Nigeria’s President Seeks Massive Budget Increase to Fund Infrastructure and Recurrent Expenditure
In a move that could have far-reaching implications for Nigeria’s economy, President Bola Tinubu has asked the National Assembly to increase the 2024 appropriation act by a staggering N6.2 trillion. This massive increase would raise the budget from its initial N28.7 trillion to N34.9 trillion.
According to a letter read by Senate President Godswill Akpabio on the floor of the upper legislative chamber, Tinubu’s request seeks to amend the budget to allocate N3.2 trillion for infrastructure projects and N3 trillion for recurrent expenditure. These funds would be sourced from the federal government’s coffers.
The President is also seeking to amend the Finance Act of 2023 to impose a one-time windfall tax on foreign exchange gains realized by banks in their 2023 financial statements. These revenues would be used to fund capital infrastructure development, education, and healthcare initiatives, as well as welfare programs.
The move comes amidst a foreign exchange crisis, which has led to the devaluation of the Naira in June last year and January 2024. The Central Bank of Nigeria (CBN) has directed banks to stop using gains from the revaluation of the naira to pay dividends or finance operations.
Nigeria’s budget watchdog, BudgIT, has raised concerns over the government’s plan to run four concurrent budgets, which could lead to severe budget credibility issues.
With this massive budget increase, Nigeria is poised to embark on a significant investment drive, aimed at reviving its economy and addressing pressing developmental challenges. The outcome of this initiative will be closely watched by investors, economists, and policymakers around the world.
