FEC Passes MTEF, Projects N26.01tn Budget for 2024

•Benchmarks crude oil price at $73.96 per barrel, projects 1.7mbpd, pegs dollar at N700  

•Justifies fresh $1.5bn World Bank loan

•Directs continuation of inherited 12,000 kilometers of roads and 24 bridges 

•Says meeting will no longer hold weekly

Deji Elumoye in Abuja

The Federal Executive Council (FEC) rose from its second meeting in six weeks yesterday, with the approval of the Medium Term Expenditure Framework as well as the 2024-2026 Fiscal Strategy Paper (MTEF/FSP)  where some projections were made for the 2024 proposed budget to be presented to the National Assembly by President Bola Tinubu for consideration.

Specifically, the aggregate expenditure was estimated at N26.01 trillion for the 2024 budget, which included statutory transfers of N1.3 trillion and non-debt recurrent expenditure of N10.26 trillion.

The Minister of Budget and National Planning, Atiku Bagudu, who made this disclosure while briefing  newsmen after the Council’s meeting presided over by  Tinubu at the State House, Abuja.

Bagudu, who revealed that the President would soon present a supplementary budget meant to provide for the financial implications of the wage awards and other commitments made to workers as a result of the removal of fuel subsidy, equally assured that the January-December budget cycle would be maintained.

He affirmed that the executive was required by the Fiscal Responsibility Act to present to the national assembly ahead of a budget presentation, a document which would provide the medium term economic outlook for the economy.

According to him, the FEC made assumptions based $73.96 per barrel of crude oil and an exchange rate of N700 to $1.

His words: “Now, it was presented on the background of the commendable measures that have been taken since June in order to restore macroeconomic stability by particularly the deregulation of petroleum prices, which we maintained that subsidies are gone and indeed the regulation of the foreign exchange market.

“So, Council deliberated on this as well as the implication of this and all measures promised in the ‘Renewed Hope Agenda’ on consumer credits, mortgages, mortgage, reversed or dismissed institution as well as funding the newly aligned institutional changes particularly ministries with specific functions that are able to generate growth so that would be better for our country.

“The council members acknowledged the medium term expenditure framework, and it is agreed that we can go ahead to the next step of consultation and presentation to the national assembly.”

Speaking on the proposed 2024 budget, the Minister said: “The aggregate expenditure is estimated at N26.01 trillion for the 2024 budget, which includes statutory transfers of N1.3 trillion non-debt recurrent expenditure of N10.26 trillion.

“Debt service estimated at N8.25 trillion as well as N7.78 trillion being provided for personnel pension cost.”

According to him, the volume of the debt service budget increased, “because N22.7 trillion Ways and Means was securitised, meaning it became a federal government debt at nine per cent.” 

This, he explained, amounted to N2.1 trillion as debt service, adding that the personnel cost rose significantly due to transfers from the agreement between the federal government and the organised labour.

Asked whether the government  planned to present a supplementary budget to the lawmakers and when, Bagudu said, “Yes, there would be a supplementary budget because there are continuing obligations and there are responses to security which can be immediate.”

He explained that the President was mindful of the financial implications of the government’s commitments to labour due to the hardship caused by fuel subsidy removal, adding that he was equally concerned about budgeting processes and integrity so as to ensure that monies appropriated were spent in the period for which they were appropriated.

Also briefing newsmen,  the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, announced that FEC approved the application for $1.5 billion financing from the World Bank, noting that the International Development Association has approved the fund, which he said, was free or carries zero interest.

According to him: “The total is $1.5 billion and the background is just as you heard from the minister of planning and budget. The world today operates a high interest rate policy, as the developed world looks to fight inflation.

“They do it by restricting money, keeping interest rates high so that you can get inflation down. What that means is that interest rates for everybody else, become not just high but very painful, if not unaffordable within that context.”

Edun, also stated Nigeria has been able to make macroeconomic moves that have attracted the attention of the global financial institutions.

He explained: “We have been able to take the tough decisions to restore balance in the economy in the government’s finances that has warranted support, that has engendered and has elicited even support from the multilateral development banks and is on the basis of that, that the World Bank is willing to consider and to process on our behalf $1.5 billion of concessional financing, relatively cheap financing and financing that will be dispersed relatively quickly.”

The Minister also added that FEC approved the procurement of the loan based on its affordability.

Edun explained that the African Development Bank has also approved $80 million financing for the Ekiti Knowledge Zone Project which has also now been approved by the council.

His words: “This financing is for a project in Ekiti called the Ekiti Knowledge Zone Project, that is basically to support young people and their quest to take on technology to use it to be employed to be trained and to benefit from being part of the knowledge economy, being part of the technological wave that is present very much in Nigeria, which is becoming a bigger and bigger share of the economy.

“So it’s $80 million to help the young people in the sector of knowledge economy technology and communications generally.

Also speaking, the Minister of Works, Dave Umahi, said  FEC approved the continuation of over 12,000 kilometers of roads and 24 bridges, some of them dating back 20 years.

“You know, FEC approved for the continuation of these inherited projects and the new proposal and directed that Federal Executive Council constitute a committee, made up of the Chief of staff, Minister for Finance and Coordinating Minister of Economy, Minister for Works Minister for a planning and Budget, GCEO/GMD of NNPLC, chairman of FIRS and SSA on Tax Reform, to meet and come up with strategies to source for the funds and everything pertaining to the funding,” he said.

Meanwhile, FEC meetings would now be held on Mondays as against the Wednesdays under the previous administrations.

Minister of Information, Mohammed Idris, who announced this at the press briefing, noted however that the meetings may not be held weekly but whenever there are pressing issues to discuss.