The two chambers of the National Assembly may pass the harmonised Medium Term Expenditure Framework (MTEF) today after its scrutiny and approval by the relevant committees.
MTEF is the framework on which fiscal policy rests and its passage by federal lawmakers is in anticipation of the 2024 budget estimates being expected from the presidency.
National Assembly sources told InsideBusinessNG that the two chambers agreed on the provisions of the MTEF last Friday, having adopted the figures from the presidency.
The presidency submitted the MTEF to the two chambers of the National Assembly on Tuesday, October 31 after its approval by the Federal Executive Council (FEC). It is recalled that the MTEF was prepared by the Ministry of Budget and National Planning.
Immediately after its passage, the presidency is expected to submit the 2024 budget estimates to the two chambers of the National Assembly for their consideration of what would be the first budget of President Bola Tinubu’s administration, laying out the fiscal policy of the regime.
Details of the MTEF published on the website of the Budget Office of the Federation (BoF) show the key parameters for the three-year framework show an oil price benchmark of $73.96 for 2024, $73.76 for 2025, and $69.90 for 2026 while the country is projected to produce 1.78 (mbpd) in 2024, up from the 1.72 mbpd revised forecast as at July 2023. Oil production in the MTEF is projected at 1.80 mbpd and 1.81 mbpd for 2025 and 2026 respectively.
In the published MTEF, the exchange rate was projected at $700 for 2024, $665.61 for 2025 and $669.79 for 2026. Although inflation has risen to 26.72 percent in September 2023, it was projected to be 21.40 percent in 2024, 20.30 percent in 2025, and to drop to 18.60 percent in 2026.
Non-oil GDP is projected at N223,989.2 billion for 2024, N249,188.0 billion for 2025, and N278,251.7 billion for 2026 while Oil GDP (N’bn) was projected at N12,316.0 in 2024, N13,225.7 billion in 2025 and N14,272.0 billion in 2026.
In 2024, the FGN’s aggregate expenditure is estimated at N26.01 trillion including N2.73 trillion for GOEs’ expenditures and grants/donor-funded projects amounting to N639.92 billion. This is higher than the corresponding 2023 FGN aggregate expenditure estimate of N22.65 trillion (which includes the N819.54 billion supplementary provision) by 14.8 percent (or about N3.36 trillion).
The 2024 expenditure estimate includes statutory transfers of N1.30 trillion and non-debt recurrent expenditure of N10.26 trillion (including N200 billion for the recurrent component of the Special Intervention Programme) while N8.25 trillion and N243 billion are for Debt Service and Sinking Fund to retire maturing bonds issued to local contractors/creditors, respectively, in the 2024 budgeted expenditure.
N6.78 trillion (inclusive of N1.02 trillion for GOEs) is provided for personnel and pension costs, an increase of N904.49 billion or 15 percent over the 2023 provision, and 40 percent of the projected aggregate revenues for 2024. The statutory transfer includes N114.80 billion (representing 1% of the consolidated revenue fund) earmarked for the Basic Health Care Provision Fund (BHCPF) and N117.67 billion for the North-East Development Commission (NEDC).
The N26.01 trillion 2024 budget is expected to be funded by federal government revenue of N16.96 trillion (N5.91 trillion or 54% more than the 2023 Budget).
Of the aggregate revenue available to fund the 2024 Budget, N6.95 trillion, or 41 percent is projected to come from oil-related sources and the balance of N10.01 trillion is to be earned from non-oil sources.
The FGN share of non-oil tax is projected at N3.52 trillion compared to N2.43 trillion in 2023, while its share of Minerals and Mining revenues is N4.56 billion in 2024 from N3.64 billion in 2023.
The projection for Independent Revenue is moderated to N1.91 trillion, down from N3.17 trillion, while the projection for Grants and Donor funded projects is N639.92 billion.
Further funding is expected from the N316.68 billion dividends from the Bank of Industry, Development Bank of Nigeria, Galaxy Backbone, and Bank of Agriculture while N736.04 billion is projected from the FGN’s share of Oil Price Royalty, Education Tax, Electronic Money Transfer Levy, and Drawdowns from Special Accounts.