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FG exceeds revenue target, as debt servicing gulp over N5trn in 9 months

…salary review, others push 2024 budget deficit to N9.18trn–minister

The Federal government achieved a 104 percent pro-rata target of N8.28 trillion; its total revenue from January to September 2023 stood at N8.65 trillion.

This was disclosed by Abubakar Atiku Bagudu, the Minister of Budget and Economic Planning, during the public presentation of the FGN 2024 Budget Proposals held in Abuja on Wednesday.

An overview of the 2023 budget performance as of September showed that of the total N8.65 trillion revenue, N1.42 billion was generated from oil revenues, while non-oil revenues totalled N2.50 trillion.

Company income tax and Value Added Tax collections were N1.55 trillion and N318.95 billion. At the same time, other revenues amounted to N4.74 trillion, of which independent revenues from ministries, departments and agencies, as well as government-owned enterprises, were N1.28 trillion.

Read also: Big budget figures failed to impact Nigerians

On the aggregate expenditure for the period January-September, of the actual spending which stood at N12.7 trillion, FG spent N5.79 trillion to service debt.

According to the minister, only N1.47trn has been released to Ministries Department and Agencies (MDAs) for capital projects.

He said, “The aggregate expenditure for the 2023 budget is N24.82trn, including the two supplementary appropriations, and the pro-rata revenue expected between January and September is N18.61trn. However, only the sum of N12.7trn has been released, which shows a variance of -31 per cent.

“The aggregate expenditure has a pro-rata spending target of N18.6trn as of the end of September. However, the actual spending was N12.7trn. Of this N12.7trn, N5.79 was for debt service; N3.78trn was for personnel cost, including pensions and gratuities. Only about N1.47trn 25 per cent of the pro-rata budget has been released for MDAs capital expenditure as of September 2023.”

President Bola Ahmed Tinubu presented the N27.5trn appropriation bill before a joint session of the National Assembly.
The budget is titled, ‘Budget of Renewed Hope’ is N2.68trn or 10 percent higher than the 2023 N24.82 trillion budget.

Read also:7 highlights of Nigeria’s 2024 budget

The 2024 expenditure estimate includes statutory transfers of N1.30 trillion and non-debt recurrent expenditure of N10.26 trillion. The provision of N8.25 trillion and N243 billion have been made for debt servicing and sinking funds to retire maturing bonds issued to local contractors/ creditors, respectively.

A total of N6.48 trillion (inclusive of N1.02 trillion for GOEs) is provided for personnel and pension costs, an increase of N576 16 billion over the 2023 provision.

The aggregate amount available for capital expenditure in the 2024 budget is N8.70 trillion, higher than the 2023 provision of N8.43 trillion.

Further breakdown of the 2024 budget showed that the budget deficit is projected to be N9.18 trillion, 50 percent of total revenues.

The high projected level of fiscal deficit in 2024, according to the minister is partly attributable to the proposed salary review of federal workers across the board, increased pension obligations and higher debt service costs.

In the budget, N1.23 trillion of the federal government budget is allocated to education, which is higher than the 2023 allocation, and also equal to the allocation for health. Bagudu noted that the allocation for education includes the provision of 50 billion nairas for the Student Loans funded it is an addition to what has been appropriated before the supplementary appropriation for the take-off of the Student Loans Fund.

Also, the defence and security sector received about N3.25 trillion, which is about 12 percent of the budget. “This is quite significant, especially following the provision of close to 600 billion in the supplementary appropriation that was passed about two months ago to the defence and security sector. This confirms the government’s commitment to funding all security agencies and ensuring the progress recorded is maintained.

“Infrastructure spending is 5% of the budget which is 1.32 trillion, and part of the instruction of Mr. President to the cabinet is bringing the private sector into infrastructure.

“All ministries have been updated to examine how to assess investors who are willing to put money into infrastructure, and what the demand computes. Infrastructure is small compared to what the private sector can bring. So the number of roads, railways, airports, and infrastructure bridges in housing, power, and aviation, are under preservation. The government is funding us to catalyze public and private investment in social development programs.

“We have updated all ministries to examine how to assess investors who are willing to put money into infrastructure, and what the demand computes. Infrastructure is small compared to what the private sector can bring. So the number of roads, railways, airports and infrastructure bridges in housing, power, and aviation, are under preservation. I want to see more of what the government is funding us to catalyze public and private.

“ You may recall that a loan of $800 million was obtained from the World Bank to support the social development and poverty deduction, as well as the appropriation of 400 billion naira in the supplement.

“In addition to that now the sum of 534 million which is 2 percent is marked for social development and poverty reduction, the congressional, the budget that was presented to the national assembly and I believe was well received by the National Assembly and Nigerians has been prepared against the back of continuing global abuse.

“The aim is to rely less on borrowing, focus on expenditure management, line up the economy for foreign investment, and get value for money,” he said.