As the Senate opened debate on the 2024 budget on Thursday, the Majority Leader, Senator Bamidele Opeyemi, said the N9.9 trillion recurrent expenditure of the N27.5 trillion 2024 budget was too high, noting that it was about 43 per cent of the money bill.
The Senate began debating the general principles of the budget in Abuja on Thursday.
He observed that the total fiscal operations of the Federal Government would result in N9.8 trillion deficit, representing 3.88 per cent of the estimated GDP.
According to him, this is above the three per cent threshold set by the Fiscal Responsibility Act of 2007.
The Senate leader listed highlights of the budget including an oil price benchmark of 77.96 dollars per barrel and daily oil production estimate of 1.78 million barrels of condensates of 300,000 to 400,000 barrels per day and an exchange rate of N750 per dollar.
He stated that based on the fiscal assumptions and parameters, total federally-collectible revenue was N16.87 trillion in the budget, while total federally distributable revenue was N11.09 trillion
Opeyemi said the total revenue available to fund the 2024 budget was N9.73tn, which included revenues from 63 government-owned enterprises, while oil revenue was projected at N1.92tn, with non-oil taxes at N2.43tn among others.
Opeyemi said to finance the deficit would result in new borrowings totaling N7.83tn in addition to N294.49 billion expected from privatisation.
He said the deficit would also be financed from N1.06tn drawn from bilateral, multilateral loans secured for specific development projects programmes.
He spoke further, “But let me state here that the debt level of the federal government is still within sustainable limits.
“Very importantly, these loans are used to finance critical development projects and programmes aimed at improving our economic environment and ensuring effective delivery of public services to our people,” he said.
President Bola Ahmed Tinubu presented the estimates of N27.5tn to a joint session of the Senate and the House of Representatives on Wednesday.
Thursday was the first of the two allotted days by the Senate to debate the budget, preparatory for its second reading.
The second allotted day is Friday, December, 30.
The debate opened as several senators, including Sen. Mohammed Onawo (Nasarawa South), raised concerns that they had yet to see the details of the budget, which would have prepared them adequately to make contributions.
But, Deputy Senate President, Sen. Barau Jibrin, drew attention to the relevant Senate rule, which provides that the second reading stage is merely to look at the general principles and not the details of the budget.
He explained that the speech of President Tinubu already gave sufficient background information and direction on the budget to help the legislature to start a debate.
His intervention laid the concerns to rest as the Senate proceeded with the debate.
Most senators spoke more about the deplorable state of infrastructure in their immediate districts and constituencies, calling for the provision of more projects and the massive rehabilitation of those that had almost collapsed.
Some senators like Garba Musa Maidoki (Kebbi-South) noted that Nigeria’s problem had never been the lack of ideas and beautiful proposals but the lack of implementation.
President Tinubu, while presenting the estimates on Wednesday, gave some of the highlights.
He stated, “We have adopted a conservative oil price benchmark of 77.96 US Dollars per barrel and daily oil production estimate of 1.78 million barrels per day. We have also adopted a Naira to US Dollar exchange rate of 750 naira per US Dollar for 2024.
“Accordingly, an aggregate expenditure of 27.5 trillion naira is proposed for the Federal Government in 2024, of which the non-debt recurrent expenditure is 9.92 trillion naira while debt service is projected to be 8.25 trillion naira and capital expenditure is 8.7 trillion naira.
“Nigeria remains committed to meeting its debt obligations. Projected debt service is 45% of the expected total revenue.
“Budget deficit is projected at 9.18 trillion naira in 2024 or 3.88 percent of GDP. This is lower than the 13.78 trillion naira deficit recorded in 2023 which represents 6.11 per cent of GDP.
“The deficit will be financed by new borrowings totalling 7.83 trillion naira, 298.49 billion naira from privatisation proceeds and 1.05 trillion naira drawdown on multilateral and bilateral loans secured for specific development projects.
“Our government remains committed to broad-based and shared economic prosperity. We are reviewing social investment programmes to enhance their implementation and effectiveness.
“In particular, the National Social Safety Net project will be expanded to provide targeted cash transfers to poor and vulnerable households. In addition, efforts will made to graduate existing beneficiaries toward productive activities and employment.”
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