The Federal Government of Nigeria has released its proposed budget for 2024, with a significant portion allocated to debt servicing and overshadowing allocation to sectors such as education, health, social development, and poverty reduction.
The budget, presented by the Minister of Budget and Economic Planning, Senator Abubakar Bagudu, estimates an aggregate expenditure of N27.50 trillion. However, debt servicing is expected to consume a substantial N9.18 trillion, nearly half of the total budget.
While the defense and security sector received the largest allocation with N3.25 trillion, representing 12 percent of the budget, the education sector was allocated N2.18 trillion (7.9 percent), and the health sector received N1.33 trillion (5 percent). Infrastructure was allocated N1.32 trillion (5 percent), and Social Development and Poverty Reduction received N534 billion (2 percent).
Despite these allocations, the overshadowing debt service raises concerns about the government’s ability to adequately fund critical sectors that directly impact the populace, such as education, health, and social development.
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The budget deficit is projected to be N9.18 trillion in 2024, representing about 50% of total federal government revenues and 3.88% of the estimated GDP. This high level of fiscal deficit is partly attributable to the proposed salary review of federal workers, increased pension obligations, and higher debt service costs.
The minister explained that of the aggregate revenue, N7.94 trillion, or 43.3 percent, is projected to come from oil-related sources, while the balance of N10.39 trillion is to be earned from non-oil sources.
While the government has made efforts to balance the budget and stimulate economic growth, the high level of the fiscal deficit and the significant allocation to debt servicing highlight the need for more prudent financial management and an increased focus on sectors that directly impact the populace, such as education, health, and social development.