By Ken Afor
With less than 48 hours until the new year, the National Assembly on Saturday passed the budget for the 2024 fiscal year.
Noticeably, the Senate and House of Representatives increased the budget from N27.5 trillion, which was initially proposed by President Bola Tinubu on Wednesday, November 29, to N28.7 trillion.
This shows an increase of over N1.2 trillion.
The Senate also approved the executive arm of the government’s proposal to increase the exchange rate from N750 to N800 per dollar.
Additionally, they gave approval to the 1.78mbpd daily oil production, US$77.96 oil benchmark price, and a GDP growth rate of 3.88%.
The approval of the budget followed the consideration of the report from the Senate Committee on Appropriation, which was presented by the chairman, Olamilekan Adeola, representing APC, Ogun West.
It would be recalled that on Wednesday, November 29, 2023, President Tinubu presented the budget, titled “Budget of Renewed Hope,” to the joint session of the National Assembly.
On Friday, December 1, 2023, the Senate successfully passed the second reading of the 2023 budget, amounting to N27.5 trillion.
However, prior to the passage of the second reading, on Thursday, November 30, 2023, a significant discussion on the fundamental principles of the appropriation bill took place.
Following this, both chambers promptly adjourned their plenary sessions to focus on the budget defence sessions at the committee level.
It is pertinent to note that Tinubu’s inaugural budget as the President of Nigeria was formulated with a non-debt recurrent expenditure of N9.92 trillion, while N8.25 trillion was allocated for debt service and N8.7 trillion for capital expenditure.
Breakdown of the approved 2024 budget are:
Aggregate – 28,777,404,73, 861
Debt service – N8,270,960,606, 831
Recurrent (non-debt) expenditure – N8,768,513,380,852
Contribution to the development of the Capital expenditure – N9,995,143,298,28
Meanwhile, Senator Adeola implored the executive to guarantee adherence and allocate sufficient funds to the Ministries, Departments, and Agencies (MDAs).
Subsequently, the Senate transitioned into the Committee of Supply, which deliberated upon and approved the budget.
In addition, the Senate has granted approval for the securitization of the remaining 7.388 trillion Ways and Means, as per President Tinubu’s request. This initiative aims to effectively reduce the cost of debt service and prolong the repayment duration for the current loans.
The government can utilize the Ways and Means provision to obtain short-term or emergency financing from the Central Bank in order to address any delays in projected cash receipts or fiscal shortfalls.
As stated in the President’s letter to the Senate, the interest rate for these securitized Ways and Means advances has been lowered to 9% per annum, which is a decrease from the MPR of +3%.
The Debt Management Office (DMO) has gazetted the parameters for the securitisation of Ways and Means advances.
According to these parameters, the federal government will issue debt securities to the Central Bank of Nigeria (CBN) with a tenor of 40 years. These debt securities will carry an interest rate of 5% and will have a 3-year moratorium on principal repayments.
