Ahead of its presentation next week to the National Assembly, a N27.5 trillion 2024 appropriation bill was on Monday approved by the Federal Executive Council (FEC).
The FEC meeting was chaired by President Bola Tinubu at the State House, Abuja.
The budget will be presented to the National Assembly next week by the President, according to the Minister of Budget and National Planning, Mr Atiku Bagudu.
He disclosed this to State House correspondents at the end of the council meeting that N18 trillion was being targeted as revenue for the budget.
The minister said:”The Federal Executive Council approved the 2024 Appropriation Bill and the presentation of such to the National Assembly by His Excellency, Mr. President. The bill has an aggregate expenditure of N27,500,000,000,000, which is an increase of over N1.5 trillion from the previously estimated, using the old reference prices.
“The forecast revenue is now N18.32 trillion, which is higher than the 2023 revenues, including that provided in the two supplementary budgets. Equally and commendably, the deficit is lower than that of 2023.
“Details of the Renewed Hope Budget will be announced by Mr. President when he makes the presentation to the National Assembly.”
According to him, the Medium Term Expenditure Framework (MTEF) already passed by the National Assembly has been further reviewed.
“Today, among other issues, the Federal Executive Council considered the 2024 Appropriation Bill. You may recall that the Medium Term Expenditure Framework was earlier approved and transmitted to the National Assembly, which the assembly graciously approved and that approved Medium Term Expenditure has the exchange rate of N700 to $1 and equally, the benchmark crude oil price at $73.96 cent.
“However, in Mr. President’s determination to find more money to fund our priorities, today the Federal Executive Council further revised the Medium Term Expenditure Framework and Fiscal Policy Framework and two of the important decisions were to use an exchange rate of N750 to $1 and also a benchmark crude oil reference price of $77.96, meaning $4 more than the earlier approval.
“This will significantly increase government revenue that Mr. President intends to use in further supporting the ministries, departments and agencies in the execution of the eight priority areas, particularly Health, Education, infrastructure, security and other developmental areas,” Bagudu said.
Also speaking with state house correspondents, the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, disclosed that FEC had approved $1 billion support loan from the African Development Bank (AfDB) for 2024 budget.
“I would like to give a summary of the memos that were approved at Council today and of course, they were all to do with financing. First of all, there was an inherited financing, an inherited loan processing which has to do with the $100 million financing from African Development Bank and $15 million from the Canada-African Development Bank Climate Fund.
“It was processed before this administration came in and, so it has been inherited. Essentially, it is concessional borrowing, around 4.2 percent per annum by Abia State through the federal government. So the funds are to be lent to Abia State and they are for waste management and rehabilitation of roads in Umuahia and Aba, in particular. That was approved.
“Secondly, there was financing of $1 billion, concessional financing, 25 years, eight years moratorium respectively at about the same 4.2 percent per annum, which was approved by the African Development Bank for this administration.
“And really, it was in recognition of the macroeconomic measures that have been taken, the swift movement towards macro stability, restoring revenue, improving the foreign exchange situation and so forth that have been taken by this government.
“The reward as far as the African Development Bank, a concessional financing organization, was to provide $1 billion in general budget support,” Edun explained.
On Tinubu’s government’s tax reform, the finance minister said the Fiscal Policy and Tax Reform Committee also briefed the Council.
“The Committee has been working for roughly 90 days and has been working very effectively such that they are in a position to have even impacted the economy by coming up with initial reforms, as well as signposting the way forward in terms of very important targets.
“In a nutshell, the policy on VAT removal on diesel is from them, they are looking to help boost fiscal situation of the government by increasing revenue, particularly tax revenue, through digitalization, additional efficiency and rationalization of the range of taxes that we have at the moment.
“They are looking to increase the ratio of tax-revenue-to-GDP to 18 percent which is the average for Africa. So many countries are above that level. It is actually about double where we are now and within a matter of a few years, their target is to reach 18 percent.
“Other economic measures, in the short term, are being contemplated and their report was well received by Mr. President and indeed, the whole Federal Executive Council,” Edun said.
He also disclosed that the Council approved N2 trillion for use by Ministry of Finance to bring down interest rate on the current outstanding.
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