In a move aimed at addressing the aftermath of nationwide floods and enhancing economic development, the Federal Government (FG) of Nigeria has approved a ₦2.2 trillion supplementary budget. This decision, made by the legislative and executive branches, reflects a collaborative effort to streamline the budgeting process and foster respect for institutions, according to officials.
The approval comes after former President Muhammadu Buhari signed the 2023 Budget of ₦21.83 trillion along with the 2022 Supplementary Appropriation Bill into law earlier this year. The supplementary budget, amounting to ₦2.2 trillion, allows the government to allocate additional funds to address the devastating impact of recent floods on infrastructure and the agriculture sector.
Former President Buhari emphasized that the approved aggregate expenditure of ₦21.83 trillion represents a ₦1.32 trillion increase over the initial Executive Proposal of ₦20.51 trillion. By authorizing the supplementary budget, the Nigerian government aims to provide relief and support to sectors severely affected by the flood disaster.
However, concerns have been raised about Nigeria’s growing debt burden. Based on an analysis of the country’s current debt profile and projections in the Medium Term Expenditure Framework and Fiscal Strategy Paper 2024-2026, it is estimated that Nigeria’s total public debt may reach ₦118.37 trillion in the next three years.
The latest MTEF/FSP highlights the Federal Government’s plans to borrow ₦26.42 trillion between 2024 and 2026. Debt servicing alone is foreseen to consume ₦29.92 trillion over the same period. The data reveals that the government intends to borrow ₦7.81 trillion in 2024, slightly less than the ₦8.84 trillion target in the prior MTEF/FSP. This borrowing includes ₦6.04 trillion from domestic lenders and ₦1.77 trillion from foreign creditors.
In 2025, the government plans to borrow ₦8.54 trillion, which is also lower than the previous MTEF/FSP target of ₦10.62 trillion for that year. Despite the mounting debt, FG officials maintain their commitment to the borrowing plan, citing low revenue generation as the driving force behind the need for increased borrowing.
However, President Bola Tinubu recently expressed his administration’s determination to break the cycle of overreliance on borrowing for public spending and the resulting strain on managing limited government revenues. The government acknowledges the need for a sustainable fiscal strategy to ensure long-term economic stability.
As Nigeria moves forward with its ambitious supplementary budget and grapples with the challenge of a growing debt burden, it remains essential for policymakers to strike a balance between supporting economic development and implementing measures to alleviate debt-repayment pressures.
