AMID dwindling revenue resources and a huge debt servicing over Nigeria’s rising debt, President Bola has asked the national assembly to increase the 2024 appropriation act by N6.2 trillion.
The latest request would see the 2024 budget increased to N34.9 trillion from an initial N28. 7 trillion budget Tinubu signed into law on January 1.
Tinubu’s request was contained in a letter read by Senate President Godswill Akpabio on the floor of the upper legislative chamber on Wednesday, July 17.
Tinubu is seeking an amendment to the budget to provide for N3.2 trillion for infrastructure projects and N3 trillion for recurrent expenditure.
“Under section 58 (2) of the Constitution of the Federal Republic of Nigeria as amended, I forward herewith the above-named bills for consideration and passage by the Senate,” Tinubu said.
“The appropriation act amendment bill seeks to amend the principal act to provide the sum of N3,200,000,000,000 for Renewed Hope Infrastructure Projects and other critical infrastructure projects to be undertaken across the country and the sum of N3,000,000,000,000 to meet further recurrent expenditure requirements necessary for the proper operation of the federal government.
“They shall be funded by accruing to the federal government of Nigeria,” he further said.
Tinubu also asked the National Assembly to amend the Finance Act of 2023 to tax windfalls gotten by banks owing to “foreign exchange gains”.
“Furthermore, the proposed amendments to the Finance Acts 2023 are required to a one-time windfall tax on the foreign exchange gains realised by banks in their 2023 financial statements to fund capital infrastructure development, education, and healthcare as well as welfare initiatives all of which are components of the Renewed Hope Agenda,” he added.
It would be noted that a large chunk of this extra-budget passage is to be funded by borrowing from multi-lateral lending institutions as Nigeria continues to borrow, amid worries of dwindling revenue resources and inability to meet the 1.7 million barrel of oil in the budget benchmark.
The ICIR reported that public debt stock rose from N97.35 trillion in December 2023 to N121.67 trillion in March.
The implication of these rising debt is fiscal strain and huge budget deficit.
“One of the implications is the fiscal strain these excessive debts will put Nigeria into. You look at the servicing costs of these debts which outweigh revenues. It’s already causing a huge budget and fiscal deficit, “a professor of management economics, Emmanuel Abolo, said.
He added that the huge debt would crowd out public investments in critical areas of the economy, which would slow down economic growth and development.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.