This is contained in a breakdown document of the 2024 appropriation bill.

The item listed as “Financing Item” was in the sectoral allocation details released by the Chairman, Senate Committee on Appropriations, Solomon Adeola.

The move is believed to be an attempt to finance public debts as well as reduce the fiscal burden on the part of the federal government.

The document also indicated that the government expects to generate N2.8 trillion from government-owned enterprises as a net surplus in the 2024 fiscal year.

The 2024 budget proposal of N27.5 trillion was presented to the National Assembly by President Bola Tinubu last Wednesday.

The budget christened “Budget of Renewed Hope” contains national revenue estimated at N18.32 trillion with a deficit of N9.18 trillion.

Moreover, the government projects a revenue growth of 3.76% in the 2024 fiscal year.

Public-Private Partnership to Maintain Economy Stability

While presenting the budget on Wednesday, the President noted that the purpose of the bill is to ensure macroeconomic stability, increase revenue, reduce deficit as well and increase capital expenditure and allocation to reflect the key priority areas of his administration.

Tinubu also emphasized that his administration would promote a public-private partnership model to drive economic stability. He added that his administration would make provisions to leverage private capital for big-ticket infrastructure projects in energy, transportation and other sectors. A move he claimed is critical to diversify the economy as well as drive infrastructural projects in the country.

He said,

“In preparing the 2024 Budget, our primary objective has been to sustain our robust foundation for sustainable economic development. A critical focus of this budget and the medium-term expenditure framework is Nigeria’s commitment to a greener future.

• “Emphasizing public-private partnerships, we have strategically made provisions to leverage private capital for big-ticket infrastructure projects in energy, transportation and other sectors.
• “This marks a critical step towards diversifying our energy mix, enhancing efficiency, and fostering the development of renewable energy sources. By allocating resources to support innovative and environmentally conscious initiatives, we aim to position Nigeria as a regional leader in the global movement towards clean and sustainable energy.”

In addition, Minister of Finance and Co-ordinating Minister of the Economy, Wale Edun, speaking on the budget, said the privatization effort will drive macroeconomic growth as well as allow investors to participate optimally in the economy.

He said,

• “There is privatization in the budget. That is the direction of travel to create a stable macro-economic environment in which investors can come in and the government is yielding grounds to them and allowing them to come in and invest and provide goods and services to Nigerians.”

More Insights

With a debt service-to-revenue ratio of 73.5% a public debt totalled N87. 38 trillion, Nigeria still struggle with revenue generation to fund its capital and recurrent expenditures. Currently, the country’s deficit to GDP ratio stands at 6.1%. However, President Tinubu projects a reduction to 3.9% in 2024.

In the past, there has been a public outcry against any move from the government to offload some of the public assets to the private sector to get more revenue to fund its expenditures.

However, with a tightening in revenue growth and a huge public debt, the sales of the assets will provide the government needed to meet its fiscal obligations.

Accordingly, the President said his administration targets a revenue growth of 18.32 trillion to fund the 2024 budget.

He said,

• “The budget deficit is projected at 9.18 trillion naira in 2024 or 3.88% of GDP. This is lower than the 13.78 trillion naira deficit recorded in 2023, which represented 6.11% of GDP. The deficit will be financed by new borrowings totalling 7.83 trillion naira, 298.49 billion naira from privatization proceeds, and 1.05 trillion naira drawn down on multilateral and bilateral loans secured for specific development projects.”