The Nigerian government is implementing a series of cost-cutting measures aimed at improving governance efficiency, reducing corruption, and achieving value for money. These initiatives include a potential review of the 2007 Public Procurement Act, adjustments to the 2024 budget deficit, and strategies to enhance fiscal discipline.
Cost-Cutting Measures:
- Review of Public Procurement Act 2007:
- Aim: Improve efficiency, value for money, and reduce corruption in government spending.
- Budget Deficit Adjustment:
- 2024 Budget Deficit: N9.05 trillion (22% lower than 2023)
- Compliance with 3% threshold as per the 2007 Fiscal Responsibility Act (FRA).
- Represents 53% of total revenues and 3.83% of estimated GDP.
- 2024 Budget Allocation:
- Total Spending: N26.01 trillion (14.8% higher than 2023)
- Debt Service and Sinking Fund: N8.25 trillion and N243 billion respectively.
- Expenditure Efficiency and Oversight:
- Viability assessment/cost-benefit analysis for capital expenditures beyond a certain threshold.
- Benchmark price list and spending caps for specific expenditures.
- Tagging critical expenditures to earmarked taxes and revenue lines.
- Deregulation of Petroleum Products and Electricity Tariffs:
- Aims for full deregulation of petroleum products and cost-reflective electricity tariffs in 2024.
Challenges Addressed:
- Poor implementation of Public Procurement Act 2007.
- Fiscal deficits exceeding budgeted levels due to factors like over-optimistic revenue projections.
Fiscal Framework for 2024-2026:
- Oil Benchmark Prices: $73.96/barrel (2024), $73.76/barrel (2025), $69.90/barrel (2026).
- Oil Production Targets: 1.78 million, 1.80 million, and 1.81 million barrels per day (2024-2026).
Economic Projections (2024-2026):
- Inflation: 21.4% (2024), 20.3% (2025), 18.6% (2026).
- GDP Growth: 3.76% (2024), 4.22% (2025), 4.78% (2026).
- Total Federation Account Revenue: N24.54 trillion (2024).
Conclusion: The Nigerian government’s pursuit of cost-cutting measures is a strategic step towards efficient governance, prudent fiscal management, and resource allocation. These initiatives aim to address key challenges in revenue mobilization, debt sustainability, inflation, and security concerns, fostering a more transparent and stable economic environment.