The Senate President Godswill Akpabio said the proposal allocates N3.2 trillion for infrastructure projects and N3 trillion for recurrent expenditure.
To fund this increase, the government has suggested a new tax on banks’ foreign exchange gains, urging the National Assembly to amend the Finance Act of 2023 to include a one-time windfall tax on these gains.
Analysts at Commercio Partners said these gains, accrued by banks due to forex rate fluctuations, would help support capital infrastructure development, education, healthcare, and public welfare initiatives under the Renewed Hope Agenda.
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Top Nigerian banks made significant profits from forex revaluation gains in 2023, amounting to N3.3 trillion. This includes N2.48 trillion by the top seven banks and N882.9 billion in the first quarter of 2024. In January 2024, the National Assembly had already increased the budget from Tinubu’s initial N27.5 trillion proposal to N28.7 trillion.
Head of Research at Commercio Partners, Ifeanyi Uba, said the adjustments included allocations for statutory transfers, debt servicing, recurrent expenditure, and capital expenditure. The new proposal aims to further adjust the budget to accommodate additional funding requests.
Lawmakers had passed a N28.77Â budget for 2024 in December, the first full-year spending plan under the present administration.
Government’s request is in line with provisions in an “Accelerated Stabilisation and Advancement Plan” (ASAP), drafted by the finance ministry with private sector executives and some economists, that aims to address challenges related to reforms aimed at boosting growth.
Last May, government axed a popular but costly subsidy on petrol and twice devalued the naira in landmark reforms cheered by investors to try to kick-start growth.
But the move caused petrol prices to triple, increased transport costs and pushed inflation to a 28-year high.
To reduce the impact of inflation spike on the people, government approved a N70,000 minimum wage for Nigerian workers, promising to review the national minimum wage law every three years.
This decision followed a meeting with leaders of the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) at the presidential villa in Abuja.
Initially, the federal government proposed a N62,000 minimum wage, while labor unions demanded N250,000, leading to a negotiation deadlock.
Eventually, both parties agreed on N70,000. Alongside this, Tinubu also promised support for the private sector and sub-national governments to implement the new wage and committed to addressing the four-month salary backlog for university unions.
This approval and agreement with organised labor aim to address workers’ financial struggles amidst high living costs.
