In the bustling heart of Lagos, amidst the cacophony of daily life, Fatima, a young entrepreneur, sits in her modest fabric shop reflecting on the year 2024 gone by. The promise of the “Budget of Renewed Hope” filled her with optimism. She had imagined a Nigeria where small businesses like hers would thrive, buoyed by policies designed to ease access to credit, stabilise prices, and spur economic growth. Yet, as the months unfolded, the journey revealed a mix of challenges and opportunities.
Fatima’s experience mirrors the sentiments of millions of Nigerians. Some sectors have seen progress, with new roads connecting rural markets and government-backed educational grants enabling education to be affordable to many. Yet, the weight of rising inflation and an unstable exchange rate reminds everyone that the road to prosperity is neither quick nor easy. The cautious optimism that began the year 2024 was tempered by the harsh realities of implementation delays and global economic pressures.
As 2025 approaches, Fatima’s hope is reignited, not just by promises of renewed efforts but by the resilience of people like her who adapt and persevere. The “Budget of Renewed Hope” was not merely a government document; it is a reflection of the collective aspiration to rebuild, recalibrate, and rise. The question remains: Has the budget led to tangible progress, or has it remained a promise—in the long line of past budgets—waiting to be fulfilled?
The 2024 budget of ‘Renewed Hope’: An overview
President Bola Ahmed Tinubu submitted a ₦27.50 trillion appropriation bill for the 2024 fiscal year to the National Assembly on November 29, 2023. After review and amendments, the National Assembly passed the budget, which the President signed into law on January 1, 2024. The finalised 2024 Approved Budget reflects an aggregate increase of ₦1.27 trillion from the initial proposal, raising the total budget to ₦28.78 trillion.
A closer examination of the approved budget reveals significant adjustments by the National Assembly. The recurrent non-debt expenditure, covering personnel costs, overheads, pensions, gratuities, and social benefits, was reduced by ₦1.15 trillion, from the proposed ₦9.92 trillion to ₦8.77 trillion. Additionally, the recurrent debt expenditure for debt servicing was cut by ₦220 billion, bringing it down from ₦8.49 trillion to ₦8.27 trillion.
Conversely, the capital expenditure budget saw a substantial increase. The National Assembly raised the allocation by ₦2.28 trillion, boosting it from the proposed ₦7.72 trillion to ₦9.995 trillion, reflecting a focus on infrastructure and developmental projects.
FG’s Approved Budget
The budget’s provision centres on key objectives aimed at transforming Nigeria’s economic landscape. It prioritised job creation and economic stability through investments in sectors that stimulate employment while also emphasising human capital development by allocating resources for education and health initiatives, including a new student loan scheme. Additionally, the budget focuses on poverty reduction through expanded social investment programs that provide cash transfers and other palliative provisions to vulnerable households. To foster a more attractive investment environment, it outlines strategies for public-private partnerships to enhance infrastructure in critical sectors like energy and transportation. Collectively, those objectives demonstrated the government’s commitment to building a stable and prosperous economy while addressing the pressing social challenges faced by Nigerians.
“Collectively, those objectives demonstrated the government’s commitment to building a stable and prosperous economy while addressing the pressing social challenges faced by Nigerians.”
The 2024, however, faced significant challenges in its implementation, with revenue generation shortfalls leading the way. Insufficient oil production and inadequate taking off of non-oil revenue streams created fiscal pressures, constraining the government’s ability to meet most of its financial obligations. Rising inflation and persistent exchange rate volatility further compounded these issues, eroding purchasing power and diminishing the effectiveness of budget allocations for citizens and businesses alike. Additionally, delays in the execution of capital projects hindered progress, especially in rural areas where infrastructure development remains critical to fostering inclusive growth and economic stability.
Macroeconomic snapshot in H2, 2024
In Q3 2024, Nigeria’s GDP grew by 3.46 percent, up from 3.1 percent in Q1 2023, primarily driven by significant improvements in the financial and insurance sector, which surged from 21.37 percent to 31.24 percent, and the mining and quarrying sector, which rebounded from -3.96 percent to 6.30 percent. The growth in the financial sector was largely fuelled by the banking subsector, which experienced a remarkable increase of 33.30 percent, attributed to higher interest income, a rise in digital transactions, and gains from foreign exchange revaluation. Meanwhile, the mining and quarrying sector’s growth was propelled by the petroleum and natural gas subsector, which grew by 5.70 percent due to increased output of crude oil and natural gas, alongside rising crude oil prices.
In July 2024, Nigeria’s headline inflation rate declined for the first time in 19 months, easing to 33.4 percent, and continued to fall in August to 32.15 percent, largely due to base effects and the onset of the harvest season. However, this decline was temporary as inflation rebounded, driven by rising PMS prices and the depreciation of the naira. The upward trend in inflation is expected to persist over the next three months, although the pace of growth is projected to slow down. By November 2024, inflation had surged again to 34.6 percent, marking a near 30-year high, with food inflation reaching 39.93 percent due to increased prices of staple foods and ongoing economic pressures.
On the currency side, the period between June and October 2024 saw the disparity between Nigeria’s parallel and official exchange rates begin to decrease, as both rates started to align, easing the significant gap that had previously existed. This alignment was supported by a shift towards a more market-driven exchange rate system, along with the Central Bank of Nigeria’s (CBN) foreign exchange sales to banks and Bureau de Change operators, which helped narrow the gap. Additionally, a reduction in speculative forex demand, which often exacerbates the divergence between official and parallel rates, contributed to this trend. Overall, these factors indicate a gradual stabilisation of the naira in the foreign exchange market.
Concluding remark
As we await the discussion of the debate on the proposed 2025 appropriation bill, the National Assembly, during the 2025 budget presentation, extended the effective implementation date for the 2024 budget by six months: June 2025. It needs to be mentioned that the 2024 budget still suffers from the legacy issues that have become a permanent fixture of Nigeria’s budgetary process: driving up revenue mobilisation, ramping up crude oil production, deepening sectoral reforms critical to economic recovery, and security.
Efficient implementation of the 2024 budget requires a high degree of synergy and coordination among ministries, departments, and agencies (MDAs). Success hinges significantly on aligning fiscal and monetary policies, an area previously weakened by misalignments and gaps between the Federal Ministry of Finance and the Central Bank of Nigeria (CBN). While the CBN operates autonomously, the Ministry of Finance remains central to economic coordination, necessitating effective collaboration to address these challenges. BDI expresses optimism that the current administration’s renewed vigour and vision will foster better alignment.
Additionally, addressing Nigeria’s insecurity challenges demands coordinated efforts among security agencies, as insecurity undermines efforts to enhance oil and non-oil revenue generation from both domestic and foreign sources. Employing digital tracking technologies to monitor crude oil facilities and introducing innovative strategies to curb revenue leakages in revenue-generating institutions are critical. A notable example is the Nigerian Immigration Service’s recent reforms in international passport application processes, which demonstrate how innovation can effectively block leakages and improve revenue mobilisation.
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