Nigeria’s 2024 Budget Focuses on Defence, Security, Education, and Infrastructure

The President Bola Tinubu-led administration in Nigeria is planning to allocate N6.75 trillion of its projected N27.5 trillion budget for 2024 to key sectors such as defence, security, education, and infrastructure. The Minister of Budget and National Planning, Abubakar Bagudu, revealed this during the presentation of the budget breakdown. The administration aims to spend N6.48 trillion (96% of the allocated amount) on personnel and pensions in these sectors. The budget, themed ‘Budget of Renewed Hope,’ focuses on completing critical infrastructure projects and reducing the cost of living for Nigerians.

Key Allocations:

1. Education: N2.18 trillion, a 101.85% increase from the 2023 provision.
2. Defence and Security: N3.25 trillion, a 46.39% increase from the 2023 allocation.
3. Health: N1.33 trillion, a 23.15% increase from the 2023 provision.
4. Infrastructure: N1.32 trillion, with a focus on private sector involvement.
5. Social Investments and Poverty Reduction: N534 billion.
6. Non-Debt Recurrent Expenditure: N10.26 trillion.
7. Debt Servicing: N8.25 trillion.
8. Capital Expenditure: N8.7 trillion.
9. Funding Sources: N7.94 trillion from oil-related sources, N10.39 trillion from non-oil-related sources.

President’s Remarks:

• Tinubu emphasized the priority given to defence, internal security, and human capital development.
• The administration targets a minimum economic growth of 3.76% in 2024.
• A conservative oil price benchmark of $77.96 per barrel and a daily oil production estimate of 1.78 million barrels per day were adopted.
• The Naira to US Dollar exchange rate is set at N750/$ for 2024.
• Aggregate expenditure is proposed at N27.5 trillion, with non-debt recurrent expenditure at N9.92 trillion, debt service at N8.25 trillion, and capital expenditure at N8.7 trillion.

Funding Strategy:

• The government aims to generate N10.39 trillion from tax, dividends, and other sources.
• The budget deficit is projected at N9.18 trillion (3.88% of GDP), lower than the N13.78 trillion recorded in 2023 (6.11% of GDP).
• The deficit will be financed by new borrowings of N7.83 trillion, N298.49 billion from privatisation proceeds, and N1.05 trillion drawdown on multilateral and bilateral loans for specific development projects.

Government’s Challenges:

• Despite a reduction in the deficit to GDP ratio, high fiscal deficit in 2024 is attributed to a proposed salary review, increased pension obligations, and higher debt service costs.

Reaction from Lawmakers:

• Lawmakers lauded the budget, especially its attempt to reduce the budget deficit.
• Some opposition members criticized the anthem chanting in support of Tinubu during the president’s presentation, viewing it as an attempt to force acceptance of Tinubu’s presidency.

Opposition and PDP’s Reaction:

• The PDP condemned the actions in the National Assembly, expressing concern about Nigeria sliding into cronyism and totalitarianism.
• The APC defended the anthem chanting, considering it a part of the president’s mandate.

The budget emphasizes realistic assumptions, reduced reliance on borrowings, increased revenue, and investment promotion. The administration seeks to boost tax revenues, explore public-private partnerships, and prioritize infrastructure development through private sector involvement.