Senate approves MTEF for 2024 to 2026, adopts N700/$1 exchange rate

The Senate today approved the Medium-Term Economic Framework (MTEF) and Fiscal Strategy Paper (FSP) for 2024 to 2024 after a presentation by the chairman of the Joint Committee on Finance, Sen. Sani Musa which oversaw the MTEF/FSP.

The Senate approved a slew of recommendations including an inflation rate of 21.4% for 2024, 20.3% in 2025, and 18.6% in 2026.

According to the National Bureau of Statistics, the inflation rate for October stands at 27.33%. KPMG projects Nigeria’s inflation rate to reach 30% in December, although the federal government expects the inflation rate to drop in 2024.

Other decisions reached include the following:

Crude Oil Production: 1.78 million barrels per day

Crude Oil Price: $73.6 per barrel

Exchange Rate: N700 to the dollar

GDP Growth Rate: 3.76%

Budget Projection for 2024: N26 trillion

Projected Revenue for 2024: N16.9 trillion

Approved Deficit for 2024: N9 trillion

Debate on exchange rate

During the seating, there was a contentious debate on the exchange rate of N700/$ pegged for 2024 as senators queried the feasibility of the proposal.

The senate also resolved to ban the importation of all items locally produced as a measure to shore up the value of the naira.
The Senate also moved to amend the act of the Bureau of Public Enterprise (BPE) and mandate the Ministry of Finance to take charge of all assets of the federal government both fiscal and material.

About the MTEF/FSP

The Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) guides the federal government’s spending with its economic and social objectives.

It constitutes a three-year rolling plan that outlines the government’s spending priorities and the corresponding funding mechanisms.

The approval of the MTEF by both chambers of Nigeria’s parliament clears the path for President Bola Tinubu to submit the country’s 2024 budget proposal of 26 trillion naira ($34 billion) to parliament for consideration.

The document, endorsed by Tinubu’s cabinet before its submission to lawmakers for approval, anticipates the naira currency to trade at around 700 per dollar in the coming year, with a slight strengthening projected for 2025 and 2026.