Stretching the budget
President Tinubu has requested the National Assembly to amend the 2024 Appropriation Act, increasing funding by ₦6.2 trillion (₦3.2…
President Tinubu has requested the National Assembly to amend the 2024 Appropriation Act, increasing funding by ₦6.2 trillion (₦3.2 trillion for capital expenditure and ₦3 trillion for recurrent expenditure). Additionally, he seeks to amend the Finance Act 2023 to impose a windfall tax on banks and provide for tax administration and related matters. Separately, the Federal Competition and Consumer Protection Commission (FCCPC) has fined Meta Platforms Inc. ₦330 billion ($220 million) for allegedly abusing Nigerian users’ data between May 2021 and December 2023, citing violations including discrimination, denial of access to their right to self-determination, unauthorised data distribution, and cross-border data transfer.
The Tinubu administration has made a name for itself in fiscal matters — running four budgets concurrently. The National Assembly initially extended the implementation period for the 2023 annual and supplementary budget (which was supposed to run from January to December 2023) from 30 June 2024 to 31 December 2024. This is in addition to the 2024 annual and supplementary budgets. So much for fiscal transparency and accountability. The new supplementary budget increases the appropriation for the 2024 fiscal year from the initial ₦28.7 trillion to ₦35.05 trillion, compared to a revenue target of ₦18.3 trillion. This brings the budget deficit for the 2024 fiscal year to ₦16.75 trillion, to be financed by loans. According to the Minister for Budget and National Planning, ₦3 trillion will be used to pay the new minimum wage, while ₦3.2 trillion will be used to finance Renewed Hope projects. Following the agreement to raise the national minimum wage, the projected expenditure for recurrent expenditure has increased significantly. Unfortunately, the FIRS revealed that it achieved only 82% of projected revenues in Q1 2024. As of March 2024, Nigeria’s public debt stood at ₦121.67 trillion, so we can expect it to grow immensely at the end of 2024. Sadly, Nigeria’s culture of waste does not give hope that the funds, when secured, will be put to good use. Speaking of securing funds, the fine imposed on Meta is a potential government funding source. 40% of the $110 million fine recently paid by British American Tobacco was remitted to the federal government, while the FCCPC held on to 60%. In detail, the Meta case can be likened to corporate discrimination, where investigators found that Meta had a different data protection policy for EU consumers compared to their Nigerian counterparts. Given that Nigeria’s data protection laws are stringent, it places a huge compliance burden on companies that deal with citizens’ data. Although Nigeria may not account for a significant share of Meta’s revenue, the company still has an obligation to be fair to consumers. The interesting question, though, is whether Nigeria’s government has any leverage to secure the fine, a situation it had with BAT.