The International Monetary Fund (IMF) has stated that Nigeria’s budget deficit would increase beyond the projected figure for 2024 due to implicit fuel and electricity subsidy payments and increased interest costs on debt.
This is contained in the Fund’s staff report on Nigeria, where it stated that the suspension of excise duties in the Medium Term Expenditure Framework (MTEF) and lower revenues from oil and gas sales as part of the drivers of the projected increase in budget deficit.
According to the report, the federal government would require a supplementary budget to meet its plans on minimum wage increase later in the year which would most likely exceed the figure projected in the 2024 budget.
Furthermore, the IMF projected capital spending to be lower than planned, based on past results, leading to a projected Federal Government of Nigeria (FGN) deficit of 4.5% of GDP in 2024, compared to the budget target of 3.4% of GDP.
The federal government in the 2024 appropriation projected a budget deficit of N9.18 trillion which represents a 33.5% decline in the fiscal deficit when compared to the N13.78 trillion recorded in 2023. Contrary to previous years, the federal government did not make any appropriation for fuel subsidies in 2024.