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Nigeria’s 2024 budget shifts focus: Minister of finance emphasises reduced reliance on borrowing, prioritises revenue generation

Wale Edun outlines a strategic shift towards revenue generation, leveraging technology, and capital expenditure for economic growth

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Following the official signing of the 2024 budget by President Bola Tinubu at the State House in Abuja, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, declared a significant departure from traditional borrowing-centric approaches. Edun outlined the government’s commitment to rely less on borrowing and prioritize revenue generation to finance the ambitious budget for the year.

Speaking after the budget signing ceremony, Edun emphasized the administration’s positive outlook on revenue generation forecasts for the year. The government aims to leverage technology and digitization to pool revenues from diverse sources into the consolidated revenue fund.

“As a percentage of GDP, the Nigerian 2024 budget deficit is down from 6.1% to 3.8%. So, we’re relying less on borrowing and more on revenue, and I think you have to take the two together,” stated Edun. He expressed optimism about the anticipated improvements in revenue and highlighted the government’s efforts to bring order to borrowing practices, eliminating reliance on the Central Bank’s printing of money.

Edun underscored the increased focus on capital expenditure, reaching around N10 trillion, as a pivotal aspect of the government’s strategy to drive economic growth. The shift in the budget structure signals a commitment to rejuvenate and galvanize the economy.

“The change in this budget is that it is focused on growing the economy. The capital expenditure is larger than the recurrent expenditure; over N10 trillion is going to be the capital expenditure, while recurrent is just about N8.8 trillion. I think that shows the direction of travel, it shows that we can expect an economy rejuvenated, re-galvanized, and set for growth,” Edun explained.

The 2024 budget, with a deficit of N9.18 trillion, reflects a substantial reduction compared to the N13.78 trillion in the 2023 budget. President Tinubu, during the budget presentation, highlighted that the deficit would be financed through new borrowings of N7.8 trillion and over N298.4 billion from the privatization of government assets.

In line with the government’s commitment to fiscal responsibility, President Tinubu has submitted a request to the Senate for approval of an $8.69 billion and €100 million loan as part of the external borrowing plan for 2024. Additionally, plans to boost government revenue through increased taxes are underway, with the administration setting a target of achieving an 18% tax-to-GDP ratio within the next three years.

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