Federal Government may revisit 2024 budget as revenue rises

The Federal Government hinted yesterday that it might return to the National Assembly to seek an increase in the size of the 2024 budget, currently at N27.5 trillion, if revenue performance continues to improve.

Wale Edun, Minister of Finance and Coordinating Minister of Economy, made this disclosure while defending the budget before the Senate Committee on Finance led by Senator Sani Musa (APC, Niger East).

He attributed the potential revision to the recent positive economic developments, stating: “The revenue performance is encouraging, and we expect it to continue on this positive trajectory.

We have a fiscal policy and tax reform committee working diligently to introduce fundamental changes, including digitalisation and greater collection efficiency, which can further improve revenue-to-debt ratios and potentially allow us to increase this budget.”

Edun elaborated: “If we have a solid revenue performance, we will not hesitate to return to the National Assembly. I am confident that Mr President will authorise seeking additional appropriations. This is a situation we are all looking forward to.”

This announcement comes just two weeks after President Tinubu presented the initial N27.5 trillion budget proposal to the National Assembly.

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The proposal also included the adoption of a revised 2024-2026 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), with a target of achieving at least 3.76% economic growth, exceeding the global average forecast.

Edun also highlighted the government’s efforts to expedite the procurement process to enhance capital spending in the 2024 budget.

He explained: “Actual budget performance shows that expenditure as of the third quarter (September) was 32% below the budget estimate, while revenue was 5% higher than expected. This revenue performance is quite encouraging. However, debt service increased by 18% due to exchange rate fluctuations and significant foreign debt outstanding (approximately $46 billion).

Capital expenditure performed significantly below budget, prompting us to review the procurement process and identify ways to accelerate capital spending.

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The budget deficit is expected to decrease from N13.7 trillion to N9.2 trillion, with the deficit-to-GDP ratio falling from 6.1% to 3.9%. Importantly, capital expenditure remains at 32% of the budget.”

These developments indicate the government’s commitment to fiscal prudence and responsiveness to positive economic trends.

The potential increase in the size could provide additional resources for crucial areas like infrastructure development, social welfare programs, and economic growth initiatives. However, it is essential to ensure that robust revenue generation strategies and careful financial management accompany additional spending.