Will Tinubu’s budget proposal take Nigeria to Eldorado?

By Usman Yanmaza

Just as it’s traditionally being expected in any budget, the front line items will firstly be served in sectors like Education, Defence, Health, Agriculture etc. This budget is not exception to that rule, Defence got a lion share with high priority of N3.25 Trillion which represents 12% of total budget. Education came second with N2.18 Trillion with alternative of 7.9%. Health has N1.33 Trillion with 5% of total budget.
In many cases as it unfolds, most of the budget being prepare by the Nigeria gov’ts in both national and subnational levels aren’t up to standard, achieving nothing if not lavish and unnecessary spendings, some do presents the budget for soft targets in order to quench their personal and primordial interests. Albeit we are usually copying from most of the developed countries and states (i.e UK for the country while Texas or Los Angeles for the states). But we are usually ending mostly at the loosing barriers, concluding with poor budget performance, unforgivable and humungous deficits while the expected revenue from oil and forex are usually crashing in the global markets. None so good budget standard attainment recording in many quotas and stratas of the economy.
Nevertheless, as someone who studied Finance and have the idea on how it is going in the financial sector (including the budget) I am still intellectually adequate to comment on the recent budgets presented by President Bola Tinubu and the other of it kind presented by my state Governor Senator Bala Muhammad, thus, prompted my intention to analytically studied and examine the sequence of allocations in order to forecast if the budgets will achieve something different or not.
The proposed outlay of 2024 national budget presented last month by President Tinubu in the joint session of national assembly have encompassed so many trends for impressive hope and disheartening gibberishes. It’s a new normal tradition that the immediate past administration led by former President Muhammadu Buhari have removed any element of optimism in governance, people have no longer confidence in governance and government, the chaotic and angst budgets he presented in the last 8 years was not only balderdash but bunkious rubbishes, poppycocks and in beautifully nonsensical order. He left no room untouched, he made sure that he annihilated, damaged and destroyed almost every performing sector of the economy in the country. Nevertheless, let us examine the present one chased and tagged under the renewed hope mantra.
The maximum and ultimate figure of the proposed budget for 2024 fiscal year is about N27.5 Trillion with higher allocation on recurrent expenditure over the capital expenditure some are saying it will clearly entrench the bloat of recurrent spendings, new but decrease in borrowing so also good budget for debt servicing.
Even though some commentators are expressing their grievances for seeing recurrent expenditures are at the priority top of capital expenditure in a country with so much infrastructural deficits but to commentators like I am, we see absolutely nothing wrong on this more especially at this era of incurable poverty in the land, in an inflationary economy like ours, unstoppable running the gov’t workers, administrations, transfers, economic and social services will undoubtedly reduced the level of penury and depression our people find themselves nowadays.
President Tinubu kept aside N9.92 Trillion on recurrent expenditure which is representing 43% of the budget for running administrational works and other matters as related to it, out of which N7.78 Trillion will goes on salaries and pensions. It’s absolutely apt and clear since the administration is currently planning to increase workers renumeration by April 2024 and it’s not gainsaying that the minimum wage of N30k in Nigeria is admittedly low and one of the most poor renumeration in developing countries. Ofcourse, the government is somehow broke and has been funding it activities with borrowings. But inflation, fuelled by a crashing naira, and stoppage of petrol subsidies, will promptly wipe out the modest wage increases. Without stabilising the naira and inflation, hardship still lies ahead of Nigerians take my words to the bank.
Critically, capital expenditure is not in any case inadequate, with N8.7 trillion earmarked, infrastructure development will receive N1.32 trillion out of this. Though, In November, the Minister of Works, David Umahi disclosed that this administration inherited a debt of N6 trillion from its predecessor on many uncompleted road projects. Atrociously, instead of voting more funds to fix the roads, the National Assembly said it is buying SUVs for members because of the bad roads. In what universe does that ever happened if not here in Nigeria?.
In 2024, debt servicing allotted N8.25 trillion. It’s not ambitious if the President projected debt servicing at 45% of the expected income revenues in 2024, albeit the FG is currently servicing debt almost with 98% of it revenue. Recently, World Bank warned that unless drastic reforms are implemented, Nigeria’s debt service-to-revenue ratio would hit 160% by 2027. Meanwhile, the government has many alternatives but instead blindly continue to borrow. N8.25 trillion on debt servicing in the N27 trillion 2024 budget experts projecting that the economy will grow by 3.76% as per paying debt obligations more opportunities will be there, it’s a phenomenal job weldone if achieve.
Since the gov’t have already removed subsidy thus saved Billions sanking courtesy of the payment and hereby made it relatively possible to increase the recurrent spendings. But one thing President Tinubu maintained mute upon was he didn’t made any move to reduce the cost of running his gov’t appointees and never put a word on reducing the stupendous amount for overhead, talkless of making move to recover humungous funds siphoned by the officials of immediate past administration (need not to mention names), meaning they have gone scot-free.
Just as it’s traditionally being expected in any budget, the front line items will firstly be served in sectors like Education, Defence, Health, Agriculture etc. This budget is not exception to that rule, Defence got a lion share with high priority of N3.25 Trillion which represents 12% of total budget. Education came second with N2.18 Trillion with alternative of 7.9%. Health has N1.33 Trillion with 5% of total budget. Infrastructures has N1.32 Trillion with also 5%. Social Development and Poverty Reduction dimed with N534 Billion or 2% of total budget.
Assuredly, among the expected performance of the budget is reduction of budget deficit were in 2024 the deficit is N9.18 Trillion where it will be incurred from foreign and domestic borrowings unlike that of 2023 were the deficit stands at N13.74 Trillion. In 2024 the borrowings is N7.83 Trillion out of which N1.05 Trillion will be borrow from multilateral and bilateral commissions while N289.34 Billion will be borrow from private sectors. The debt will be service with 45% of the expected revenues.
Usman Yanmaza writes from Bauch