The Senate has given its approval to the Medium-Term Economic Framework (MTEF) and Fiscal Strategy Paper (FSP) for the period 2024 to 2026. Senator Sani Musa, the chairman of the Joint Committee on Finance, presented the MTEF/FSP to the Senate, which subsequently endorsed several recommendations.
Key decisions and projections include an inflation rate of 21.4% for 2024, 20.3% for 2025, and 18.6% for 2026. Notably, the October inflation rate reported by the National Bureau of Statistics is 27.33%, while KPMG projects a year-end inflation rate of 30%, contrasting with the government’s expectation of a decline in 2024.
Other approved measures encompass:
- Crude Oil Production: 1.78 million barrels per day
- Crude Oil Price: $73.6 per barrel
- Exchange Rate: N700 to the dollar
- GDP Growth Rate: 3.76%
- Budget Projection for 2024: N26 trillion
- Projected Revenue for 2024: N16.9 trillion
- Approved Deficit for 2024: N9 trillion
Exchange Rate Debate:
A significant point of contention during the session was the proposed exchange rate of N700/$1 for 2024. Senators debated the feasibility of this rate, and in response, the Senate resolved to impose a ban on the importation of all items that are locally produced, aiming to stabilize the value of the naira.
Additionally, the Senate moved to amend the act governing the Bureau of Public Enterprise (BPE) and recommended that the Ministry of Finance assume control of all federal government assets, both fiscal and material.
About the MTEF/FSP:
The Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) serve as guiding documents for the federal government’s spending aligned with economic and social objectives. It outlines a three-year rolling plan, detailing spending priorities and corresponding funding mechanisms.
With the Senate’s approval of the MTEF, the path is cleared for President Bola Tinubu to submit the 2024 budget proposal of N26 trillion ($34 billion) to parliament for consideration. The endorsed document, prepared by Tinubu’s cabinet, anticipates the naira trading at around 700 per dollar in 2024, with a slight strengthening projected for 2025 and 2026.
