Nigeria’s 2024 budget of N27.5 trillion has continued to generate mixed reactions in the public space.
There is a blend of pessimism and optimism on whether the budget would impact the lives of ordinary people, especially the proposed N1.33 trillion on infrastructure.
The concerns were heightened as Nigeria’s Budget in recent years had hardly witnessed optimal performance.
The 5 per cent infrastructure allocation, which is N1.33 trillion despite the country’s huge infrastructure deficit, has further compounded the fears among Nigerians.
Infrastructure, including provisions for works and housing, power, transport, water resources and aviation, are major drivers of the country’s economy; some experts believed the N1.33 trillion would not address the country’s annual infrastructural gap.
Meanwhile, a single annual budget cannot address the nation’s infrastructural challenges, another expert told DAILY POST.
Christened Budget of Renewed Hope, a perusal of the Budget showed that Security and Defence took the highest allocation with N3.25 trillion, representing 12 per cent, going in the same trend as former President Muhammadu Buhari administration.
With a budget allocation of N2.18 trillion, education trailed behind security and defence.
An additional analysis of the 2024 budget indicated that the total figure is 10.8 per cent higher than N24.82 trillion in 2023.
Accordingly, the Minister of Budget and National Planning, Atiku Bagudu, said the budget targets an estimated revenue of N18.32 trillion, with a deficit of N9.18 trillion.
Also, in the proposed budget, N8.490 trillion, representing 30 per cent, is for debt servicing, N9.918 trillion is for recurrent non-debt expenditure, and N7.717 trillion is for contribution to the Development Fund for capital expenditure.
Other highlights include a Crude Oil Benchmark of 77.96 USD per barrel benchmark, a daily oil production of 1.78 million bpd and a foreign exchange rate (Naira-USD) of N750.
This has become most important as the survival of the country’s economy heavily relies on infrastructural development. The sector has been strained by fuel subsidy removal since June 2023, resulting in a ripple effect in the high cost of transportation, food, and other essential services.
Speaking with DAILY POST on Monday, the CEO of SD & D Capital Management, Mr Idakolo Gbolade, expressed pessimism about the proposed budget achieving its set goal, especially concerning its impact on ordinary Nigerians.
He said the N1.33 trillion budgeted for infrastructure failed to reflect the savings from fuel subsidy removal in June.
According to him, the saving of fuel subsidy in five months was allegedly squandered by the three tiers of Government instead of being used to impact ordinary Nigerians positively.
Gbolade opined that the budget estimate hinged on N750/$1, and a daily crude oil production of 1.78 bpd is unrealistic and may hamper its implementation.
“The Federal government budget titled ‘Budget of Renewed Hope’ might dampen the hope of Nigerians if not properly implemented.
“Although the figure earmarked for debt servicing in the 2024 budget is a little lower than 2023 debt servicing estimates, it is still very high and will affect infrastructural development.
“The savings from oil subsidy removal in the past five months have not been put to judicious use because ordinary Nigerians have not felt the impact.
“Instead, it has left more money for the Federal Government, the states, and the LGs to share and squander, especially the states.
“The budget for infrastructures like electricity, roads, transport and housing is grossly inadequate to meet the challenges on the ground, coupled with the haphazard manner in which budget implementation is done in the country.
“The N534 billion budgeted for social development is by far the highest budget estimate to target poverty alleviation, but for it to be effective, the investment must be made seriously on alternative energy like Compressed Natural Gas and electric vehicles to reduce the high cost of petrol, agriculture, education, e.t.c.
“Also, I strongly believe that the budget estimates hinged on 750/1$ and daily crude oil production of 1.78 Mbps is not realistic and may affect the implementation of the budget. The previous administration’s budget was implemented sometimes up to 70 or 80 per cent.
“Yet, it was not impactful due to continuous inflation and wrong monetary policies, so it is left to be seen if the 2024 budget will be a departure from the past,” he told DAILY POST.
On his part, a don at the Lead City University in Ibadan, Prof Godwin Oyedokun said historically, Nigeria’s budget performed below expectations.
He said the 2024 budget should be business unusual as Nigerians were under serious hardship.
He envisaged that the 2024 budget should take a percentage of Nigerians out of multidimensional poverty if properly implemented.
Oyedokun called for more fiscal responsibility on the part of the Government.
He told DAILY POST: “Historically, Nigeria’s budget has not performed the way it should. That doesn’t mean that we should continue the trend.
“The budgetary allocation should take Nigerians out of poverty so that we will have fewer people in the multidimensional poverty index.
“Every Budget should have a positive impact on every Nigerian. For instance, road infrastructure would impact all Nigerians positively despite the location.
“But, if ordinary Nigerians are looking for the cash in hand through the Government, a direct impact may not be seen but an indirect impact.”
However, a renowned economist, former President, and Chairman of the Council of Chartered Institute of Bankers, Prof Segun Ajibola is optimistic that the budget would impact Nigerians if all the provisions were implemented.
“The infrastructural deficit in Nigeria has been put at about $300 billion by analysts. This figure cannot be accommodated via the annual budget of the national and sub-national governments. Different funding arrangements are sine qua non as the budget is largely constrained.
“A more realistic funding template to fix the infrastructural deficit may include Public Private Partnerships, Joint Ventures, Build, Operate and Transfer (BOT) among other models.
“As of today, some of these alternatives are seen in transportation (railway), roads, etc. It is, therefore, not feasible to think that an annual budget will resolve the perennial infrastructural deficit in the country.
“Most times, the budgetary figures for the various infrastructures may not be adequate to maintain what is already on the ground, plus some small new ones.
“On the social development and poverty reduction programme, the extent of its impact would be the manner of its implementation.
“The responsible agency should do all that is necessary to eliminate ‘middlemen’ in the distribution process. This would help assist the targeted beneficiaries: the downtrodden in society. And by doing so, the impact would be resounding.
“Overall, the 2024 budget is expected to improve the life of an average Nigerian. But much depends on the level of implementation of its various provisions,” he told DAILY POST.