On Tuesday, both chambers of the National Assembly successfully passed the N6.2 trillion 2024 Appropriation Act (Amendment Bill).
On Wednesday, July 17th, President Bola Tinubu transmitted the money bill to the federal legislature, marking a pivotal moment in Nigeria’s fiscal planning for the year ahead. This action set the stage for intensive deliberations within the National Assembly, culminating in the passage of the N6.2 trillion 2024 Appropriation Act (Amendment Bill) on Tuesday.
Simultaneously, the National Assembly also approved the Finance Act, strategically targeting funds accumulated by Nigerian banks since the onset of the current foreign exchange regime. These legislative efforts underscore the government’s proactive stance in managing financial flows and ensuring economic stability amidst evolving global economic dynamics.
The primary objective of the appropriation act amendment bill was to allocate a total of N6,222,595,926,139, delineating N3,222,595,926,139 for Capital Expenditure and N3,000,000,000,000 for Recurrent Expenditure. This allocation reflects a balanced approach aimed at enhancing infrastructure development and sustaining essential government operations.
Within the N3.2 trillion allocated for Capital Expenditure, substantial funding was designated to support ongoing legacy projects crucial for national development across various sectors of the economy. Concurrently, the allocation of N3 trillion for Recurrent Expenditure was earmarked to cover essential costs, including the implementation of the new minimum wage set at N70,000, reflecting the government’s commitment to enhancing workers’ welfare.
The legislative process surrounding the appropriation act amendment bill was characterized by proactive measures within the National Assembly. Last week, both chambers demonstrated flexibility by suspending their rules to expedite the bill’s readings and subsequently referred it to the Committee on Appropriations for comprehensive review and recommendations.
During deliberations in the Committee of Supply on Tuesday, Senator Solomon Adeola, Chairman of the Senate Committee on Appropriation, provided insightful leadership, contextualizing the bill within the broader framework of Nigeria’s fiscal policy. He reminded his colleagues of the N28,777,404,073,861 2024 Appropriation Bill passed by the National Assembly in the previous year, which was signed into law by the president on January 1, 2024. This historical context served to underscore the continuity and strategic planning essential for achieving sustainable economic growth and development.
Overall, the passage of the N6.2 trillion 2024 Appropriation Act (Amendment Bill) represents a critical milestone in Nigeria’s fiscal governance, signaling a concerted effort to prioritize infrastructure investment, enhance public service delivery, and promote economic resilience amidst global challenges. The legislative actions taken by the National Assembly underscore their commitment to prudent fiscal management and inclusive economic growth, setting a foundation for sustainable development and prosperity for all Nigerians.
Adeola explained that the 2024 Appropriation Act (Amendment) Bill aims to allocate additional funds for Renewed Hope Infrastructure Development Projects nationwide and to cover other recurring expenses, including the necessary adjustments for the new minimum wage to effectively govern the federation.
He noted that the Senate Committee on Appropriations, tasked with reporting back on the bill within a week, extensively consulted with committee leadership and key stakeholders. Particularly significant was their discussion with the Hon. Minister of Budget and Economic Planning, Senator Atiku Bagudu, concerning the bill’s scope and funding sources for the projects.
Following these consultations, the committee processed the bill jointly with the House of Representatives, adhering to legislative rules and procedures.
Regarding financing, Adeola highlighted that the amendment bill proposes financing the additional expenditures through a one-time windfall tax on banks’ foreign exchange profits for the year 2023, as approved by the National Assembly.
The committee recommended authorizing and disbursing N35,055,536,770,218 from the Consolidated Revenue Fund of the Federation. This includes N1,742,786,788,150 for Statutory Transfers, N8,270,960,606,831 for Debt Service, N11,268,513,380,853 for Recurrent (Non-Debt) Expenditure, and N13,773,275,994,384 for Capital Expenditure contributions to the Development Fund for the year ending December 31, 2024.
The Senate dissolved the Committee of Supply without objection to discuss the clause-by-clause consideration of the bill.
In sectoral allocations for recurrent expenditures, contingency recurrent funding was highest at N2.536 trillion, followed by N1.308 trillion proposed for the Ministry of Defence. Other allocations included N869.120 billion for the Ministry of Police Affairs, N857 billion for the Ministry of Education, N667.577 billion for the Ministry of Health and Social Welfare, and N200 billion for the National Social Investment Programme Agency.
For capital expenditures, the Ministry of Works had the highest projected sum of N1.404 trillion, followed by N1.334 trillion for the Ministry of Agriculture and Food Security. Other allocations included N486.456 billion for the Ministry of Health and Social Welfare, N431.829 billion for the Ministry of Education, N353.949 billion for the Ministry of Finance, N264.265 billion for the Ministry of Power, N685.632 billion for Aids and Grants funded projects, N200 billion for Contingency (capital), and N100 billion for Zonal Intervention Projects.
Additionally, the National Assembly passed the Finance Act aimed at the windfall profits accrued by Nigerian banks since the inception of the new forex regime, with a revised sharing formula of 70-30 percent in favor of the federation.
This enactment followed the adoption of the report of the National Assembly Joint Committee on Finance, chaired by Senator Sani Musa and Hon. James Faleke, which noted that banks benefitted from the exchange rate unification policy but were restricted from using the windfall for dividend payments.
The committee recommended that the provisions of Section 30 of the Principal Act take effect from January 1, 2023, imposing a levy of 70 percent on realized profits from all exchange transactions by banks. It further stipulated penalties for non-compliance, including fines and interest.
