The Federal Executive Council, FEC, yesterday proposed the sum of N26.01 trillion for the 2024 fiscal year to be submitted to the National Assembly.
The government said it was working towards ensuring that the January to December budget circle was maintained and that the 2024 budget was passed and signed before December 31, 2023.
The Minister of Budget and Planning, Atiku Bagudu, disclosed this at the end of council’s meeting presided over by President Bola Tinubu at the Council Chamber, Presidential Villa, Abuja.
Briefing State House correspondents at the end of FEC meeting alongside his colleagues from Ministry of Information and National Orientation, Mohammed Idris, the Minister of Finance and Coordinating Minister of Economy, Wale Edun, Minister of Works, Engr. Dave Umahi, Industry, Trade and Investment, Doris Uzoka-Anite, Labour and Employment, Simon Lalong, as well as the Minister of State for Labour, Nkeiruka Onyejecha, Bagudu said the council had approved the 2024-2026 Medium Term Expenditure Framework, MTEF, and Fiscal Strategy Papers, FSP.
He explained that the executive was required by the Fiscal Responsibility Act to present to the National Assembly, ahead of a budget presentation, a document which would provide the medium-term economic outlook for the economy.
He said FEC made assumptions about the reference price for the price of crude oil which is at $73.96; exchange rate put at N700/$; oil production of 1.78 million barrels per day; debt service of N8. 25 trillion; inflation at 21 per cent and GDP growth at 3.76 percent.
Bagudu said: “Now, it was presented on the background of the commendable measures that have been taken since June in order to restore macroeconomic stability, particularly by the deregulation of petroleum prices, which we maintained that subsidies are gone and, indeed, the regulation of the foreign exchange market.
“So, Council deliberated, as well as the implication of this and all measures promised in the renewed hope agenda, consumer credits, mortgages, reversed or dismissed institution as well as funding the newly aligned institutional changes, particularly ministries, with specific functions that are able to generate growth that would be better for our country.
“The council members acknowledged the medium term expenditure framework, and it is agreed that we can go ahead to the next step of consultation and presentation to the National Assembly.
“The Medium Term Expenditure Framework is a requirement of the Fiscal Responsibility Act. So, the Fiscal Responsibility Act is for years 2024 to 2026.
“The several hundred of dollars reference price assumes optimism that investment flows will continue to come in. Given all the engagements, given all the positive tractions we are seeing from investors from the engagement led by Mr. President personally, two countries, in particular India and UAE, as well as France, the engagements led by the coordinating minister of the economy, engagement led by the trade and investment minister and, indeed, other ministers.
“So, now increasingly, engagement made by the governor of the Central Bank of Nigeria, and, indeed, all other ministers. We believe these inflows will help us to clear the backlog and the exchange rate will begin to reflect a stronger value than the current weakness.
“There was a question on the assumptions. I spoke about a number of assumptions. The assumptions include oil price benchmark, which I said for 2024 we are assuming $73.96, oil production of 1.78 million barrels a day, exchange rate of N700/$.
“Then the inflation of 21 per cent and GDP growth rate of 3.76 per cent . The aggregate expenditure is estimated at N26.01 trillion for the 2024 budget, which includes statutory transfers of N1.3 trillion, non debt recurrent expenditure of N10.26 trillion, debt service estimated at N8.25 trillion, as well as N7.78 trillion being provided for personnel and pension cost.
“Debt service increased because N22.7 trillion with the expectation of scrutinizing the federal government debt at nine per cent.
“So that is easily about N2.1 trillion. This describes that equally personnel cost went up because of transfers under the agreement with labour.”
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said: “We also approved the application for financing from the World Bank. And in particular, the International Development Association, IDA, which is really virtually free or zero interest lending arm or financing arm of the World Bank.
“The total is $1.5 billion. And the background is just as you heard from the minister of planning and budget. The world today is one of high interest rates, as the developed world looks to fight inflation. ”They do it by restricting money, keeping interest rates high so that you can get inflation down. What that means is that interest rates for everybody else, become not just high but very painful, if not affordable within that context.
”Nigeria has been able to make the kind of macro-economic moves, it has been able to take the tough decisions to restore balance in the economy, in government finances that have warranted support, that has elicited support from the multilateral development banks.
“It’s on the basis of that, that the World Bank is willing to consider and process on our behalf $1.5 billion of concessional financing, relatively cheap financing and financing that will be dispersed relatively quickly.
“Secondly, an $80 million financing from African Development Bank was also approved by the Federal Executive Council. “This financing is for a project in Ekiti, called the Ekiti knowledge zone Project EKZ. The EKZ is basically to support young people and their quest to take on technology to use it to be employed, to be trained and to benefit from being part of the knowledge economy, being part of the technological wave that is present very much in Nigeria, which is becoming a bigger and bigger share of the economy.
“So, it’s $80 million to help the young people in the sector of knowledge economy technology and communications generally.”
Minister of Works, Engr. Umahi, said: “We presented a memo on an inherited scope of road infrastructure from the past administration and the total length of the roads we inherited and bridges was 18,897 kilometres.
“We also brought to the notice of FEC that a number of projects were awarded, some lasting up to 20 years back, abandoned, ongoing with no proper funding and so on and so forth. And there’s some new critical roads totalling 12,000 kilometres and 24 bridges.
“You know, FEC approved for the continuation of these inherited projects and the new proposal and directed that Federal Executive Council committee, Chief of Staff, Minister of Finance and Coordinating Minister of the Economy, Minister of Works, Minister of Budget and Planning, GCEO/GMD of NNPLC, Chairman of FIRS and SSA on Tax Reform, to meet and come up with strategies to source for funds and everything pertaining to the funding.
“Number two, FEC was also informed on the ongoing projects and to mitigate so much inflation and variation of the projects, to have some of the projects that have attained completion to be redesigned on concrete and going forward, for new projects to be done on concrete.
“FEC approved that concept that most of the ongoing projects should be designed on concrete pavements, depending on the level of completion and if you’re doing asphalt, there are also conditions for that.
Meanwhile, FEC meetings will now hold on Mondays, away from the Wednesdays they were held in the past.
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