The Minister of Finance and Coordinating Minister of the Economy, Wale Edun has stated that the federal government will rely less on borrowing to implement the 2024 budget and focus on revenue generation to finance the budget.
The Minister stated this after the signing of the 2024 budget by President Bola Tinubu at the state house, Abuja.
Mr. Edun explained that the administration is positive about the revenue generation forecast for the year and the government will leverage on technology and digitization to ensure that government revenues from diverse sources are polled to the consolidated revenue fund.
He said,
- “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. I think we’re very optimistic about the improvements in revenue that will take place.”
- “We bringing order to government borrowing, so Ways and Means are being eliminated by taking the funding that is required from the market, as opposed to from printing of money by Central Bank.”
Capital expenditure to drive growth
He also noted that the increase in capital expenditure to around N10 trillion is a pointer to what the administration hopes to focus on to spur growth in the economy.
He said,
- “But overall, 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”
Backstory
- The 2024 budget has a deficit of N9.18 trillion which is lower than the N13.78 trillion in the 2023 budget. This represents a drop of N4.60 trillion.
- The President stated during the budget presentation that the deficit will be financed by new borrowings of N7.8 trillion and over N298.4 billion from the privatization of government assets.
- Already, the President has written to the senate to approve $8.69 billion and €100 million loan as part of the external borrowing plan of 2024.
- The federal government has also disclosed plans to increase government revenue through taxes. The current administration has set a target of 1 an 8% tax-to-GDP ratio in the next three years.
