Nigerian Government Considers $6.6 Trillion Supplementary Budget for Economic Advancement Plan

 

The Federal Government of Nigeria is preparing to request a supplementary budget of ₦6.6 trillion from the National Assembly to support the Accelerated Stabilisation and Advancement Plan (ASAP), aimed at advancing President Tinubu's economic "8 Priorities."

The ASAP plan, crafted by Finance Minister Wale Edun, was presented to President Bola Tinubu. It includes recommendations such as the unbundling and commercialization of the Transmission Company of Nigeria (TCN), and the procurement of 7 million smart meters and 150,000 distribution transformers to enhance the power sector.

Key Interventions and Budget Breakdown

ASAP outlines interventions in four critical sectors—agriculture and food security, energy (power and gas), health and social welfare, and business support—requiring an estimated ₦6.6 trillion. This proposed spending represents 2.1% of the projected 2024 Gross Domestic Product (GDP).

• Energy Sector: Approximately 49% of the budget is allocated to energy, focusing on increasing electricity supply to 6 GW by December 2024 and improving sector liquidity through initiatives like the Presidential Metering Initiative program. The government also plans to liquidate ₦1.5 trillion in unpaid liabilities to gas companies and electricity-generating companies (Gencos).
• Business Support: About 27% of the budget is dedicated to business support to stimulate economic growth.

Funding and Implementation

The supplementary budget of ₦6.6 trillion will require appropriate funding, backed by an approved borrowing plan. At an adjusted spend of 75% of the proposed emergency funding requirements, approximately ₦5.0 trillion would be necessary.

Executive Orders for ASAP Implementation

President Bola Tinubu plans to issue 20 Executive Orders (EOs) to facilitate ASAP's implementation. These include:

• Import Duty & VAT Suspensions: On specified items to boost economic activity.
• Incentives for Businesses: Including tax deductions for incremental staff salaries and additional tax benefits for transportation and other allowances.
• Support for Low-Income Workers: Through wage awards and transport subsidies.
• Tax Exemptions for Export Proceeds: To encourage non-oil exports and remove barriers to foreign exchange applications.
• Cost-Cutting Measures: MDAs to remit operating surplus above ₦5 billion, restrict foreign trips, and ensure electronic payments for expenses.

Sector-Specific Plans

Power Sector:

• The goal is to integrate sustainable, low-cost energy sources to reduce the average cost of power.
• The government will provide concessionary funding for metering and counterpart funding for near-complete projects.
• Emphasis on penalizing non-performing value chain participants.

Oil and Gas:

• Implement community-based and technology-based solutions to end pipeline vandalism.
• Increase oil production to 2 million barrels per day (mbpd) and position Nigeria as a leading oil investment destination in Africa.

Healthcare:

• Fund tuition for healthcare workers, supporting 20,000 students over four years.
• Lower the cost of essential medicines for 80-90 million Nigerians.
• Expand healthcare insurance coverage for 1 million vulnerable people.
• Redistribute 40,000 healthcare workers to provide services to 10-12 million patients, and enhance 4,800 Primary Health Centres (PHCs) and higher-tier hospitals.

These initiatives reflect the Federal Government's commitment to addressing critical sectors to stimulate economic growth and improve the quality of life for Nigerians.