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FG Pegs Naira at N700 to Dollar for 2024 Budget

The Federal Government has revealed that it will base its 2024 budget on a crude oil price of $73.96 per barrel and an exchange rate of N700 to the dollar. The government also aims to allocate N26 trillion for the fiscal year, with plans to submit the budget to the National Assembly by December 31, 2023.

At a Federal Executive Council (FEC) meeting presided over by President Bola Tinubu, the Minister of Planning and Budget, Atiku Bagudu, disclosed these details. The government intends to maintain the January-December budget implementation cycle, and President Tinubu will soon present the 2024 appropriation bill to the National Assembly for approval.

Bagudu explained that the budget estimates include N1.3 trillion for statutory transfers, N10.26 trillion for non-debt recurrent expenditure, N8.25 trillion for debt service, and N7.78 trillion for personnel pension cost. He emphasized that the government is required by the Fiscal Responsibility Act to present a document outlining the medium-term economic outlook for the economy before presenting the budget to the National Assembly. This document includes assumptions like the reference price for crude oil and the exchange rate.

Furthermore, the government approved applications for $1.5 billion in financing from the World Bank and another $80 million from the African Development Bank (AfDB). The Minister of Finance, Wale Edun, noted that the funding would be provided through the International Development Association and is characterized by virtually interest-free loans. These financial arrangements aim to support Nigeria’s efforts to restore economic balance and prudent financial management.

It’s worth noting that despite concerns from financial stakeholders about the country’s rising debt burden, the International Monetary Fund (IMF) has stated that Nigeria’s total public debt is manageable and does not pose immediate risks to the economy. However, the IMF did express concerns about the increasing cost of debt servicing in Nigeria.

Bagudu also mentioned that there would be a supplementary budget to address ongoing obligations and security responses following the removal of the petroleum subsidy. He reassured that these perceived delays would not affect the January-December implementation cycle.

Additionally, the Federal Government has changed the day of FEC meetings from Wednesdays to Mondays. The meetings may not be held weekly, except when there are pressing issues to discuss. During the meeting, three newly appointed ministers were sworn in, and a minute’s silence was observed in honor of former FCT Minister Mobolaji Ajose-Adeogun, who recently passed away.

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