Tinubu Unveils Budget on Wednesday, FEC Approves $1 Billion Loan

Tinubu Unveils Budget on Wednesday, FEC Approves $1 Billion Loan

The Federal Executive Council (FEC), presided over by Minister Tinubu, has approved an increase in the 2024 budget to N27.5tn, up from the initially considered N26.01tn. Minister of Budget and Economic Planning, Abubakar Bagudu, revealed that the Federal Government is projecting N18tn in revenue for the fiscal year. Further details of the budget will be unveiled when President Tinubu presents it to the National Assembly on Wednesday.

The Medium Term Expenditure Framework (MTEF) passed by the National Assembly is under review by the Council. The revised MTEF benchmarks include an exchange rate of N750 to $1 and a benchmark crude oil price of $77.96, reflecting an increase of $4 from the previous approval. The changes aim to boost government revenue for priority areas such as health, education, infrastructure, and security.

Additionally, FEC approved a $1 billion budget support loan from the African Development Bank (AfDB) to enhance forex availability, with an interest rate of 4.2% for 25 years and an eight-year moratorium. Minister of Finance and Coordinating Minister of the Economy, Wale Edun, highlighted the loan’s purpose in supporting economic reforms, particularly in the power sector and social inclusion.

Edun also provided insights into the Fiscal Policy and Tax Reform Committee’s initiatives, including VAT removal on diesel to boost government revenue through digitalization and tax efficiency. The committee aims to increase the tax-revenue-to-GDP ratio to 18%, with short-term economic measures considered.

Furthermore, FEC approved a total limit of N2tn for the Ministry of Finance to navigate the market, aiming to reduce interest rates on outstanding debt and save approximately N50bn in debt servicing over time.

Ahead of the budget presentation, it was confirmed that Tinubu would present the appropriation bill to the National Assembly on Wednesday. The initial proposal of N26.1tn for the 2024 fiscal year, including new borrowings of N7.8tn, was approved by the Senate committee on Finance after interactive sessions with relevant agencies.

The comprehensive fiscal updates showcase the government’s strategic financial planning and initiatives to address economic challenges and enhance revenue generation.


Your email address will not be published. Required fields are marked *