Nigeria has unveiled its budget plans for the year 2024, earmarking an impressive 26.01 trillion naira (approximately $34 billion) for various expenditures. Atiku Bagudu, the Minister of Budget, shared the details with reporters, shedding light on key assumptions and allocations within this ambitious financial framework.
Under the proposed budget, Nigeria expects an oil price of $73.96 per barrel and will peg its exchange rate at 700 naira per US dollar. Additionally, the country aims to achieve an oil production target of 1.78 million barrels per day as part of its 2024 spending plan.
Notably, a substantial portion of the budget, 8.25 trillion naira (equivalent to $10.8 billion), has been allocated for servicing the nation’s debt, underscoring the importance of managing the country’s financial obligations. Another significant allocation of 7.78 trillion naira will be directed towards covering salaries and pensions for civil servants.
Bagudu also shared economic growth projections, anticipating a rate of 3.76% in the coming year. However, it is imperative to note that Nigeria is currently grappling with a significant inflation rate, which has reached a 20-year high of 27.72%. The government anticipates a moderation in inflation to 21% in the 2024 fiscal year.
Inflation has been a persistent challenge for Nigeria since 2016, leading to the erosion of incomes and savings for its citizens. To address this issue, the country’s central bank has raised interest rates to their highest levels in nearly two decades.
The economic pressures on Nigeria have intensified, particularly after President Bola Tinubu’s decision to scrap a long-standing petrol subsidy. This move resulted in a tripling of fuel prices and led to a depreciation of the national currency by more than 50%, causing prices to surge in Africa’s leading oil-producing nation and its most populous.
Nigeria’s 2024 budget reflects the government’s determination to navigate these economic challenges and pave the way for sustainable growth, even as inflation remains a critical concern. The coming year will be a test for the country’s fiscal policies as they strive to stabilize the economy and mitigate the impacts of inflation and subsidy reforms.