The Federal Government may need to raise a supplementary budget to accommodate the proposed minimum wage increase for workers.

This is because the negotiated amount may surpass the budgeted amount in the original 2024 budget.

The International Monetary Fund gave this recommendation in its latest staff country report for Nigeria.

“The authorities noted that a supplementary budget may be needed to accommodate the outcome of the ongoing wage structure negotiations which may exceed what they had included in the 2024 budget,” the report stated.

It also noted that the government might need to raise the domestic and external borrowing ceilings to prevent fresh borrowings from the apex bank’s Ways and Means.

The new minimum wage has been an ongoing matter between Organised Labour and the government since the beginning of this year to cushion the impacts of the harsh economy.

Recent reforms in Nigeria including the removal of fuel subsidy and the unification of the foreign exchange market have pushed the cost of living to newer levels.


While labour leaders demand N615,000 from N30,000 as salaries for lowest ranked workers, there are indications the tripartite committee may recommend N70,000 as the new minimum wage.

In the 2024 budget, the government allocated N6.48tn for personnel costs but the international lender posits that the amount may be insufficient.

The IMF further noted that the country’s budget deficit for 2024 is expected to surpass projections, owing to implicit subsidies for fuel and electricity, alongside rising interest expenses on debt.


The Minister of Finance, Wale Edun, had stated the government planned to reduce the budget deficit from 6.1 per cent in the 2023 budget to 3.8 per cent in the current appropriation.

The report read in part, “Staff projects a higher fiscal deficit than anticipated in the 2024 budget, but broadly unchanged from 2023. The drivers are lower oil/gas revenue projections, reflecting IMF oil price forecasts but incorporating recent production gains; higher implicit fuel and electricity subsidies; continued suspension of excise measures included in the MTEF; and higher interest costs.

Staff factors in an under-execution of capital expenditure in line with past outcomes and estimates an FGN deficit of 4.5 per cent of GDP relative to the 2024 budget target of 3.4 per cent of GDP. For the consolidated government, this implies a projected deficit of 4.7 per cent of GDP in 2024—compared to 4.8 per cent of GDP in 2023 measured from the financing side—which is appropriate given the large social needs and factoring in a realistic pace of revenue mobilisation.

“Over the medium-term, staff projects consolidation in the non-oil primary deficit. With rising interest costs, government debt stabilises towards the end of the projection period.”


Meanwhile, the report also urged the government to consider meeting its financing needs from the market and external borrowing.

It said, “Based on staff’s projections, the authorities must raise the domestic and external borrowing ceilings to prevent renewed recourse to CBN financing. With higher interest rates, banks and nonbanks should have sufficient appetite—as indicated by market sources—conditional on careful management of system liquidity, including a likely reduction in the currently high cash reserve requirement.

“Staff projects that the government’s 2024 net financing needs can be met from the market and external borrowing. Domestic market financing needs to increase by 1.5 per cent of GDP over 2023. In addition, the government wants to retire outstanding ways and means borrowing from the CBN of 2.5 per cent of GDP through the issuance of further domestic securities.

It added, “While staff agrees that ways and means financing should be brought to zero by end-2024 in line with the law, the authorities may need to consider other options to avoid crowding out private sector credit, including drawing down the government’s deposits at the CBN built up in 2023 or a second securitisation operation to tackle this legacy problem.

“While external financing is costlier than when Nigeria last accessed Eurobond markets, staff supports an opportunistic issuance, also given upcoming maturities in 2025. A Eurobond issuance and some official financing are factored into staff’s projections as an integral part of the 2024 financing mix.”

Source: https://punchng.com/FG-may-need-supplementary-budget-to-pay-minimum-wage-IMF

IMF holding Nigeria and other Africa countries for blokus

trial and error administration lacking in productive ideas

Suffice to say that Tilumbu is an effigy controlled by the West because of the info about his criminality and real identity they have against him. Everybody knows his real name is not Bola Tinubu because a Yoruba name cannot be Bola as stand alone. His drug case in the US is with the FBI.

Tinubu will continue to act as puppet for the West in order for them not to expose who he truly is.

I hear more from IMF than I hear from my government

Did tinubu make any agreement with IMF because I don't understand this one they are poke nosing into Nigeria affairs.

It seems IMF is now Nigeria Department of Finance. This is a case of husband divorcing the wife but the wife refuses to let go

TUC is demanding for 615k
Government is proposing 70k
Supplementary budget is required to be the 70k
Okay oh.

The way things are going, very soon ₦50 & ₦100 will become worthless like ₦20, ₦10, ₦5, ₦1...

What a Tinubulation!

Imf/world bank! The real president of Nigeria have decided again and as usual tinubu must obey.

IMF dictating the amount of the new minimum wage and how the government should be run is getting out of hand. Yeye dey smell.

IMF controls Nigeria's economy, this is why I respect Obasanjo, he did things his own way regarding the economy, he didn't spend time discussing with IMF but went to countries leaders direct to discuss debt relief and other financial issues

Supplementary budget that will be funded by borrowings accruing more debts.
old senile incapable men continue fighting for positions they cannot handle.

Lol

What's the IMF interest in Nigeria that they think they can dictate what to do to us.

They should please mind their business, we are not interested in borrowing unnecessarily

magoo10:
Supplementary budget that will be funded by borrowings accruing more debts.
old senile incapable men continue fighting for positions they cannot handle.

Borrowing from who? The same wolf criers IMF.

We no dey borrow unnecessary again, they should mind their business

UnstableFC:


Jesus Christ

So if you become useful in life is a crime?

Mynd44
Oam4j
Mukina
Nlfpmod
Fergie001

Kindly assist with the notorious NL troller.

Thanks

DMerciful:
Suffice to say that Tilumbu is an effigy controlled by the West because of the info about his criminality and real identity they have against him. Everybody knows his real name is not Bola Tinubu because a Yoruba name cannot be Bola as stand alone. His drug case in the US is with the FBI.

Tinubu will continue to act as puppet for the West in order for them not to expose who he truly is.

And the drug addict is willing to do everything for them to protect his irreparable damage exposure.

helinues:


Borrowing from who? The same wolf criers IMF.

We no dey borrow unnecessary again, they should mind their business

he who pays the piper dictates the tone.
Continue defending people who have mortgaged the future of this country even up till tomorrow they will still be borrowing.

Its saddening that our ruler's have lost the track

All they know is to grab power at all cost but to utilize it for betterment of the nation becomes problem

Are you saying we need to borrow more billions of dollars after the recently approved ones.
Nigerians should be ready to face more taxes because Govt needs to pay back borrowed money.

My APC urchins, i hope this is good news too.

Wetin concern IMF??

IMF...I'm tired of your opinion about this country

Omo na IMF dey follow Tinubu run this government?

IMF should shut up..
An organisation without a single brain

The IMF, our Executive President and Commander-in-Chief-of-Armed-Forces of Nigeria has spoken.

Things are worst in Nigeria more than you even think.

And it looks like IMF is the new adviser.

Lobatan

Seems the IMF is now Nigerians defacto Coordinating minister of economy and the minister of Finance. Sleeping Tinubu

Lol.

This is what happens when you have a government that is confused & keeps making blunder after blunder.