The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has announced that the significant increase in Nigeria’s revenue for the 2024 fiscal year is being strategically directed towards various social intervention programs designed to enhance living standards and address critical societal needs.
Edun stated that the social investment initiative aims to benefit 60% of the nation’s poorest citizens, reaching approximately 20 million individuals. He also presented a comprehensive agenda for economic reform focused on reducing inflation, creating jobs, and stimulating growth in key sectors.
During his address on October 1, 2024, President Bola Tinubu revealed that government revenue for the first half of 2024 (January to June) surpassed N9.1 trillion more than double the N4.06 trillion generated in the same period in 2023. Speaking at the 30th Nigeria Economic Summit in Abuja, Edun emphasized that the increased revenue is being allocated to finance social programs that mitigate the impact of necessary but challenging reforms affecting the cost of living.
“In terms of revenue, we looked inwards, focusing on domestic resource mobilization,” Edun explained. “By the first half of this year, our revenue had more than doubled.” He attributed this growth to the effective use of technology to reform civil service processes and ensure compliance from government ministries, departments, and agencies.
The social investment program includes direct cash transfers targeting the poorest households, with support already reaching 4 million households and a goal to expand to 15 million households in the near future. “This is how President Tinubu’s government is utilizing the funds generated from improved oil production,” Edun noted.
Edun also underscored the government’s commitment to agriculture, manufacturing, oil, and housing as critical drivers of Nigeria’s economy. “We are focusing on food production to help combat inflation,” he added.
In the oil sector, Edun highlighted recent reforms that have attracted significant investments, including an additional $10 million from ExxonMobil and other industry players. “The oil sector is our primary avenue for generating foreign exchange and global revenue,” he stated, expressing optimism about continued investments from both local and foreign sources.
These measures have already prompted Nigerian manufacturers to commit up to $4.2 billion in investments, bolstering the country’s economic outlook. Additionally, the government is introducing initiatives such as a student loan scheme and consumer credit options to facilitate household purchases and promote the transition to cleaner energy sources like Compressed Natural Gas.
In agriculture, the government is offering grants and loans totaling up to N75 billion to support one million small and micro enterprises. For larger companies, an additional N75 billion is being distributed in tranches of N1 billion at a 9% annual interest rate, aimed at helping them navigate the challenges posed by recent foreign exchange adjustments that impact their profit margins.
“This is how President Tinubu and his government are investing the increased revenue driven by enhanced oil production and macroeconomic reforms, which are expected to save the country 5% of GDP,” Edun explained. “A wide array of social investment initiatives are being funded through these efforts.”
At the summit, World Bank Country Director for Nigeria, Ndiamé Diop, acknowledged the country’s substantial revenue increase and projected improvements in the revenue-to-GDP ratio. He pointed out that while Nigeria spent 12.9% of its GDP in 2022, it only generated 7.6%, leading to a significant fiscal deficit predominantly financed through debt. “This trajectory could have led to a crisis,” Diop cautioned.
He underscored the necessity of ongoing reforms to stabilize Nigeria’s fiscal position and promote sustainable economic growth. “We aim to make food more available, affordable, and to reduce the cost of living for Nigerians,” he concluded.
