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Renewed Hope: the 2024 FGN Budget – Coronation Economic Note




The 2024 FGN Budget, titled “Budget of Renewed Hope,” was signed by President Bola Ahmed Tinubu on 02 January’24. There were a few revisions made.

The aggregate expenditure is estimated at N28.7trn which is 11.9% or N1.2trn higher than the initially proposed N27.5trn. This figure is 15.9% higher than the 2023 FGN budget of N24.82trn.

Notably, the allocation to capital expenditure in the approved 2024 budget rose by 13.8% to N9.9trn, accounting for 34.5% of the total expenditure, compared to the initial proposed figure of N8.7trn. The increased capital spending aligns with the FGN’s intent to reduce the country’s infrastructure deficit gap. We note that the 2024 budget estimates point towards a fiscal deficit of N9.1trn (approximately 3.88% of the 2024 estimated nominal GDP), which is considerably lower than N13.8trn estimated in the 2023 FGN budget.

The projected fiscal expenditure also includes an increase in statutory transfer to N1.7trn from the initial N1.3trn in the proposed budget However, non-debt recurrent expenditure declined by – 15.5% to N8.7trn from the initially proposed N10.2trn. However, the debt service estimate remained unchanged at N8.2trn.

Furthermore, there was a slight modification in the assumptions underlying the budget. The exchange rate was revised upward to N800/USD from N750/USD. However, other assumptions remained unchanged (oil price benchmark of USD77.9/b, oil production of 1.78mbpd, inflation rate of 21.4%, and GDP growth rate of 3.76% y/y).

There were notable budgetary reallocations, for example, the National Judicial Council received a substantial increase by +107% from N165bn to N341.6bn. Similarly, the allocation to the National Assembly increased by 74.23% to N344.8bn from N197.9bn.

This marks the highest allocation to the National Assembly. Other budgetary reallocations include Niger-Delta Development Commission: N338.9bn (previously N324.8bn), Universal Basic Education Commission: N263billion (previously N251.4bn), Public Complaints Commission: N14.4bn (previously N13.6bn), Northeast Development Commission: N131.8bn (previously N126.9bn), Basic Healthcare Provision Fund: N131.5bn (previously N125.7bn) National Agency for Science and Engineering
Infrastructure: N131.5bn (previously N125.7bn).

The estimated revenue to fund the 2024 budget was revised upward to N19.6trn, 78.2% higher than the 2023 provision of N11trn. The breakdown of this revenue estimate shows that N9.2trn
(46.9%) is expected from oil-related sources while the balance of N10.4trn (53.1%) is expected
from non-oil sources.

Overall, the revenue projections point towards expectations of improved revenue inflow, on the back of the removal of PMS subsidy, fx depreciation following the fx liberalization policy, and increased collection of non-oil taxes.

In our view, achieving the proposed revenue target in 2024 would require deliberate efforts towards tackling the challenges in the oil sector. Average oil production from January – November ‘23 was 1.46mbpd. This is below the FGN 2023 oil production target of 1.72mbpd. In 2024, we expect oil production to range between 1.4 -1.6mbpd, still below the FGN’s 2024 oil production target of 1.78mbpd.

On the other hand, it is worth highlighting that actual non-oil revenue has exceeded FGN’s target by an average of 9.4% since FY2021. Additionally, as at end-September ’23, we note an overperformance of non-oil revenue (N2.5trn exceeding the prorated target of N1.8trn). We expect the FGN to increase its tax mobilization initiatives and further enhance independent revenue generation and collection efforts, especially from government-owned enterprises (GOEs). The proposed fiscal deficit of N9.1trn is expected to be financed by new borrowings totaling c.N7.8trn (domestic: c.N6.0trn, external: c.N1.7trn). Other sources of deficit financing include privatization proceeds of c.N298.4bn and drawdowns on bilateral/multilateral projects/programs of c.N941.1bn.

Regarding ways and means advances from the CBN, we note the senate’s approval to securitize c.N7.3trn of the ways and means advances to a 40-year bond at 5% interest. In early 2023, N23trn was securitized to a 40-year bond at 9% interest. This brings the total amount of securitized ways and means advances to N30.3trn. Although securitization would reduce the cost of debt service and enhance debt transparency, it will concurrently elevate the total public debt stock to approximately N95.2trn. This represents 47.7% of the 2022 nominal GDP, surpassing the debt management office’s (DMO) debt-toGDP ratio target of 40% set for the period of 2020-2023. However, we understand that there are plans to revise Nigeria’s debt-to-GDP ratio target.

The revenue targets are laudable and indeed optimistic. However, we must emphasize that without a significant acceleration of revenue-based fiscal consolidation efforts, the FGN may fall short of meeting its revenue targets. A scenario that could potentially have negative implications for debt sustainability. However, it is important to recognize that challenges present opportunities for strategic adjustment and enhanced fiscal policies. Encouraging proactive measures and innovative strategies to boost revenue can position the FGN for greater fiscal resilience and contribute to achieving its financial goals for sustainable development.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq,, Investorplace, and many more. He has over two decades of experience in global financial markets.

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NLNG Boosts Cooking Gas Production to 1.5 Million Metric Tonnes Annually



cooking gas cylinder

Nigeria Liquefied Natural Gas Limited (NLNG) has announced a significant milestone in its operations, boosting its annual production of liquefied petroleum gas (LPG), commonly known as cooking gas, to over 1.5 million metric tonnes.

This surge in production underscores NLNG’s commitment to meeting the rising demand for clean cooking energy in Nigeria.

The entirety of NLNG’s 1.5 million tonnes production is now being sold domestically within Nigeria.

Moreover, the company has initiated a landmark shift by starting to supply LPG in naira, moving away from the traditional practice of trading in United States dollars.

This move aligns with calls from stakeholders in the oil and power sectors advocating for naira transactions, especially amidst the challenges posed by currency fluctuations.

During a panel session at the 7th Nigeria International Energy Summit in Abuja, NLNG’s General Manager of Finance, Fatima Adanan, highlighted the company’s dedication to enhancing LPG penetration across the country.

Adanan emphasized NLNG’s vision to make Nigeria a better place by promoting the use of cleaner energy sources like gas.

While NLNG’s production surge is commendable, Adanan acknowledged that Nigeria’s LPG requirements surpass the current output, necessitating imports to bridge the gap.

However, NLNG remains committed to expanding its production capacity to meet the nation’s energy needs and drive increased adoption of LPG as a cleaner cooking fuel.

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CBN Raises Benchmark Interest Rate by 400 Basis Points to 22.75%



Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has raised the benchmark interest rate by 400 basis points to a record 22.75%.

The decision made by the Monetary Policy Committee (MPC) comes amidst rising inflationary pressures and growing uncertainty in Africa’s largest economy.

Nigeria’s inflation rate rose to 29.90% in January 2024, the highest in over two decades while the nation’s unemployment rate quickened to 5% in the third quarter of 2023. Suggesting that the rising costs have continued to drag on both new job creation and the existing ones.

This coupled with a series of policy adjustments implemented by President Bola Ahmed Tinubu has plunged economic productivity and eroded consumer spending as citizens grapple with high fuel prices, electricity tariffs, a record-high foreign exchange rate, and insecurities.

Therefore, it is surprising that the Monetary Policy Committee (MPC) led by the CBN will further increase borrowing costs by 400 basis points at a time when job creation is paramount.

While the economy reportedly grew by 3.46% in the fourth quarter (Q4) of 2023 on the back of robust performance of the services sector, this growth is yet to crystalise as businesses and citizens have taken to the street protest against the harsh economic situation.

Economic experts have started questioning the data from the National Bureau of Statistics (NBS) given its lack of correlation between the data and economic reality.


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President Tinubu Unveils Geometric Power Plant in Aba After 20-Year Wait



Geometric Power Plant

After two decades of anticipation, President Bola Tinubu, through his representative Vice President Kashim Shettima, inaugurated the long-awaited Geometric Power Plant in Aba, a significant milestone in the city’s quest for reliable electricity supply.

The event, which also saw the commissioning of three rehabilitated roads by Abia State Governor Alex Otti, symbolizes the culmination of years of perseverance and determination to transform Aba’s power landscape.

Addressing the audience, Vice President Shettima hailed the project as a testament to the power of visionary leadership and unwavering commitment to progress.

He said the Geometric Power Plant exemplifies the transformative impact of strategic infrastructure investments on local communities.

Governor Otti echoed similar sentiments, emphasizing the importance of the power project in positioning Aba as a hub for national and international business ventures.

He commended the efforts of Geometric Power Limited while urging them to uphold transparency and avoid exploiting consumers.

The inauguration of the Geometric Power Plant comes amidst growing concerns over Nigeria’s power infrastructure and the need for sustainable solutions to address electricity shortages.

The project, with a capacity of 188MW, holds promise for significant improvements in power supply across Abia State, benefitting nine out of seventeen local government areas.

The Managing Director of Geometric Power Limited, Ben Caven, underscored the scale of investment involved, totaling $800 million.

He highlighted the comprehensive nature of the project, which includes the installation of new power substations and a 27km natural gas pipeline, signaling a comprehensive approach to enhancing Aba’s energy infrastructure.

In conclusion, the inauguration of the Geometric Power Plant represents a transformative moment for Aba, offering renewed hope for economic growth and prosperity powered by reliable electricity supply.

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