2024 budget: FG projects 33.5% reduction in budget deficit

The federal government has projected a N4.60 trillion decline in the budget deficit for the 2024 fiscal year.

This represents a 33.5% reduction when compared to the 2023 budget.

President Tinubu disclosed this during his presentation of the 2024 appropriation bill to the joint session of the National Assembly.

In the 2024 budget proposal, the deficit was projected at N9.18 trillion while that of 2023 was N13.78 trillion. This represents a drop of N4.60 trillion for the 2024 fiscal year.

In terms of deficit to GDP ratio, there was a reduction of 2.22% in the deficit to GDP ratio in the 2024 budget. While the deficit to GDP ratio of the 2024 budget stands at 3.88%, that of the 2023 budget was 6.1%.

The President stated thus, “Nigeria remains committed to meeting its debt obligations. Projected debt service is 45% of the expected total revenue.”
“Budget deficit is projected at 9.18 trillion naira in 2024 or 3.88% of GDP. This is lower than the 13.78 trillion naira deficit recorded in 2023 which represents 6.11% of GDP.”

Sources of funding for budget deficit

On the sources of funding for the budget deficit, the President stated that new borrowings, revenues from privatisation and draw down from multilateral organisations will finance the deficit.

He stated thus, “The deficit will be financed by new borrowings totalling 7.83 trillion naira, 298.49 billion naira from Privatization Proceeds and 1.05 trillion naira drawdown on multilateral and bilateral loans secured for specific development projects.”

Backstory

Already, President Tinubu has written to the National Assembly seeking approval for external borrowings as part of the 2022-2024 external borrowing plan.

In the letter, the President requested the National Assembly to approve $8.69 billion and €100 in external loans.

The total budget proposal for 2024 was N27.5 trillion and the President expects the economy to grow by 3.76% and inflation to moderate to 21.4%