In the fiscal corridors of Nigeria’s governance, President Bola Ahmed Tinubu has unveiled 2024 National Budget, christened ‘Renewed Hope’ beckoning both scrutiny and celebration.
Delving into the intricacies of economic policy, this analysis aims to unveil both the positive and negative aspects woven into the financial fabric. Despite the optimistic name ‘Renewed Hope,’ underlying challenges such as an 18-year high inflation rate of 27.33%, naira devaluation, and 31.53% food inflation, all pose significant economic complexities. As earlier reported by BusinessDay.
However, this analysis interprets the basic variations distinguishing this budget from its predecessors, shedding lights on promises, hurdles, and narratives shaping Nigeria’s economic destiny.
The 2024 budget, specifically named ‘Renewed Hope,’ unfolds key themes, each contributing to the nation’s economic landscape. Delving into the intricacies of this financial masterpiece, it’s evident the government strategically emphasises areas for a revitalised and resilient Nigeria.
Let’s unravel these major themes, each holding promises for the nation’s future.
Chart: BusinessDay Media, Source: Budget Office of the Federation
Aggregate Government Expenditure
President Bola Ahmed Tinubu officially introduced the inaugural appropriation bill, known as the 2024 Budget, to a joint session of the Nigerian National Assembly. Aptly named “The Renewed Hope Budget,” the proposed expenditure for the year is N27.5 trillion, marking a historic high and representing a 10.9 percent increase from the 2022 revised budget of N24.83 trillion.
Read also: Federal Government may revisit 2024 budget as revenue rises
However, breaking down the aggregate expenditure, N7.72 trillion is allocated to capital expenditure (28.07% of the fiscal budget), and N9.92 trillion goes to recurrent expenditure (36.07%) as compared to his predecessors such as:
Chart: BusinessDay Media, Source: CBN
Yar’Adua in the 2008 fiscal budget: While aggregate government expenditure stood at N2.74 trillion, capital expenditure was N787.17 billion which is 28.72 percent, and recurrent expenditure was 1327. 55 billion which is 48.45 percent of the fiscal budget.
Jonathan in the 2011 fiscal budget: While aggregate government expenditure stood at N4.299 trillion, capital expenditure was N809.96 billion which is 18.83 percent, and recurrent expenditure was 2527.26 billion which is 58.78 percent of the fiscal budget.
Buhari in the 2016 fiscal budget: While aggregate government expenditure stood at N6.06 trillion, capital expenditure is N1587.59 billion which is 26.19 percent, and recurrent expenditure is 2646.38 billion which is 43.66 percent of the fiscal budget.
Read also: Budget: Sanwo-Olu proposes N2.2trn for 2024
Debt servicing:
In the 2024 fiscal budget, N8.25 trillion was allocated to debt servicing indicating that of the N27.5 trillion aggregate expenditure, 30 percent is to be used to service debt as compared to President Tinubu’s predecessors:
Yar’ Adua in 2008: While aggregate government expenditure stood at N2.74 trillion, 372.20 billion was allocated for debt servicing which is 13.58% of the fiscal budget.
Jonathan in 2011: While aggregate government expenditure stood at N4.299 trillion, 527.07 billion was allocated for debt servicing which is 12.59% of the fiscal budgets.
Buhari in 2016: While aggregate government expenditure stood at N6.06 trillion, 1475.3 billion was allocated for debt servicing which is 24.34 of the fiscal budgets.
Budget Deficit:
The 2024 fiscal budget further reveals the ‘Deficit budget.’ This implies that the government’s estimated expenditure of N27.5 trillion is greater than her proposed estimated revenue of N18.32 with a variance of N9.18 trillion known as ‘Deficit budget.’
Compared to his predecessors:
Yar’Adua in 2008: While aggregate government expenditure stood at N2.74 trillion, the estimated revenue was N2.226 trillion. This indicates that the estimated expenditure is greater than that of revenue with a variance of N514 Billion.
Jonathan in 2011: While aggregate government expenditure stood at N4.299 trillion, the estimated revenue is N3.393 trillion. This indicates that the estimated expenditure is greater than that of revenue with a variance of N906 Billion.
Buhari in 2016: While aggregate government expenditure stood at N6.06 trillion, estimated revenue is N2.855 trillion. This indicates that the estimated expenditure is greater than that of revenue with a variance of N2.205 trillion.
Statutory transfer:
Ranking the government expenditure in terms of allocation as presented by President Bola Ahmed Tinubu for the year 2024, among the five items listed in the fiscal budget that sum up to N27.5 trillion, statutory transfer, ranked the fourth position as N1.37 trillion was allocated, which shows that 4.98 percent of the fiscal budget goes to statutory transfer.
As compared to his predecessors:
Yar’ Adua in 2008: While aggregate government expenditure stood at N2.74 trillion, statutory transfer was N162.57 billion. This indicates that of the estimated expenditure, 5.93 percent is allocated to statutory transfer.
Jonathan in 2011: While aggregate government expenditure stood at N4.299 trillion, the statutory transfer was N326.7 billion. This indicates that of the estimated expenditure, 7.59 percent is allocated to statutory transfer.
Buhari in 2016: While aggregate government expenditure stood at N6.06 trillion, the statutory transfer was N351.3 billion. This indicates that of the estimated expenditure, 5.79 percent is allocated to statutory transfer.
Further insights into the 2024 budget christened ‘The Renewed Hope Budget’ as compared to 2023 budget proposal are analysed below:
Following the presentation of the budget, some key assumptions are within Nigeria’s Federal Government’s 2024-2026 Medium-term Expenditure Framework (MTEF), including $77.96 per barrel of crude oil, 1.76 million bpd of crude oil production, N750/$, and a 21.5% inflation rate.
Revenue projection sees a significant 65.8% increase to N18.32 trillion, surpassing the 2023 revised budget of N11.05 trillion. Expenditure projection rises by 10.3% to N27.5 trillion from the 2023 revised budget, breaking down into capital expenditure (31.6%), recurrent (36.1%), and debt servicing (30.0%).
Debt service projection improves to 45.0% of revenue in 2024 from 73.5% in the 2023 budget proposal. The projection for capital expenditure improves by 34.7%, while recurrent expenditure increases by 19.1%. The total deficit reaches N9.18 trillion, about 3.88% of the GDP, signalling a positive shift toward better fiscal management.
In conclusion, the 2024 ‘Renewed Hope’ budget, while ambitious, appears disconnected from the current economic reality. Clear support through the Finance Bill 2023 is essential for effective implementation, and the government must focus on revenue optimisation, institutional strengthening, and efficient expenditure practices to truly realise the ‘Renewed Hope’ it promises.
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