Senate And House of Reps Jointly Approved 2024 Budget Bill, Tinubu May Assent to It Today
Members of the House of Representatives and the Senate on the New Year Eve jointly passed the federal government’s 2023 appropriation bill into law, to maintain the January to December budget cycle.
President Tinubu who is on the yuletide season holiday in Lagos is expected to give his assent to the bill, after addressing Nigerians in a nationwide broadcast this morning.
The N28.77 trillion budget approved by the National Assembly is made up of debt servicing (N8.2 trillion), non-debt recurrent expenditure (N8.7 trillion), and capital votes of N9.9 trillion.
It has a deficit of N9.18 trillion.
The budget is based on the crude oil benchmark price of $77.96, daily production of 1.78 million barrels of crude oil, and an exchange rate of N800 to a dollar.
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Works ministry received the highest allocation of N892.4 billion, followed by agriculture and food security (N857.4 billion), health and social services (N485.5 billion), finance (N463 billion) and education with (N417 billion).
It stipulates that the apex bank may grant temporary advances to the federal government in respect of temporary deficiency of budget revenue provided such overdraft do not surpass five per cent of the government revenue from the previous year.
The Senate is invited to note that from available information by the CBN the Consolidated Revenue Fund (CRF) account of the Federal Government of Nigeria (FGN) stood at N7.3trillion as of December 11, 2023, that is due to domestic debt servicing, Principal and interest.
While the federal government is considering various measures to forestall the use of Ways and Means advances for domestic debt servicing, it has become highly imperative to securitirise the outstanding Ways and Means Advance of the Federal Government of Nigeria before the end of the year 2023.
The securitisation of the Ways and Means will lead to the realisation of the following benefits amongst others:
Reduction of debt service costs as the interest rate for the securitise Ways and Means advanced is lowered at 9 per cent per annum compared to MBR which is 0.3 per cent
The savings arising from the much lower interest rate will have to reduce the deficit in the budget.
The improvement in debt transparency as securitised Ways and Means Advances are included in the public debts statistics.
In view of the foregoing, the senate is invited to kindly consider and approve the securitisation of the outstanding debit balance of N7.3 trillion in the same order as at December 2023.
