On Monday, the Federal Executive Council (FEC) granted approval for a 2024 budget totaling N27.5 trillion. This decision followed the review of the Medium-Term Expenditure Framework, previously endorsed by the National Assembly, which set the exchange rate at N700 to $1 and the crude oil price at $73.96 per barrel.
Addressing State House Correspondents after the FEC meeting in the Presidential Villa, Abuja, the Minister of Budget and Economic Planning, Abubakar Bagudu, highlighted adjustments to the MTEF and Fiscal Policy. The revised figures now include an exchange rate of N750 to $1 and a benchmark crude oil reference price of $77.96 per barrel.
Bagudu further revealed that the FEC endorsed an Appropriation Bill for 2024, reflecting a total expenditure of N27.5 trillion—an increase of over N1.5 trillion from the previous estimate. Using the previous reference prices, the forecasted revenue stands at N18.2 trillion, surpassing the 2023 revenue, including that outlined in the two supplementary budgets. Notably, the deficit is lower than that projected for 2023.
In a related development, the Fiscal Policy and Tax Reform Committee briefed the FEC on its activities spanning approximately 90 days. The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, conveyed the committee’s proposal to eliminate VAT on diesel and increase the ratio of tax revenue to GDP to 18 percent, aligning with the African average.
Edun also provided updates on a $100 million financing initiative from the African Development Bank (AfDB) and a $15 million contribution from the Canada African Development Bank Climate Fund (CACF), inherited from the previous administration. The funds, constituting concessional borrowing at around 4.2 percent per annum, are allocated to waste management and road rehabilitation in Abia State.
Moreover, Edun disclosed that the AfDB sanctioned $1 billion concessional financing for Nigeria, featuring an eight-year moratorium and an interest rate of about 4.2 percent per annum. The loan, to be repaid over 25 years, is designated for general budget support. The FEC additionally greenlit a total limit of N2 trillion for use by the Ministry of Finance, aiming to optimize market dynamics and reduce interest rates on existing debt, potentially saving over 50 billion naira in debt servicing over time.
