The Federal Executive Council (FEC) on Monday rose from its weekly meeting on Monday with the approval of N27.5 trillion aggregrate expenditure for 2024 Appropriation Bill.
The proposed budget is N1.5 trillion higher, than the initial N26 trillion earlier approved by the Fedeeal Executive Council before the recent passage of the Medium Term Framework ( MTEF) and Fiscal Policy document by the National Assembly.
Speaking with newsmen at the end of the FEC meeting presided over by President Bola Tinubu at the Council Chambers of the State House, Abuja, Minister of Budget and Economic Planning, Alhaji Atiku Bagudu, disclosed that the Council also approved a revised Medium Term Economic Framework and Fiscal Policy document which will be represented by the President to the National Assembly alongside the 2024 Appropriation Bill.
Describing the budget as “a process until it is signed into law”, the Minister said its details will be released when President Tinubu presents it to the National Assembly in a matter of days.
According to him, the MTEF and fiscal policy frameworks which had earlier been passed by the National Assembly were also further reviewed.
Bagudu added that the forecast revenue for 2023 stands at N18.2trillion, which, he said, is higher than the 2024 revenue including that provided in the two supplementary budgets while the deficit is lower than that of 2023.
His words: The 2024 budget proposal has the aggregate of N27.5 trillion which is an increase of over 1.5 trillion from the previously estimated using the old reference prices.
“The federal executive council considered the 2024 Appropriation bill. The MTEF was earlier approved by the National Assembly. It has an exchange rate of N700 to a dollar and a crude oil benchmark of $73.
“To improve revenue, the council further reviewed the MTEF, with an exchange rate of N750 to a dollar, and a crude oil benchmark of $77. This will significantly improve revenue.
“Federal Executive Council considered the 2024 Appropriation Bill. You may recall that the Medium Term Expenditure Framework was earlier approved and transmitted to the National Assembly, which the assembly graciously approved and that approved Medium Term Expenditure has the exchange rate of N700 to $1 and equally, the benchmark crude oil price at $73.96 cent.
“Mr. President’s determination to find more money to fund our priorities, today the Federal Executive Council further revised the Medium Term Expenditure Framework and Fiscal Policy Framework and two of the important decisions were to use an exchange rate of N750 to $1 and also a benchmark crude oil reference price of $77.96, meaning $4 more than the earlier approval.
“This will significantly increase government revenue that Mr. President intends to use in further supporting the ministries, departments and agencies in the execution of the eight priority areas, particularly Health, Education, infrastructure, security and other developmental areas.
“Equally, the Federal Executive Council approved the 2024 Appropriation Bill and the presentation of such to the National Assembly by His Excellency, Mr. President. The bill has an aggregate expenditure of N27,500,000,000,000, which is an increase of over N1.5 trillion from the previously estimated, using the old reference prices.
” The forecast revenue is now N18.32 trillion, which is higher than the 2023 revenues, including that provided in the two supplementary budgets. Equally and commendably, the deficit is lower than that of 2023. Details of the Renewed Hope Budget will be announced by Mr. President when he makes the presentation to the National Assembly”.
Also speaking, Minister of Finance and Coordinating Minister of the Economy, Wale Edun, revealed that FEC also approved a concessionary budget support loan of $1 billion and $100 million financing from African Development Bank ( AfDB) and $15 million from Canada-African Development Bank Climate Fund.
According to him: “I would like to give a summary of the memos that I had approved at Council today and of course, they were all to do with financing. First of all, there was an inherited financing, an inherited loan processing, which was to do with the $100 million financing from African Development Bank and $15 million from the Canada-African Development Bank Climate Fund.
“Essentially, it was processed before this administration came in and, so it has been inherited. Essentially, it is concessional borrowing, around for 4.2% per annum by Abia State, through the federal government. So the funds are to be lent to Abia State and they are for waste management and rehabilitation of roads in Umahia and Aba, in particular. That was approved.
“Secondly, there was financing of $1 billion, concessional financing of 25 years, eight years moratorium at about the same for 4.2% per annum, which was approved by the African Development Bank for this administration and really, it was in recognition of the macro economic measures that have been taken, the swift movement towards macro stability, restoring revenue, improving the foreign exchange situation, and so forth, that have been taken by this government. The reward, as far as the African Development Bank, a concessional financing organization, was to provide $1 billion in general budget support
“In order to keep working hard and maximizing the ability of the government to use the markets and to take advantage of different situations and improve situations, the Federal Executive Council approved a total limit of N2 trillion to be available for use by Ministry of Finance in order to go in and out of the market and essentially to, where possible, bring down the rate of interest on the current outstanding.
“So essentially, it will be refinancing and the view is that there will be an opportunity to save about N50 billion or more in debt servicing over time by giving back expensive debt refinancing with cheaper funding”.
The Presidential Fiscal Policy and Tax Reform Committee, headed by Taiwo Oyedele, briefed the FEC on Monday, providing updates on its activities after 90 days of operation.
Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, who provided hints from the Committee’s briefing to the Council, lauded the works so far done, noting that its report was well received by the President.
His words: “There was a briefing by the Fiscal Policy and Tax Reform Committee, essentially they’ve been working for roughly 90 days, they’ve been working very well and very effectively, such that they are in a position to have even impacted the economy by coming up with initial reforms, as well as signposting the way forward the in terms of very important targets.
“So in a nutshell, the policy on VAT removal on diesel is from them, they are looking to help boost fiscal situation of the government by increasing revenue, particularly tax revenue, through digitalization, additional efficiency and rationalization of the range of taxes that we have at the moment.
“They are looking to increase the ratio of tax-revenue-to-GDP to 18%, which is the average for Africa; so many countries are above that level. It is actually about double where we are now and within a matter of a few years, their target is to reach 18%. Other economic measures, in the short term, are being contemplated and their report was well received by Mr. President and indeed, the whole Federal Executive Council”, he said.
On his part, the Attorney-General of the Federation and Minister of Justice, Mr Lateef Fagbemi, said Council approved Nigeria’s draft Human Rights reports for further transmission to the United Nations Commission on Human Rights.
Fagbemi who made this known after the Monday FEC meeting stated that the approval is for the fourth cycle of the United Nations Universal Periodic Review and in fufillment of the practice of reporting human rights records.
“The memo I presented was for approval of draft national report for the fourth cycle of the United Nations Universal Periodic Review. As you all know, Nigeria is a member of so many international jurisdictions, including the United Nations, and at the United Nations there’s a practice of reporting your human rights records, among others, periodically. We reported in 2009, in 2013 and 2018.
“So since 2018 we have not made any report and there’ll be a meeting where all these reports will be considered in February 2024. We believe that it’s just right that we forward this report ahead of that meeting in February 2024.
“After engaging critical stakeholders in the country in each of the six geopolitical zones and including the three tiers of government; the national, state and local government levels, we compiled the report which we are sending to the United Nations on human rights universal periodic review for consideration.
“Before we can do that, we have to bring it to the Executive Council. So we got approval to forward the report to the United Nations”, he said.
Deji Elumoye in Abuja
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