The proposed budget for 2024, which stands at N26 trillion, represents a significant (19.1 percent) increase from the budget allocated for 2023. This surge in budget size raises the critical question of where the funds to support this allocation will be derived, amid debt choking the economy.
Olisa Agbakoba, the Senior Partner and Head of the Arbitration and ADR practice group at Olisa Agbakoba Legal shared his insights during an interview with The BusinessDay’s Exclusive, suggesting that Nigeria’s financial challenges can be overcome with strategic efforts.
“Where do we get N26 trillion? Easy. We are a rich country,” Agbakoba said. “I wrote to the former minister of finance, pointing out something called ‘MOFINC’, Ministry of Finance Incorporated; it holds all the assets of the Federal government. As a result of my letter, she made an inquiry and came up with preliminary findings that Nigeria had N33 trillion. So when you say N26 trillion, the problem is not that we don’t have money, but that we do not look for it. 26 trillion is a small number for a country of 210 million people. If I were in government, I would be pushing for a budget of about N100 trillion a year.”
Speaking further, he lauded the initial steps taken by President Tinubu, including the announcement of fuel subsidy removal and addressing exchange control issues, as positive measures. However, he pointed out the need for more decisive follow-ups to ensure the successful implementation of these policies.
“President Tinubu started very well with those two big announcements on fuel subsidy removal and exchange control issue which has caused a lot of hardship,” Agbakoba said.”I liken the President to a captain on a place; took off very well. But you know, when a captain takes off, the weather may be bad, he’s run into two big headwinds. He needs to push the throttle a bit harder so we can see the results of why he has removed the fuel subsidy.”
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Agbakoba underlined the importance of balancing fiscal and monetary policies to manage inflation effectively. He noted the absence of comprehensive programs in this regard.
The legal expert also explored potential revenue sources for the Tinubu-led administration, including areas such as Space, Finance, and Maritime. “I am conducting a predictive study to identify potential sources of income. For example, we have Elon Musk, who owns Starlinks, with a constellation of satellites in low jurisdictional orbits in Nigeria, not contributing financially,” Agbakoba said. “We have a space agency and satellite service users like DSTV not making payments, and I estimate this could amount to around $6 billion.”
“In the maritime sector, Apapa port has the potential to generate N20 billion a day, but achieving this would require a program to revitalise Apapa and its environs. This would involve an investment of 6-8 billion dollars for road improvements, considering Ajegunle, originally reserved for a port, is now a thriving city. However, there are opportunities that can be explored,” Agbakoba continued. “In the financial services sector, there are significant financial opportunities, but it requires thoughtful planning and strategic thinking. There are numerous avenues for funding that we can explore.”
