President Bola Tinubu has formally asked the national assembly to increase the 2024 appropriation act by N6.2 trillion. This request, outlined in a letter read by Senate President Godswill Akpabio on the Senate floor, raises the 2024 budget from the initial N28.7 trillion to N34.9 trillion.
Tinubu’s proposal aims to allocate N3.2 trillion for infrastructure projects and N3 trillion for recurrent expenditure. “Pursuant to 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 stated.
The amendment to the appropriation act seeks to provide substantial funding for Renewed Hope Infrastructure Projects and other critical infrastructure across the country. The proposed allocation includes N3.2 trillion dedicated to these projects and N3 trillion for further recurrent expenditure required for the proper operation of the federal government. These funds will be sourced from revenues accruing to the federal government.
In addition to the budget increase, Tinubu has asked the national assembly to amend the Finance Act of 2023 to impose a tax on windfalls obtained by banks from foreign exchange gains. This one-time windfall tax is intended to fund capital infrastructure development, education, healthcare, and welfare initiatives, all of which are components of the Renewed Hope Agenda.
On September 12, 2023, the Central Bank of Nigeria (CBN) directed banks to stop using gains from the revaluation of the naira to pay dividends or finance operations. The financial regulator observed that the FX regime change provided banks with the opportunity to significantly increase the naira value of their foreign currency assets and liabilities.
In June 2023, the CBN officially unified the multiple FX rate systems, merging all FX windows into the investors’ and exporters’ (I&E) window. This policy led to the depreciation of the local currency, causing considerable volatility in the FX market. The proposed budget increase is seen as a crucial step in addressing Nigeria’s infrastructure deficit and ensuring the smooth operation of the federal government. The emphasis on infrastructure is part of Tinubu’s broader strategy to stimulate economic growth and improve the quality of life for Nigerians.
Tinubu’s letter to the national assembly detailed the necessity of the budget increase. He highlighted the importance of investing in infrastructure to support economic development and create jobs. The proposed N3.2 trillion for infrastructure projects is expected to cover a wide range of initiatives, including transportation, energy, and water supply.
The additional N3 trillion for recurrent expenditure is intended to address the operational needs of the federal government. This includes funding for salaries, maintenance of government facilities, and other essential services. Tinubu emphasized that these allocations are important for maintaining government functions and ensuring the delivery of public services.
