Abubakar Bagudu, minister of Budget and Economic Planning says the Federal Government has provided funds to derisk some sectors needed for growth.
Speaking in an interview with Arise TV on Friday, Badugu said an N100 billion fund is being provided to crowd in and derisk consumer credit in the manufacturing sector.
“There is provision for funds that will be used in derisking some sectors needed to stimulate growth in the economy. An N100 billion fund is provided to crowd in and derisk consumer credit so that manufacturers can worry less about who has not paid on time,” Bagudu said.
He said the 2024 budget, recently signed into law by the president, is rooted in the renewed hope agenda’s manifesto, as it highlights key points, including the need for increased economic growth, poverty eradication, access to capital, transparency, and the rule of law.
“The agenda, along with its eight key points, emphasises the president’s commitment to achieving higher growth, addressing food insecurity, fostering economic growth, and eradicating poverty. It underscores the imperative to provide access to capital, as well as the need to enhance transparency and uphold the rule of law,” Bagudu added.
He noted that the agenda 2050 signifies a need to grow at a much higher rate and a need to mobilise private capital.
“The agenda estimates that we need investment at a minimum of at least $100 billion with less than 20 percent of it coming from the public sector,” he said.
The minister added that institutional changes, such as separating the ministry of budget and economic planning from the minister of finance, underscore the importance of aligning the budget with a strategic plan.
The alignment reflects a plan-based budget in the 2024 fiscal year, aiming to restore macroeconomic stability and boost private sector confidence by eliminating distortions such as the recent removal of fuel subsidies and unification of the foreign exchange market.
He added that capital expenditure sees an increase, reaching almost 11 trillion, constituting approximately 39 percent of the budget.
“This allocation targets priority areas, enhancing both relative and absolute spending,”
Bagudu said that the supplementary budget appropriations preceding the main budget prioritise national security and defence to alleviate the economic activities of sectors affected.
He added that a N100 billion school feeding fund has been provided to support child retention and mobilisation, while investments in housing, power, steel, technology innovation, and digital and creative economies aim to spur growth.
While delivering his presentation on the budget, Tola Adeyemi, senior partner at KPMG Nigeria and CEO at KPMG West Africa, said Nigeria needs to look at the sustainability of its debt stock to prevent it from going in the direction of countries that have defaulted on their debts.
“The debt service levels as a percent of revenues are very high. And there is a plan to borrow even more money. So, as a nation, we need to be looking at the sustainability of our debt stock. We certainly don’t want to go in the direction of countries that have defaulted on their debt,” he added.
He recommended that there is an urgent need to look at debt sustainability, the restructuring of that debt and any other things that need to be done.
“Nigeria has a budget deficit of N9.18 trillion which will be financed by borrowing mostly in the domestic market. There is an attempt to curtail additional foreign debt because of the exchange and interest rate impact.”