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Nigeria’s 2024 budget: A milestone as capital expenditure exceeds recurrent for the first time since 1999

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Nigeria’s 2024 budget: A milestone as capital expenditure exceeds recurrent for the first time since 1999

Nigeria’s 2024 budget: A milestone as capital expenditure exceeds recurrent for the first time since 1999

 

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The Independent Media and Policy Initiative IMPI has hailed the federal government for allocating more funds to capital expenditure than recurrent in the budget for the first time in the current democratic dispensation.

 

Nigeria’s 2024 budget: A milestone as capital expenditure exceeds recurrent for the first time since 1999

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It said in statement signed by its Chairman Niyi Akinsiju that the decision to buck a 24- year trend with the 2024 budget is a reflection of the government’s sincerity to drive real economic growth.

 

According to the policy think tank, there is a lot of positives to derive from a N28.7trillion spending plan that seeks to correct years of budget imbalance between capital and recurrent expenditures.

 

IMPI said: “From an analytical 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.

 

 

“It would, however, appear that the disequilibrium between capital and recurrent expenditures has been eventually corrected. For the first time in the current democratic dispensation, the 2024 budget, which is the first in the tenure of the President Bola Tinubu administration, has more funds allocated to capital expenditure than recurrent.

 

“The budget of N28.777 trillion for the 2024 fiscal year has a recurrent expenditure of N8.7 trillion with N9.9 trillion allocated to capital expenditure.

 

“Granted that what was passed by the National Assembly was N1.28trillion more than 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”

 

The policy think tank also lamented how previous administrations had failed to capitalize on two oil booms to boost infrastructural development in the country through higher capital votes.

 

“Between 2006 and 2013, the national economy grew at an average of between 6 and 8 percent according to World Bank figures yet the increased revenue was channeled into feeding public servants. The recurrent expenditures in those years were always bigger than allocation for capital expenditure.

 

“Nigeria’s recurrent expenditures which include 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 imbalance, the country has, since 2009, been recording yearly budget deficits that average N3.3trn in recent years aggravated by oil price volatility and post-COVID economic debilitations in recent years.

 

“Budget Office data show 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 revenue during this period. This means that what went into capital projects was extremely negligible,” It added.

 

IMPI is however hopeful that cost cutting measures approved by President Tinubu will ensure that more funds are freed for capital component of the budget

 

It said: “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.

 

“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.”

 

 

 

 

 

POLICY STATEMENT 09 ISSUED BY INDEPENDENT MEDIA AND POLICY INITIATIVE (IMPI)

 

FG Sets Fiscal Milestone First Time In Over 20 Years As Capital Expenditure Exceeds Recurrent

 

 

We have observed that for the first time in over two decades, capital expenditure funds are higher than allocations to recurrent. By the nation’s annual budget precedence, this is remarkable considering the age-long national aspiration to engineer a budget that is perceived as a true capital expenditure fiscal instrument.

 

A recurrent budget, as had been the character of the annual national budget, fiscally dots and panders to the needs and emoluments of federal government personnel aggregated in the cadre of public servants. The very few that, by providence, most of the time, find themselves in this privileged cadre always take the major chunk of government spending while capital expenditure, that aspect of federal government spending that provides for the general needs of the larger public through infrastructure and related facilities, is irreverently placed in the back burner of fiscal consideration.

 

This captures the capital-recurrent fiscal imbalances in the national budget in virtually all of Nigeria’s budgets since the 1990s without any form of change to its underpinnings after the return to democratic rule in 1999.

 

Nothing has changed as funds allocated to recurrent expenditure in more than 540 government agencies have, until recently, been more than what is set aside for infrastructural development.

 

Our 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 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 N449.6billion 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.

 

We recall that when former President Obasanjo was beginning his second term, recurrent expenditure had moved closer to the N1trillion mark at N984.3billion in the 2003 budget while capital expenditure was less than N400billion.

 

More than 20 years later, the federal government still persists, seemingly helplessly, in spending more on public servants than providing for the larger majority of the Nigerian people. This translates to near non- existent capital formation in those years leading to aggravated deficit in infrastructural facilities. Now, the country has grown into a behemoth of more than 200 million people with a below par infrastructure availability. This is in spite of two oil booms between 2006 and 2013 recorded by the economy.

 

To put this in proper context, Nigeria has witnessed two crude oil engendered revenue boom, not by any conscientious policy conceptualisation or deployment but, rather, by providence. Oil price increased in the global market place and it reflected in our national revenue earnings. This has been the nature of prosperity in the country; increase in prices of crude oil leading to more earnings, not in consequence of deliberate policy development and application.

 

Between 2006 and 2013, the national economy grew at an average of between 6 and 8 percent according to World Bank figures yet the increased revenue was channeled into feeding public servants. The recurrent expenditure in those years was always bigger than allocation for capital expenditure.

 

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.

 

 

It would, however, appear that the disequilibrium between capital and recurrent expenditures has been eventually corrected. For the first time in the current democratic dispensation, the 2024 budget, which is the first in the tenure of the President Bola Tinubu administration, has more funds allocated to capital expenditure than recurrent. The budget of N28.777 trillion for the 2024 fiscal year has a recurrent expenditure of N8.7 trillion with N9.9 trillion allocated to capital expenditure.

 

Granted that what was passed by the National Assembly was N1.28trillion more than 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.

 

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.

 

 

Signed

Chief Niyi Akinsiju, Cifian

Chairman,

Independent Media and Policy Initiative (IMPI)

March 11, 2024.

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Stakeholders Unanimously Endorse Repeal and Re-Enactment of Shippers’ Council Bill

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*Stakeholders Unanimously Endorse Repeal and Re-Enactment of Shippers’ Council Bill

 

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In a resounding show of support, stakeholders in the maritime industry have overwhelmingly accepted the proposed repeal and re-enactment of the Nigerian Shippers’ Council and Economic Regulatory Bill during a public hearing held at the National Assembly in Abuja.

The public hearing, which was attended by representatives from various sectors of the industry, including shipping companies, freight forwarders, and cargo owners, saw a unanimous endorsement of the proposed legislation.

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The new bill, which seeks to repeal the existing Nigerian Shippers’ Council Act and enact a new Shippers’ Council and Economic Regulatory Act, aims to strengthen the regulatory framework for the maritime industry and promote economic growth.

Recall that following the Federal Government’s announcement of the NSC as a Port economic regulator, the agency has struggled to enforce sanctions on ports and shipping stakeholders in the nation’s maritime sector due to the absence of an enabling law backing up their status as a Port Economic Regulator.

Stakeholders, on Monday, praised the proposed legislation for its provisions, which include the establishment of a more effective and efficient regulatory framework, the promotion of competition and innovation, and the protection of the rights of shippers and other stakeholders.

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During the public hearing organised by the Committee on Shipping Services and Related Matters, the Executive Secretary/ CEO of the Nigerian Shippers’ Council, Pius Ukeyima Akutah, described the legislation as timely at this stage of our nation’s growth and development.

He said the need for a regulatory regime to ensure effective and efficient economic regulation for the control of tariffs, rates and charges to prevent arbitrariness is necessary.

Among many others, Akutah said the Bill will enhance the ease of doing business, minimize the high cost of doing business at the ports, ensure seamless movement of cargo, promote competition and enhance the quality of service.

“The Bill essentially embellishes the fundamentals of Economic Regulation, making all actors play by the rules,” he added.

“The Nigerian Government is evolving a Regulatory Agenda across all sectors, with economic contribution as the goal. The shipping industry should not be an exception.

“There is, therefore, no better time than now to enact this, Bill. I therefore most respectfully, urge esteemed stakeholders to make meaningful contributions toward its immediate passage and enactment.”

He further expressed his gratitude to the stakeholders for their support and assured them that the council would continue to work towards ensuring a conducive business environment for all players in the industry.

Chief Adebayo Sarumi, a former CEO of the Shippers Council said a regulatory body is late by no less than 20 years.

According to him, this will bring about a level playing field, and regulatory services and ensure that the consumers do not suffer.

Malam Hassan Bello, a former CEO of the Shippers Council said the Bill will be a crowning glory of the Federal Government’s efforts in the maritime sector.

“This proposed agency will fill the regulatory vacuum that has bedevilled the sector, the reason the ports are not making contributions. It will end the monopoly.

“The bill is fundamental and essential and will correct anomalies and guarantee efficiency and use of tech in ports operation.“

Meanwhile, Boma Alabi, SAN, representing the Shipping Lines Association of Nigeria said the body welcomes any act that will improve efficiency, lower costs and reduce bottlenecks.

She further said the Nigerian ports cost the nation twice as much as our neighbours.

Ahmed Rabiu, a concerned stakeholder said the Bill has been overdue since the time ports were concessioned, calling for its speedy consideration.

Other stakeholders like the National Association of Government Approved Freight Forwarders (NAGAFF), and the Nigeria Economic Summit Group backed the development.

In separate remarks, they said the absence of a regulatory agency stifled economic activities.

They further said the passage of the Bill will have a positive impact on the maritime industry, leading to increased efficiency, reduced costs, and improved services for shippers and other stakeholders.

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Evangelist Dr. Lekan Remilekun Amos Celebrates his birthday In Style

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Evangelist Dr. Lekan Remilekun Amos Celebrates his birthday In Style.

 

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Evangelist Dr. Lekan Remilekun Amos L.R.A has been in the music industry for decades and he has been doing wonderfully well among notable gospel singers in Nigeria and beyond, operating with the Holy Spirit with his euphonious voice!.

Delivery is crucial to good performance, having hits limelight for several years L.R.A as Dr Remilekun fondly called by his teeming fans has turned every year to a year of blessings and breakthrough for his fans across the globe with his melodious and evergreen songs.

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No wonder, despite the numbers of singers who have made it big in the highly competitive industry, L.R.A has a very successful careers in the music industry, the anointed gospel music minister , an astute teacher of the words of God and a lover of creativity is a strong force to recon with in the music world.

The ilaje born singer was able to capture the heart of many people from onset with his soul lift albums, starting from his debut, ‘Palawan Olu Omo,’ Olorun Esan, The light, Ifarada, Afowafa, Igi Aruwe, to the Aye soro that brought him to limelight , To Oluwa de.

L.R.A has used his gifted talent to change the life of many souls, even those who are not his fans with the lyrics inscribed in one of his tracks ‘Oluwa de’ in his Album ‘Ipele Aanu’ (Levels Of Mercy).

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However, Evangelist Dr. Lekan Remilekun Amos, Exactly 1:00 am (Nigerian time) posted on his Official Facebook page thanking the Most high God For keeping him alive till today as he Celebrates his Birthday. He said “THE START OF A NEW BEGINNING!
Behold I establish my covenant with you & your seeds after you ( Gen 9:9)
GLORIFY GOD WITH ME ,IT’S. MY BIRTHDAY.”

Since the post published, People across the world have been Congratulating him for the celebration of his birthday in 2024.

The most interesting part it was that L.R.A has scheduled a Special Birthday Online Revival/ Praise Program Tagged “The start Of New Beginning that would equally featured other Anointed Gospel Artist like Lady Evang. Aduke Gold, Prince Olu Wale Aniyikaye, Elder Niyi Fadipe amongst others, as the multiple awards winning gospel singer is set to returns all the glory back to who it Belongs to (God) the online thanksgiving show would hold 5pm (Nigerian time) via his YouTube and Official Facebook page.

Happy birthday to the most accommodating, creative, highly resourceful singer of God, a very big birthday to a man who has brought many innovatives to the gospel singer, a toast to an enigmatic and intellectual charismatic leader.

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REWARD FOR EXCELLENCE: BURATAI AS SHINING LIGHT OF NORTHEAST

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REWARD FOR EXCELLENCE: BURATAI AS SHINING LIGHT OF NORTHEAST

 

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Sahara Weekly Reports That The Concerned Citizens of Northeast hosted their Awards and Dinner event, where distinguished individuals were recognized for their outstanding contributions to the region. Among the awardees were notable figures such as Prof Babagana Umara Zulum, Sheikh Goni Umar Goni Usman, and Ummu Kalthum Muhammad. However, it was Amb Lt Gen Tukur Yusufu Buratai CFR who stole the spotlight as the shining light of the Northeast.

 

 

 

 

REWARD FOR EXCELLENCE: BURATAI AS SHINING LIGHT OF NORTHEAST

 

 

 

During the event, Maj Gen ID Penap praised Buratai, stating that he deserves every blessing that comes his way. He commended Buratai for his visionary leadership and described him as a proud son of the Northeast. Guest speaker Dr Hassan Zanna Boguma also lauded Buratai for his transformative military leadership, which led to the defeat of Boko Haram in the region.

 

 

 

 

 

 

 

 

 

 

 

 

In his acceptance speech, Gen Buratai expressed his gratitude for the award. He emphasized the importance of supporting and empowering the youth, noting that they are often left behind in terms of employment and opportunities. Buratai called for innovative programs from both the government and private sectors to unlock the potential of the younger generation.

 

 

 

 

REWARD FOR EXCELLENCE: BURATAI AS SHINING LIGHT OF NORTHEAST

 

 

 

 

 

 

The former Chief of Army Staff highlighted the need for unity and development in the Northeast, with a focus on combating issues of ethnicity, religion, and sectionalism. The formation of the Concerned Citizens of the Northeast organization aims to provide a platform for North Easterners to come together and build a better future for the region.

 

 

 

 

 

 

 

 

 

 

 

Overall, Amb Lt Gen Tukur Yusufu Buratai’s recognition as the shining light of the Northeast serves as a reminder of the importance of strong leadership and dedication to the development of the region. His commitment to empowering the youth and driving positive change sets a powerful example for others to follow.

 

 

 

REWARD FOR EXCELLENCE: BURATAI AS SHINING LIGHT OF NORTHEAST

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