InfoStride News has reported a notable forecast from the federal government, projecting a substantial N4.60 trillion reduction in the budget deficit for the 2024 fiscal year. This represents a significant 33.5% decrease when compared to the budget deficit recorded in 2023.
President Tinubu unveiled this projection during his presentation of the 2024 appropriation bill to the joint session of the National Assembly. In the proposed 2024 budget, the deficit is estimated at N9.18 trillion, marking a notable decrease from the N13.78 trillion recorded in the 2023 budget.
The reduction in the deficit is also reflected in the deficit to GDP ratio, which saw a decrease of 2.22% in the 2024 budget. The deficit to GDP ratio for the 2024 budget stands at 3.88%, a significant drop from the 6.1% recorded in the 2023 budget.
President Tinubu emphasized the government’s commitment to meeting its debt obligations, noting that the projected debt service is expected to be 45% of the total anticipated revenue. He stated, “Budget deficit is projected at 9.18 trillion naira in 2024 or 3.88% of GDP. This is lower than the 13.78 trillion naira deficit recorded in 2023, which represents 6.11% of GDP.”
In terms of funding for the budget deficit, President Tinubu outlined the sources, indicating that new borrowings, revenues from privatization, and drawdown from multilateral organizations will contribute to financing the deficit. He explained, “The deficit will be financed by new borrowings totaling 7.83 trillion naira, 298.49 billion naira from Privatization Proceeds, and 1.05 trillion naira drawdown on multilateral and bilateral loans secured for specific development projects.”
As part of the broader financial strategy, President Tinubu has sought approval from the National Assembly for external borrowings under the 2022-2024 external borrowing plan. In a letter to the National Assembly, he requested approval for $8.69 billion and €100 in external loans.
The total budget proposal for the year 2024 stands at N27.5 trillion. President Tinubu is optimistic about the economic outlook, anticipating a growth rate of 3.76% and expressing hope for a moderation in inflation to 21.4%.
In summary, the 2024 budget presentation reflects a significant reduction in the budget deficit and deficit to GDP ratio. The government’s commitment to meeting debt obligations and the outlined sources of funding indicate a strategic approach to managing the fiscal landscape. President Tinubu’s request for external borrowings underscores the importance of a multifaceted financial strategy in achieving the economic goals outlined in the budget proposal.
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