 2026.
The Senate has ordered investigation into all waivers from 2015 till date and directed that all waivers not directly linked to non-governmental/non-profit organizations should not be granted.
According to lawmakers despite the deficit budget, the proposed tax waivers to be granted in 2024 is N2.7trillion , 2025 is N3.2Trillion and 2026 N 3.8 Trillion which constitues 30% of the total fiscal deficits for 2024, 31% for 2025,and 32% for 2026.
The total budget for the 2024 will be N26 trillion with N16.9 trillion in retained revenue, N243.6 billion for the sinking fund , the statutory transfer for the budget will be N1.3 trillion, N1.2 trillion in pension gratuity and retirees benefits.
The total recurrent (non-debt) of N10.2 trillion, personal cost of MDAs- N4.49 trillion, capital expenditure (exclusive of transfers ) of N5.9 trillion, special Intervention (recurrent) of N200 billion and special Intervention capital of N7 billion comprise the aggregate of Federal government expenditure of N26 trillion.
The report reads, ” Following the criteria in the overview of the framework for revenues and expenses, which forms the basis of the 2024 FGN budget proposed spending N26 trillion, of which N16.9 trillion was retained, new borrowings of N7.8 trillion (including borrowing from foreign and domestic), debt service to revenue ratio of 49%, pension, gratuities, and retiree benefits of N12 trillion, and a fiscal deficit of N9 trillion (including GOES).
The oil benchmark is pegged at $73.6 per barrel with daily production of 1.78 million barrel per day with exchange rate of N700 to $1, GDP growth rate of 3.76% for 2024.
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The Senate notes that the projected N16.96 trillion revenues to the federal government for the 2024 fiscal year is attainable with effective revenue monitoring exercise and oversight by the relevant Committees of the National Assembly.
It added that the projected fiscal deficit of N9.048 trillion, proposed for the 2024 fiscal year is 22%, lower than the N11.6 trillion fiscal deficit for the year 2023.
The Senate also recommends the sum of 10 billion to be released by the Ministry of Finance for the proposed NIPOST restructuring.
The committee chairman re-echoed that the proposed strategy for the government in 2024 towards deficit financing is to increase funding from privatization proceeds and foreign borrowing as well as reduce funding from multilateral and bilateral project-tied loans, and domestic borrowing
He concluded that the Federal Government’s commitment to progressively restructure its debt portfolio towards achieving a balanced domestic-to-external debt ratio is evident in the 2024-2026 MTEF and FSP
The lawmaker also noted that a significant number of the Federal Government’s Revenue- Generating Agencies are engaged in arbitrary, frivolous and extra-budgetary expenditures.
(Editor : Ena Agbanoma)
