Nigeria’s president seeks extra $4bn to plug budget shortfalls

AFRICAN BUSINESS AND ECONOMYJuly 17, 2024 at 5:32 PM UTC

TLDR

President Bola Tinubu requests 6.2 trillion naira funding to address national budget shortfalls.
Proposed windfall tax on banks' foreign exchange gains for infrastructure, education, healthcare, and welfare funding.
Senate debates bill for approval amid pressure for a new minimum wage amidst cost of living crisis.

Nigeria’s President Bola Tinubu has requested an additional 6.2 trillion naira ($4 billion) in funding from the Senate to address shortfalls in this year’s national budget, according to a letter read to lawmakers on Wednesday.

Tinubu also proposed a one-off windfall tax on banks’ foreign exchange gains to raise revenues for funding capital infrastructure development, education, healthcare, and welfare initiatives.

The Senate immediately began debating a bill to approve the new funding request. This comes at a time when the government faces pressure from unions to agree on a new minimum wage amid the country’s worst cost of living crisis in a generation.

Key Takeaways

Tinubu's request for additional funding aligns with provisions in the "Accelerated Stabilisation and Advancement Plan" (ASAP), drafted by the finance ministry alongside private sector executives and economists, aimed at addressing challenges related to reforms intended to boost growth. In May, the president eliminated a popular yet costly petrol subsidy and devalued the naira twice as part of significant reforms welcomed by investors to stimulate growth. However, these moves resulted in petrol prices tripling, increased transport costs, and pushed inflation to a 28-year high, causing public discontent. Despite facing pressure from labor unions over the rising cost of living due to these reforms, Tinubu has vowed not to roll them back.

Bola Ahmed Tinubu

Nigeria

Economy

Foreign Exchange

Budget Support