Tinubu proposes N6.2trn budget increase, eyes new banks’ forex tax
President Bola Tinubu has submitted a proposal to the Senate to increase the 2024 appropriation act by N6.2 trillion, aiming to bolster national expenditure from N28.7 trillion to N34.9 trillion.
Senate President Godswill Akpabio disclosed Tinubu’s request during Wednesday’s session in the upper legislative chamber.
In his letter, Tinubu outlines a plan to allocate N3.2 trillion for infrastructure projects and an additional N3 trillion for recurrent expenditures.
“In accordance with section 58 (2) of the constitution of the Federal Republic of Nigeria as amended, I hereby submit the above-mentioned bills for consideration and passage by the Senate,” Tinubu stated in his letter.
The amendment bill to the appropriation act aims to allocate N3.2 trillion for Renewed Hope Infrastructure Projects and other critical national infrastructure, alongside N3 trillion for recurrent expenses essential for federal government operations.
To finance these expansions, Tinubu proposed amendments to the Finance Act of 2023, targeting windfall profits accumulated by banks from foreign exchange gains.
This initiative seeks to introduce a one-time windfall tax on forex gains realized by banks in their 2023 financial statements. The revenue generated will be directed towards capital infrastructure, education, healthcare, and public welfare programs integral to the Renewed Hope Agenda.
Top Nigerian banks recorded substantial profits of N3.3 trillion in 2023, primarily driven by forex revaluation gains, in the first quarter of 2024 alone, these banks reported earnings of N882.9 billion.
In January 2024, the National Assembly passed the initial 2024 appropriation bill, slightly increasing it from President Tinubu’s proposed N27.5 trillion to N28.7 trillion, an increment of N1.2 trillion.
The approved budget allocates N1.74 trillion for statutory transfers, N8.27 trillion for debt servicing, N8.76 trillion for recurrent expenditures, and N9.99 trillion for capital projects.
The Senate’s Committee on Appropriation adjusted the bill to accommodate additional funding requests from the Executive, including revisions to foreign exchange differentials, enhancements to Government-Owned Enterprises’ (GOEs’) revenues, reductions in GOE personnel expenses, adjustments to Service Wide votes (wage adjustments), and reductions in Service Wide expenditures.
Tinubu’s proposal and the subsequent deliberations underscore ongoing efforts to secure robust funding for critical national initiatives amid evolving economic conditions and fiscal priorities.
