April 14, 2024

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FEC Approves $1.5bn Loan from World Bank, Prepares 2024 Budget

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  • Loan comes at zero interest – Edun
  • AfDB approves $80 million for Ekiti Knowledge Zone Project

CEM REPORT, FINANCE | The Federal Executive Council (FEC) has approved the loan application of $1.5 billion loan from the World Bank and the Medium Term Expenditure Framework as well as the 2024-2026 Fiscal Strategy Paper (MTEF/FSP).

The FEC also made projections toward the 2024 proposed budget, setting the aggregate expenditure at ₦26.01 trillion which included statutory transfers of ₦1.3 trillion and non-debt recurrent expenditure of ₦10.26 trillion. On the assumptions of $73.96 per barrel of crude oil and an exchange rate of N700 to $1.

According to the Minister of Budget and National Planning, Atiku Bagudu, while briefing pressmen after the council’s meeting, the President would soon present a supplementary budget to the national assembly meant to provide for the financial implications of the wage awards and other commitments made to workers as a result of the removal of fuel subsidy.


“The aggregate expenditure is estimated at ₦26.01 trillion for the 2024 budget, which includes statutory transfers of ₦1.3 trillion and non-debt recurrent expenditure of ₦10.26 trillion.

“Debt service estimated at ₦8.25 trillion as well as ₦7.78 trillion being provided for personnel pension cost.”

Bagudu explained that the volume of the debt service budget increased, “because ₦22.7 trillion Ways and Means was securitised, meaning it became a federal government debt at nine per cent,” he noted that it amounted to ₦2.1 trillion as debt service, adding that the personnel cost rose significantly due to transfers from the agreement between the federal government and the organised labour.

“So, Council deliberated on this as well as the implication of this and all measures promised in the ‘Renewed Hope Agenda’ on consumer credits, mortgages, mortgage, reversed or dismissed institution as well as funding the newly aligned institutional changes particularly ministries with specific functions that can generate growth so that would be better for our country.

“The council members acknowledged the medium-term expenditure framework, and it is agreed that we can go ahead to the next step of consultation and presentation to the national assembly,” he added.

He continued that the administration will maintain the January-December budget cycle, stressing that the President was careful about the financial implications and commitment to labour as well as budgeting processes and integrity to ensure that monies appropriated were spent in the period for which they were appropriated.

The FEC also approved the application for $1.5 billion loan from the World Bank, according to Minister of Finance and Coordinating Minister of the Economy, Wale Edun, the loan which has be approved by the International Development Association comes at zero interest.



Edun, also stated Nigeria has been able to make macroeconomic decisions that have restored balance in the economy and attracted the attention of the global financial institutions.

“The total is $1.5 billion and the background is just as you heard from the minister of planning and budget. The world today operates a high interest rate policy, as the developed world looks to fight inflation.

“We have been able to take the tough decisions to restore balance in the economy in the government’s finances that have warranted support, that has engendered and has elicited even support from the multilateral development banks and is based on that, that the World Bank is willing to consider and to process on our behalf $1.5 billion of concessional financing, relatively cheap financing and financing that will be dispersed relatively quickly.”

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Additionally, Edun said that the African Development Bank has also approved $80 million in financing for the Ekiti Knowledge Zone Project which has also now been approved by the council.

“This financing is for a project in Ekiti called the Ekiti Knowledge Zone Project, which is basically to support young people and their quest to take on technology to use it to be employed to be trained and to benefit from being part of the knowledge economy, being part of the technological wave that is present very much in Nigeria, which is becoming a bigger and bigger share of the economy.

“So it’s $80 million to help the young people in the sector of knowledge economy technology and communications generally.

It is worth noting that this is the first FEC meeting in six weeks as against regular meetings by the previous administration. To put the coal to rest Minister of Information, Mohammed Idris, announced that FEC meetings would now be held on Mondays as against the Wednesdays under the previous administrations. He noted that the meetings may not be held weekly but whenever there are pressing issues to discuss.

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