The 2024–2026 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), which contain the planned N26 trillion in spending and $73.76 oil benchmark for the 2024 fiscal year, were approved by the House of Representatives on Tuesday.
Following the adoption of the joint Committees on Finance, National Planning and Economic Development and Aid, Loans and Debt Management recommendations, which were made public by Hon. James Abiodun Faleke, the resolution was passed.
Following careful review of the Ministries, Departments, and Agencies’ (MDAs) submissions, the House approved the suggested oil benchmark prices for 2024, 2025, and 2026, which are $73.96, $73.76, and $69.90 per barrel, respectively.
In addition, the House authorized 1.78 Mbps, 1.80 Mbps, and 1.81 Mbps of daily crude oil output for 2024, 2025, and 2026, respectively, contingent upon the Nigerian National Petroleum Corporation Limited (NNPCL) confirming verifiable and actual deliveries.
The parliamentarians also approved the N700, N665.61, and N669.79 exchange rates to US$1 that the Executive had suggested for the years 2024–2026. However, they cautioned that the Federal Government should continue its strong efforts to increase domestic output (both oil and non-oil) in order to increase the growth of its foreign reserves.
Lawmakers further demanded of the federal government that “all goods made in the country should be categorically prohibited from entering the country and customs tariffs adjusted accordingly.”
In order to stop people from using the parallel market, they also gave the Central Bank of Nigeria (CBN) the responsibility of making sure banks have access to foreign cash so they can pay importers and other users.
The parliamentarians authorized GDP growth rates of 3.76%, 4.22%, and 4.78% for the years 2024, 2025, and 2026 in response to the Federal Government’s reaction of budgetary measures to stimulate the economy through major investment in infrastructure, SMEs, and the agricultural sector.
Additionally, the House approved the following rates of inflation: 18.60% in 2026, 20.30% in 2025, and 21.40% in 2024.
Speaking about the report’s summary, Hon. Faleke noted that the proposed spending of N26 trillion, of which N16.9 trillion was retained, new borrowings of N7.8 trillion (including borrowing from abroad and domestic sources), a 49% debt service to revenue ratio, pensions, gratuities, and retiree benefits of N1.2 trillion, and a fiscal deficit of N9 trillion (including GOEs) were all in line with the guidelines in the overview of the framework for revenues and expenses, which serves as the foundation for the 2024 Federal Government of Nigeria budget.
Effective revenue monitoring and oversight by the relevant National Assembly Committees would enable the Federal Government to achieve its expected revenues of N16.96 trillion for the fiscal year 2024.
In his opinion, the N9.048 trillion, N10.02, and N11.48 projected fiscal deficits for the fiscal years 2024, 2025, and 2026 are, respectively, 22%, 13.6%, and 1% less than the N11.6 trillion fiscal deficit for 2023.
The government’s suggested approach to financing the deficit in 2024 is to boost funding from the proceeds of privatization and foreign borrowing while decreasing funding from domestic borrowing and multilateral and bilateral project-tied loans.
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He added that the 2024–2026 MTEF and FSP show the Federal Government’s intention to gradually reorganize its debt portfolio in order to achieve a balanced domestic–external debt ratio.
He bemoaned the fact that a sizable portion of the revenue-generating agencies under the federal government participated in arbitrary, pointless, and overbudget spending.
Hon. Faleke went on to say that because the Fiscal Responsibility Act of 2007 lacked any disciplinary measures, the majority of Revenue Agencies were in violation of it.
Hon. Faleke claimed that some Revenue Generating Agencies were involved in joint venture agreements, particularly in the oil and gas sector where Forward Sales Agreements are executed for upfront payments for future product delivery without recourse to the National Assembly, while noting that most agencies are not complying with financial reporting standards.This pattern was also seen in other industries, most notably the power sector, where NBET and NDPHC signed power purchase agreements that committed the federal government to an enormous $40 million Take Or Pay agreement each month, despite the agencies’ full knowledge of the nation’s inability to fulfill its end of the bargain.
He claims that these agreements expose the nation to international arbitrations and enormous contingent liabilities; the government’s contingent obligations are projected to be N6.9 trillion in 2024 alone, and N7 trillion in 2025 and 2026, respectively.
Speaking about the contingent liabilities table, the lawmakers noted that the aforementioned contingent liabilities resulted from various agreements signed by different GOEs/MDAs, some states, and the Federal Government of Nigeria; however, they also noted that the majority of these agreements were never brought before the National Assembly for consideration, meaning that they were governed by international laws or legal systems.
The legislators noted that a lot of organizations, especially those in charge of collecting stamp duties, do not efficiently use information and communication technology (ICT) to collect taxes.
The Committee expressed disapproval over the fact that NIPOST Properties Limited and NIPOST Transport and Logistics Limited, two of its subsidiaries, were established from NIPOST with private people as shareholders and no share allocated to NIPOST as an organization.
He said that the Ministry of Finance had released N10 billion for recapitalization and restructuring in 2022, but there had been no matching outcome.
The House also pointed out that the projected tax waivers, which would total N 2.7 trillion in 2024, N 3.2 trillion in 2025, and N 3.8 trillion in 2026, would still be given out despite the deficit budget. For 2024, 31%, and 32% of the entire fiscal deficit, respectively, are made up of these.
