FG proposes N26 trillion for 2024 budget, assumes “boost to exchange rate and expected inflow

The federal government is proposing a N26 trillion budget for the 2024 fiscal year. This was announced at the end of the Federal Executive Council (FEC) meeting held on Monday, at the presidential villa, in Abuja.

This compares to the N21.8 trillion budget currently running and approved under the administration of President Muhammadu Buhari.

The budget will be submitted to the National Assembly before December 31, according to Atiku Bagudu, the Minister of Planning and Budget.

Speaking to State House Correspondents in Abuja after the Federal Executive Council (FEC) meeting, Minister Bagudu highlighted the government’s commitment to presenting the budget to the National Assembly before the end of the year.

He further noted that President Bola Tinubu is actively engaging with the legislative arm to secure their support and approval for this monumental budget.

The central focus of the 2024 budget is to consolidate the various economic reforms initiated by the current administration. These reforms are aimed at improving the standard of living for Nigerians and attracting much-needed foreign investments into the country.

Assumptions of the budget

One of the key assumptions underpinning this budget is the expectation of improved inflow and a boost in the exchange rate.

These assumptions are rooted in the various diplomatic engagements undertaken by President Bola Tinubu and other government officials.

These engagements are crucial to Nigeria’s efforts to strengthen its economic position on the global stage.

It appears the government is banking on foreign investment to help boost its capital inflows and strengthen its exchange rate. It is also unclear what the connection is.

Optics

Going by the performance of the 2022 budget, it is unclear how the government plans to fund a massive N26 trillion budget if this is what it eventually submits.

A recent Nairametrics report suggests the Federal Government ended 2022 with a fiscal deficit of N7.5 trillion or 129% of actual revenue collected.

The government had budgeted a revenue of N9 trillion and a deficit of N5.2 trillion. The federal budget for 2022 was N14.2 trillion (exclusive of GOEs and project-tied loan expenditures)

According to data from the budget office, the federal government received a total revenue of N5.8 trillion down from N6.7 trillion received in the same period in 2021.

The federal government also ran a budget deficit of N4.3 trillion in the first quarter of 2023 vs Budget if N2.2 trillion.