IMPI commends FG for setting new fiscal milestone

Tue, Mar 12, 2024
By editor
4 MIN READ

Featured, Politics

 …calls for full implementation

By Anthony Isibor

THE Independent Media and Policy Initiative has commended the Federal Government for signing a 2024 budget with recurrent expenditure of N8.7 trillion and N9.9 trillion allocated to capital expenditure.

This means that for the first time in over 20 years, Nigeria’s budget of N28.777 trillion has a Capital Expenditure that exceeds its Recurrent Expenditure.

According to a policy statement signed on Monday by Niyi Akinsiju, Chairman, IMPI, the achievement is remarkable considering the age-long national aspiration to engineer a budget that is perceived as a true capital expenditure of the fiscal instrument.

The statement noted that Nigeria’s recurrent budget usually dots and panders to the needs and emoluments of the federal government personnel aggregated in the cadre of public servants.

Commending the government, it said that for the first time in the current democratic dispensation, the 2024 budget, which is the first in the tenure of the President Bola Tinubu’s administration, has more funds allocated to capital expenditure than recurrent.

It noted that although what was passed by the National Assembly was N1.28 trillion over the original N27.5 trillion spending plan, there are indeed good signs and prospects for a budget that is to be financed through a non-debt revenue of N19.6 trillion and a deficit of about N9.18 trillion.

“This is something to build on for an administration that has, since assuming office, embraced economic reforms that are not only courageous in the face of historical resistance to their implementation, but are also expected to yield long term transformative benefits to Nigerians.

“In addition to this is the decision to implement the 12 year-old Stephen Oronsaye’s report on public sector reforms, which is expected to reduce cost of governance by at least N2 trillion even as the federal government is set to increase minimum wage. The challenge ahead lies in ensuring a better budget implementation in a country with a record of poor budget performance.”

It explained that its study of national budget documents of the last 24 years, between 1999 and 2023, reveals a disconcertingly progressive climb in government expenses on public servants at the expense of projects in critical sectors of the economy.

“We consider this a purely consumption phenomenon, expenditures which do not result in the creation or acquisition of fixed assets (new or second-hand) for national use. This phenomenon, which dates back to the 1980s became more obvious at the outset of this current democratic dispensation in 1999.

“According to the statistics from the Central Bank of Nigeria, CBN, the recurrent expenditure in the last full year of military rule, 1998, was N178.10 billion. It, however, skyrocketed to N449.6 billion in the first year of the then President Olusegun Obasanjo. This rise in cost of governance could be attributed to the infusion of the National Assembly into governance and since then it has maintained an upward swing.

“Nigeria’s recurrent expenditure, which includes spending on personnel expenses such as wages and pensions as well as overhead costs and service wide votes have regularly consumed over 65% of total budgets and a huge chunk of revenue.

“We consider it even more depressing that despite the incongruent budgetary misbalance, the country has, since 2009, been recording yearly budget deficits that average N3.3trn in recent years on the back of oil price volatility and post-COVID economic debilitations. Budget Office data shows that between 2011 and 2021, the Federal Government of Nigeria spent N29.3 trillion on (non-debt) recurrent expenditure, while it earned N33.2 trillion as revenue during this period. This means that what went into capital projects was extremely negligible.

“From an analyst’s point of view, a budget with higher capital expenditure than recurrent is not only a driver of economic growth, it also impacts individual citizen’s quality and way of life. In this regard, we concur with the 2019 submission of the Nigerian Institute of Social and Economic Research, NISER, that the only way to bring about a meaningful influence on the economy is to monitor and evaluate funds that are specially intended for capital expenditure and capital projects.

“We, however, feel sanguine over the prospect of attaining a 100 percent implementation of the capital expenditure aspect of the 2024 federal government budget premised on freed revenue from the civil service reforms to be channeled into funding capital projects for the good of the larger percentage of Nigerians,” the statement said.

A.

-March 12, 2024 @ 15:27 GMT|

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