Tinubu proposes N4.6 trillion deficit reduction in 2024 budget

President Bola Tinubu plans to reduce federal budget deficit in 2024, aiming to bring it down from 6.1% of gross domestic product (GDP) this year to approximately 3.9% next year.

In his first budget speech to lawmakers on Wednesday, Tinubu announced a total expenditure of N27.5 trillion for 2024, up from N20.5 trillion this year. He said the government will spend more on security, infrastructure development, and addressing the ongoing cost-of-living crisis.

“The budget deficit is projected at N9.18 trillion in 2024 or 3.88 per cent of GDP. This is lower than the N13.78 trillion deficit recorded in 2023, which represented 6.11 per cent of GDP,” he told lawmakers.

To achieve the narrower deficit, the government anticipates increased revenue from higher oil production and tax collection. Additionally, borrowing plans for 2024 are projected to be slightly lower than those of the current year.

President Tinubu expressed optimism about the nation’s economic trajectory, projecting GDP growth of at least 3.76% in 2024. He also forecast a moderation in inflation, with the rate expected to ease to 21.4%.

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The budget’s proposal for capital projects is N8.7 trillion, less than N9.92 trillion budgeted for non-debt recurrent expenditure. Debt repayment received N8.25 trillion.

He said the deficit will be financed by new borrowings totalling N7.83 trillion; N298.49 billion from privatization proceeds, and N1.05 trillion draw down on multilateral and bilateral loans secured for specific development projects.

He said that the budget would also place priority on investment environment optimisation, human capital development, poverty reduction and social security.

Tinubu said a conservative oil price benchmark of 77.96 dollars per barrel and a daily oil production estimate of 1.78 million barrels per day were adopted after a review of global oil market trends, and that a naira to dollar exchange rate of N750 per dollar was adopted for 2024 as well.