The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has announced that the Federal Government’s revenue for the first half of 2024 has exceeded its budgetary targets.
Edun, announced this at a press briefing in Abuja on Thursday.
The minister at the meeting, clarified that the Supreme Court’s proceedings granting financial autonomy to Local Governments have not yet been communicated to the Attorney-General of the Federation for proper study and implementation.
A seven-man panel of the Supreme Court made the landmark decision on July 11, 2024, which was, however, opposed by some state governors.
The minister explained that the process was still in its early stages and further steps would be taken once the full details were available. A Federal Government committee was set up to examine the practicability of the judgment.
“The actual proceeding has not been handed down to the AGF,” the finance minister stated.
This indicates that the direct disbursement of funds to Local Governments, initially expected to commence at the Federation Account Allocation Committee’s monthly meeting last week, will be delayed until the committee fully reviews the Supreme Court’s proceedings.
Edun stated, “The President is a democrat, he believes in federalism, he believes in fiscal federalism. What has come to pass now is a new regime, a new fiscal regime, where through the state joint Local Government account, funding will go directly to the Local Governments.”
Edun explained that a committee, comprising representatives from the federal states, local governments, and the Attorney-General, is working on the implementation. However, he noted that there were practical impediments, such as the need for elected Local Government officials to receive the funds.
Highlighting other key achievements and strategic initiatives of the Federal Government, Edun emphasised the government’s success in fiscal management and revenue generation amid challenging global economic conditions.
He said, “I am pleased to report that our efforts have yielded tangible results. Aggregate Federal Government revenue for the first half of this year has more than doubled compared to the corresponding period in 2023.”
He attributed this achievement to the implementation of robust fiscal policies and reforms aimed at enhancing revenue collection efficiency across various sectors.
The minister underscored the diversification of revenue sources away from oil-dependent income, noting that non-oil revenues in the same period were 30 per cent higher than the budgeted expectations.
“This underscores our commitment to reducing reliance on volatile oil revenues and expanding our tax base,” he added.
Edun also highlighted the success in attracting Foreign Direct Investment and portfolio investments, which have bolstered the country’s financial markets.
“Foreign portfolio investment has seen a substantial increase, reflecting growing investor confidence in our economic reforms,” he explained.
Regarding fiscal discipline, the minister pointed out that expenditure management had been tightened to align with revenue growth, contributing to a decline in the budget deficit compared to previous years.
“We are on track to meet our fiscal deficit target of 4.1 per cent of GDP for 2024, demonstrating prudent financial management amidst global economic uncertainties,” Edun affirmed.
He discussed the government’s initiatives to support economic sectors such as agriculture, manufacturing, and infrastructure development.
Edun highlighted ongoing projects aimed at enhancing food security, boosting industrial production, and improving investment climate through public-private partnerships.
He also reiterated the government’s commitment to sustaining economic growth, job creation, and poverty reduction through strategic economic policies.
“Our focus remains on ensuring inclusive growth and delivering tangible benefits to all Nigerians,” he added.
Regarding inflation, he acknowledged a slight uptick in June but emphasised that the rate of increase is slowing.
He noted that the government’s commitment to implementing the Supreme Court’s ruling marks a significant shift towards fiscal federalism and direct funding of local governments.
Edun also announced plans to issue $500m in domestic foreign currency-denominated bonds in three to four weeks.
He said, “We have an open exchange rate system, it’s not illegal and so we have the issuance of a dollar-denominated security, not depending on the financial architecture of the Western world, not depending on the kind of architecture that you use to raise Eurobonds.
“We’re using the Nigerian financial system, the Securities and Exchange Commission, the banking system, the investment bankers to issue $500m in the first instance that will be available and will attract foreign currency held by Nigerians abroad and anybody else who buys into the macroeconomic reform efforts of President Bola Tinubu.
“That issue is a challenge to the best and the brightest in the financial markets. It is due to open in the next three to four weeks maximum.”