Why FEC increased budget for 2024 to 27.5 trillion naira - Atiku Bagudu

Why FEC increased budget for 2024 to 27.5 trillion naira – Atiku Bagudu

Minister of Budget and Economic Planning, Atiku Bagudu, has claimed that current economic realities have forced the Federal Government to increase the proposed budget for 2024 from the original N26 trillion to N27.5 trillion.

Mr. Bagudu made the disclosure while briefing state house correspondents on the latest developments at the end of the Federal Executive Council (FEC) meeting presided over by President Bola Tinubu at the Council Room of the Presidential Villa, Abuja. .

He said further details of the budget would be announced when the president formally submits it to parliament in the coming days.

Bagudu also said that the MTEF and fiscal policy framework passed by Parliament will be further reviewed.

According to him, “the total amount is N27.5 trillion, an increase of more than N1.5 trillion from the previous estimate using the old reference price.”

The minister revealed that the revenue forecast for 2024 is NEB 18.2 trillion, which he explained is higher than the revenue for 2023.

He said, “The Federal Executive Council considered the 2024 Appropriation Bill. The MTEF was earlier approved by the National Assembly. The exchange rate is $1 = 700 Naira and the crude oil benchmark is $73.

“In order to improve revenue generation, the board further reviewed the MTEF with an exchange rate of 750 naira to the dollar and a crude oil benchmark of 77 dollars. This will significantly improve revenues.”

Similarly, the Council approved the 2024 Appropriations Act and its submission to Congress by the President, he said.

Finance Minister and Coordinating Minister for the Economy Wale Edun told a press conference that the FEC had approved a $1 billion budget support loan from the African Development Bank (AfDB).

“We had a briefing from the Committee on Fiscal Policy and Tax Reform. Basically, they’ve been working for about 90 days. They’re working very well, very effectively, and they’re proposing some early reforms,” ​​he said. And we are in a position to even influence the economy by guiding the way forward on very important goals.

“So, in a nutshell, the policy on the abolition of value added tax on diesel is from them. The government is trying to improve its fiscal situation by increasing tax revenue.

“They aim to raise the tax revenue to GDP ratio to 18 percent, which is the African average. So many countries are above that level. This is about double what it is now, and within a few years The goal is to reach 18%.

He further revealed that other economic measures are being considered in the short term and that the report has been well received by the President and the Council.

He proceeded further by summarizing the memo approved at the meeting.

“First of all, there was an inheritance loan, an inheritance loan transaction related to a $100 million loan from the African Development Bank and $15 million from the Canada-African Development Bank Climate Fund.

“Basically, it was taken care of before this administration took office, so it has been carried forward. Essentially, Abia State is taking concessional borrowings through the federal government of about 4.2% per annum. , this money is to be lent to Abia State and earmarked for waste management and road rehabilitation in Umuahia and Aba among others. It has been approved,” he said.

Edun continued: “Secondly, there was a $1 billion concessional loan approved for this administration by the African Development Bank for 25 years with an eight-year grace period of approximately 4.2% per annum.

“And in fact, it was a recognition of the macroeconomic measures taken by this government, the rapid movement towards macro stabilization, revenue recovery, improving exchange rate conditions, etc.” The African Development Bank, the concessional lending institution. As far as it was concerned, the reward was to provide $1 billion in general budget support.

“Finally, in order to continue our efforts and maximize the government’s ability to take advantage of the market and take advantage of different situations to improve the situation, the Federal Executive Council has set an upper limit on the total amount that the Treasury can use. Approved to make it trillion naira, to go in and out of the market and basically reduce the interest rate on the current balance if possible.

“It is essentially a refinancing and our view is that by refinancing expensive debt and repaying it with cheaper funds, there will be an opportunity to save about N50 billion or more in debt servicing in the long run.”

Source: dailypost.ng

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