Nigeria parliament to pass 2024 budget before year-end

Nigeria's parliament is gearing up to pass the 2024 Appropriation Bill in an effort to maintain the January to December financial cycle, aligning with President Bola Ahmed Tinubu's request. Johnson Chukwu, the CEO of Cowry Asset Management, recently discussed the proposed budget of Renewed Hope, which outlines a total expenditure of $27.5 trillion. As Chukwu delved into the details, he raised concerns regarding the revenue projections and the challenges the government may face in meeting them. The budget highlights key sources of revenue, including oil revenue, non-oil taxes, and revenue from government-owned enterprises. However, a significant deficit and debt servicing obligations pose significant hurdles to budget implementation. Chukwu expressed skepticism about some of the budget's assumptions, particularly in areas like food production and crude oil output. The proposed daily crude production target of 1.78 million barrels faces considerable obstacles, given Nigeria's current production levels and OPEC projections. With total budgeted revenue at 18.2 trillion naira, but revenue generation falling short in recent years, meeting expenditure targets remains a major challenge. As Chukwu highlighted, the government's struggle to implement the 2023 budget due to revenue shortfalls underscores the impending difficulties ahead. Against this backdrop, the government's plans to sell assets and borrow substantial amounts to finance infrastructure projects raise concerns about escalating debt levels. Chukwu emphasized the need for a strategic shift in funding infrastructure, advocating for private sector involvement in concession arrangements to optimize project financing and delivery. He highlighted the inefficiencies in government-funded infrastructure projects and stressed the urgency of exploring alternative funding models. Chukwu's assessment underscores the critical importance of revenue generation and prudent financial management in navigating Nigeria's budgetary challenges. As the government charts its course for 2024, balancing revenue targets, expenditure priorities, and debt sustainability will be key focus areas. The interview concluded with a discussion on tax reforms and the imperative of expanding the tax base through economic growth and investment attraction. Addressing Nigeria's revenue constraints and enhancing tax compliance will require a multifaceted approach, encompassing economic stimulus, regulatory enhancements, and investor confidence-building measures. As Nigeria's fiscal landscape evolves, proactive policy measures and robust financial planning will be essential in shaping a sustainable economic trajectory. Johnson Chukwu's insights shed light on the intricacies of Nigeria's budgetary framework and underscore the imperative of strategic governance and financial prudence in steering the nation's fiscal course.