Nigeria’s federal government has revealed its plan to borrow N9 trillion from the debt market to finance 35% of the budget for the upcoming year, according to Mr. Ben Akabueze, the Director-General of the Budget of the Federation. The remaining 65%, equivalent to N17 trillion, is expected to be raised from revenue sources, leaving the rest to be covered through borrowing.
The 2024 budget allocates N26.01 trillion for expenditure, marking a 14.8% increase over the estimated 2023 spending of N22.65 trillion, which includes a supplementary provision of N819.54 billion. Notably, N8.25 trillion and N243 billion have been allocated for debt service and sinking funds to retire maturing bonds issued to local contractors and creditors.
President Bola Tinubu’s administration, which commenced in May, will seek to implement cost-cutting measures to enhance governance efficiency, value for money, and reduce corruption, possibly involving a review of the 2007 Public Procurement Act.
The government has also reduced its 2024 budget deficit to N9.05 trillion, which is 22% lower than the N11.60 trillion budgeted in 2023. It aims to maintain the deficit within the 3% threshold stipulated in the 2007 Fiscal Responsibility Act (FRA).
This change in plans represents a shift from previous statements made by the country’s Minister of Finance, Mr. Wale Edun, who indicated that there was no intention to borrow from any local or foreign organization during the inaugural Federal Executive Council (FEC) meeting on August 28.
Source: Business Post Nigeria