The President Bola Tinubu-led administration is planning to spend N6.75tn of its projected N27.5tn budget on defence and security, education, and infrastructure in 2024.
This is as it earmarked N6.48tn (96 per cent of the amount to be spent on the three sectors mentioned above) for personnel and pension, an increase of N576.16bn over the 2023 provision. The administration is also eyeing N10.4tn from tax, dividends and others.
The Minister of Budget and National Planning, Abubakar Bagudu, disclosed this during the presentation of the 2024 budget breakdown on Wednesday.
Earlier, while presenting the 2024 Appropriation Bill, themed ‘Budget of Renewed Hope’ on the floor of the National Assembly on Wednesday, Tinubu said the budget proposal was aimed at completing critical infrastructure projects that would help address structural problems in the economy while lowering the costs of doing business for companies and the cost of living for the average Nigerian.
In his presentation, he declared, “The 2024 Appropriation has been themed the Budget of Renewed Hope. The proposed budget seeks to achieve job-rich economic growth, macro-economic stability, a better investment environment, enhanced human capital development, as well as poverty reduction and greater access to social security.
“Defence and internal security are accorded top priority. The internal security architecture will be overhauled to enhance law enforcement capabilities and safeguard lives, property and investments across the country.
“Human capital is the most critical resource for national development. Accordingly, the budget prioritizes human development with particular attention to children, the foundation of our nation.”
Tinubu noted that the government expects the country’s economy to grow by a minimum of 3.76 per cent (GDP as of the end of September 2023 was 2.54 per cent) despite the current inflationary headwinds which are expected to moderate to 21.4 per cent in 2024. Inflation was 27.33 per cent as of the end of October.
Highlighting the components of the 2024 budget proposal, he said, “After a careful review of developments in the world oil market and domestic conditions, we have adopted a conservative oil price benchmark of $77.96 per barrel and daily oil production estimate of 1.78 million barrels per day.
“We have also adopted a Naira to US Dollar exchange rate of N750/$ for 2024. Accordingly, an aggregate expenditure of N27.5tn is proposed for the Federal Government in 2024, of which the non-debt recurrent expenditure is N9.92tn while debt service is projected to be N8.25tn and capital expenditure is N8.7tn.”
According to analysis, funding to the education sector (N2.18tn) is 101.85 per cent more than the N1.08tn that was budgeted for the sector in the 2023 appropriation.
Of the amount, N1.23tn is for the Federal Ministry of Education and its agencies, N251.47bn for the Universal Basic, Education Commission, and N700bn as transfers to tertiary education trust fund.
While presenting the budget, Bagudu stated that N50bn of the amount would be for the student loan scheme of the Federal Government.
Funding to the defence and security sector (which includes the military, police, intelligence, and paramilitary) increased by 46.39 per cent to N3.25tn from the N2.22tn that was earmarked in 2023’s appropriation for the defence and police affairs ministries.
Based on the document presented by the minister of budget, the allocation to the health sector improved by 23.15 per cent to N1.33tn from N1.08tn in the 2023 appropriation.
Of the amount, N1.07tn has been provisioned for the federal ministry of health and its agencies, N137.21bn for Gavi/immunisation funds, including counterpart funding for donor-supported programmes, and N125.74bn as transfer to basic healthcare provision fund.
Additionally, N1.32tn will be expended on the provision of infrastructure in the power, transport, water resources, aviation, works and housing sectors. Explaining reasons for the low provisions, the former Kebbi governor said the president had directed for increased private sector involvement in infrastructure provision.
He revealed that all ministries have been given matching orders to woo willing domestic and foreign investors to improve the nation’s infrastructure.
Bagudu stated, “Equally on infrastructure spending, part of the instruction of Mr President to the cabinet is that as he has done in Lagos, we have to bring in private sector investments into infrastructure. He has mandated all ministries to examine how to access investors who are willing to put money into infrastructure. What the government can put into infrastructure is small compared to what the private sector can bring.
“So, a number of roads and railways, airports, housing and a number of infrastructure projects will be considered. the government funding is to capitalise private investment.”
Also, N534bn has been budgeted for social investments and poverty reduction programmes in 2024. The government expects to spend N10.26tn on non-debt recurrent expenditure, N8.25tn on debt servicing, N243bn on sinking funds, and N8.70tn on capital expenditures.
The minister further noted that the 2024 budget was prepared amidst the backdrop of a challenging global and domestic economic environment.
He declared, “This Prevailing global environment is characterised by slowing global growth; persistent inflationary pressures prompting monetary tightening with the inherent negative impact on capital inflow to emerging markets economies.
“Also constrained investment spending; supply-chain disruptions; and rising geo-political tensions, including the Russia and Ukraine war have severely affected global food and energy prices.”
While giving insights on the performance of the 2023 budget, Bagudu stated that Federal Government has gotten N8.65tn in revenues as of September 2023 with an oil revenue of N1.42tn and non-tax revenue of N2.50tn
Bagudu stated that the estimated aggregate expenditure for 2023 (inclusive of the supplementary budget) is N24.82 trillion, but actual spending has been N13.7tn.