Analysts, on Thursday, assessed President Bola Ahmed Tinubu’s 2024 budget presentation to the National Assembly, concluding that while the budget displays ambition, its implementation could pose challenges,Daily Trust reports.
President Tinubu, in his inaugural budget, presented estimates of N27.5 trillion for the 2024 fiscal year to the National Assembly, surpassing the 2023 budget of N24.82 trillion by N2.7 trillion.
The budget proposal relies on a N750 per dollar exchange rate, an oil benchmark of $77.96 per barrel, oil production of 1.78 million barrels per day, a GDP growth rate of 3.76%, and an inflation rate of 21.4%.
With total projected revenue of N18.32 trillion and a deficit of N9.18 trillion (3.88% of GDP), N8.7 trillion is allocated for capital projects out of the N27.5 trillion aggregate expenditure. The recurrent expenditure of N18.51 trillion includes N10.26 trillion for non-debt recurrent expenditure, N8.25 trillion for debt servicing, and N234 billion for sinking funds.
To finance the deficit, President Tinubu outlined plans for N7.83 trillion in new borrowings, N298.49 billion from privatisation proceeds, and N1.05 trillion from multilateral and bilateral loans for specific development projects.
However, analysts express concerns about the viability of these projections given the current economic landscape. The Lagos Chamber of Commerce and Industry (LCCI) emphasizes that, relative to Nigeria’s GDP, the budget’s 12.2% expenditure is notably lower compared to African peers such as South Africa, Egypt, Kenya, and Ghana.
Professor Adeola Adenikinju, from the University of Ibadan, believes the budget isn’t overly ambitious but highlights the need for government commitment and dedication. He underscores the unpredictability of oil prices and suggests a contingency plan.
Funding the budget, according to experts, requires measures to block leakages, cut down on governance costs, and collaboration between monetary and fiscal policies to reduce inflation. The involvement of the private sector, especially in infrastructure development, is also recommended.
Other analysts stress the need to explore non-oil revenue sources, reduce recurrent expenditure, and institutionalize budget tracking for effective implementation. The Lagos Chamber of Commerce and Industry calls for improved budget performance in capital expenditure, focusing on transport infrastructure to alleviate logistical challenges.
Despite concerns, Bismarck Rewane of Financial Derivatives Company Limited notes that many Nigerians are more concerned about the impact of rising food prices on their daily lives.
In summary, while acknowledging the budget’s strategic objectives, experts emphasize the importance of addressing implementation challenges, reducing deficits, exploring non-oil revenue sources, and optimizing budget performance for economic growth.