By Omar Bah
Nigeria’s President Bola Tinubu has requested the Senate to approve an additional spending of 6.2 trillion naira ($4 billion) to cover shortfalls in this year’s national budget. This request was conveyed in a letter to lawmakers on July 17, 2024.
Tinubu has proposed implementing a one-time windfall tax on banks’ foreign exchange profits, which could generate significant additional revenue for infrastructure development, education, healthcare, and welfare programs. Senators have initiated discussions on a bill to authorize the request for further spending, a potential solution to the country’s financial challenges.
In December, legislators approved a 28.77 trillion naira budget 2024, marking the first annual spending plan under Tinubu’s leadership. Tinubu’s proposal aligns with the guidelines of an “Accelerated Stabilisation and Advancement Plan” (ASAP) developed by the finance ministry in collaboration with private sector leaders and economists. The plan is designed to address issues related to reforms aimed at fostering economic growth.
In May of last year, Tinubu made significant reforms by eliminating a costly petrol subsidy and devaluing the naira twice to boost economic growth. Investors well received these reforms. Despite the initial difficulties, such as a threefold increase in petrol prices, higher transportation costs, and a spike in inflation to a 28-year high, Tinubu has remained resolute in his dedication to these changes, contributing to a sense of stability amid economic challenges.
Tinubu informed lawmakers that 3.2 trillion nairas from the additional spending will be allocated to build critical infrastructure projects across the country. In contrast, 3 trillion nairas will be allocated for further recurrent expenditure requirements.
Nigeria’s economy has been facing slow growth at around 3%, below the 6% annual expansion target set by Tinubu when he took office last year. Tinubu has directed his economic management team to develop a two trillion-naira stimulus plan to tackle food supply issues and bolster critical sectors like energy, health, and social welfare.
