Nigeria’s 2024 budget performance hits record low

The Federal Government has disbursed only 24.5 percent of the total amount allocated for the 2024 fiscal year in the first half of the year, marking its lowest budget performance since 2020, according to an FIJ comparison.

As of June 2024, the Federal Government had paid only 24.5 percent of budgetary allocations to ministries, departments, and agencies (MDAs), according to the Quarterly Budget Implementation Report on the Open Treasury Portal.

Key ministries, including Power, Works and Housing, Transportation, and Water Resources, have received less than four percent of their 2024 allocations. Additionally, agencies like the National Youth Service Corps and the National Emergency Management Agency have not received any payments for the 2024 fiscal year.

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In contrast, the National Assembly and the Independent National Electoral Commission have received 50 percent of their budgetary allocations for 2024, standing out as high performers.

This year’s budget performance is the lowest since 2020 when Nigeria implemented about 41 percent of its total budgetary allocation by mid-year.

This figure declined to approximately 32 percent halfway through 2021 and further dropped to a record low of 26.27 percent in 2022. The country saw a slight improvement in 2023 with a 27 percent half-year budget implementation rate.

The declining budget performance is attributed to lower-than-expected oil revenue and misallocations. In June, the Federal Government revealed that oil revenue was about 27 percent below the projections in the 2024 budget, despite favorable crude oil prices.

The highest daily oil production achieved since January is 1.64 million barrels per day, compared to the 1.78 million barrels per day needed to meet revenue projections, as reported by the National Upstream Product Regulatory Commission.

FIJ reported approximately N628 billion misallocated in the 2024 budget, amid other fiscal inconsistencies and irresponsibility by the National Assembly and the Federal Government. Compounding the issue, Nigeria recently recorded a headline inflation rate of 34.19 percent, according to the National Bureau of Statistics, which negatively impacts the Federal Government’s purchasing capabilities.

Despite these challenges, Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, announced in June that the Federal Government surpassed its 2024 half-year non-oil revenue target by 30 percent.

In response to the declining budget performance, the Senate tasked Edun in July with engaging MDAs to improve budget financing and implementation for the current fiscal year.