The Federal Executive Council, headed by President Bola Tinubu, has ratified a budgetary benchmark of N26 trillion for the 2024 fiscal year during their meeting on Monday.
Atiku Bagudu, Minister of Budget and National Planning, shared a brief overview of the meeting, which marked the second since Tinubu’s presidency.
Briefing State House correspondents at the end of the FEC, alongside his colleagues from the Ministry of Information and National Orientation, Mohammed Idris, Minister of Finance and Coordinating Minister of Economy, Wale Edun, Works Engr. Dave Umahi, Industry, Trade and Investment, Doris Uzoka-Anite, Labour and Employment, Simon Lalong as well as the Minister of State for Labour, Nkeiruka Onyejecha, Bagudu said Council has approved the 2024-2026 Medium Term Expenditure Framework, MTEF, and Fiscal Strategy Papers, FSP.
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The FEC sanctioned the 2024-2026 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Papers (FSP), as confirmed by Bagudu.
Among the MTEF’s assumptions, the FEC set a crude oil price of $73.96 and an exchange rate of N700 per US dollar.
“Now, it was presented on the background of the commendable measures that have been taken since June in order to restore macroeconomic stability, particularly the deregulation of petroleum prices, for which we maintained that subsidies are gone and indeed the regulation of the foreign exchange market,” Bagudu said.
“So Council deliberated, as well as the implication of this and all measures promised in the renewed hope agenda, consumer credits, mortgages, reversed or dismissed institutions, 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 acknowledge 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.”
The executive is expected to present the document to the National Assembly before December 31, 2023, after the ministries and parastatals saddled with the responsibilities of perfecting the budget estimates have done their job, in line with the Fiscal Responsibility Act.
The Fiscal Responsibility Act stipulates that the executive must present the Medium Term Expenditure Framework (MTEF) to the National Assembly before submitting the budget proposal. The MTEF serves as a comprehensive document outlining the medium-term economic outlook for the nation.
However, the N26 trillion budget proposal has been described as unrealistic by many who pointed at the nation’s current economic turmoil. Nigeria’s oil revenue has seen a significant drop in recent years, scuttling the country’s capacity to fund its budget without borrowing. For instance, net earnings from crude oil and gas as at the first quarter of the year stood at N486 billion, while net earnings from solid minerals was N1.99 billion.
Personnel cost at the same period was N978 billion – creating a huge revenue deficit. Against this backdrop, which has fueled calls for cuts in the cost of governance, funding the budget is seen as mission impossible and leaves the government with no other option than to borrow more.