In Episode 4 of Follow the Money with Ugodre, highlights of the 2024 budget proposal kicked off proceedings. Ugo noted during the budget proposal that the FG said they achieved a nine-month revenue of N8.65 trillion, 4.5% higher than the targeted revenue of N8.28 trillion, with corporate income taxes and VATs being a significant contributor to the revenue drive.
He observed that while the Federal Government consistently falls short of meeting its revenue goals, it consistently surpasses its expenditure projections. Nonetheless, during the nine months from January to September 2023, the government’s actual expenditure stood at N12.7 trillion, a significant difference from the targeted N18.6 trillion spending for the same period. Within this amount, a notable N5.7 trillion was allocated to debt servicing.
He then moved on to analysing the 2024 budget of N26 trillion, with the projected revenue being N18.3 trillion. The budget translates to a fiscal deficit of N9 trillion in 2024, with N8 trillion being targeted for debt servicing.
Ugo then noted that the law stipulates a threshold of 3% as the projected level of fiscal deficit to GDP, however, for the 2024 budget, the fiscal deficit is 3.88% of GDP which the constitution allows in cases of “extreme security concerns.”
What is still going on with NAFEM?
The Naira fell to N927/$ at the NAFEM on Friday, December 1, 2023, however, with the intra-day low falling to N701/$, Ugo questioned the rationale behind the infrequencies in the market.
We’re unlikely to hear from the CBN this year
Ugo analysed some of the macroeconomic indicators including the inflation rate, and monetary policy rate, considering the silence of the Central Bank for the past few months.
The Central Bank Governor recently noted that the bank would be primarily focused on its core mandate of fixing inflation rates in the country.
What is the Central Bank’s Vision for inflation rate?
Ugo noted that it was important for the CBN to provide information concerning the economy, highlighting that we’ve received information from the fiscal side (the government).
What is the central bank’s vision for 2024, 2025, 2026? What is their plan for monetary policy? Ugo highlighted that there was a need for an inflation target.
The Stock Market is doing incredibly well
The Nigerian Stock Market has been doing extremely well and it’s projected to outperform inflation in 2023. The NGX All-Share Index gained 3.08% in November, and it seems investors are betting on hope.
The market is performing as one of the best stock markets in the world as listed companies have been generating significant returns this year.
Ugo noted that banks have made a lot of money this year due to the Naira devaluation, and this has been one of the significant drivers of the market.
Ugo highlighted some of the best-performing stocks this year, ACCESSCORP, up 112% year-to-date, BUAFOODS which is up 206% year-to-date, GEREGU, up 167% year-to-date, DANGCEM, up 22% year-to-date, MTNN, 10.7% gain this year. While the NGX is up 39.3% year-to-date.
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