• Sunday, February 25, 2024
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Budget 2024: Small but will it unlock prosperity?

On Nigeria’s current economic reforms

The Proposed Budget, according to reports, is expected to focus on infrastructure development, human capital investment and economic diversification. In terms of sectoral allocation, defense and security got the highest, followed by education and health in that order.

It’s not strange that any political party in power which forms a government at the center has certain social, political and economic responsibilities to its people. In many countries with deep cultural, religious and economic differences such as Nigeria, it’s necessary for the Federal Government (FG) and governments at state level to allocate resources prudently and effectively.

Factors such as uplifting the status of the poor in the society, providing standard education and health facilities, upgrading defense capabilities, facilitating financial inclusion, creating jobs and mitigating regional disparity among others need to be focused on. Thus, a well-planned budget is necessary for any government to ensure economic stability and growth.

Read also: The 2024 budget passes second reading at Senate

Often, at the end of the year, businesses and enterprises look forward to states and the FG budgets as resources being allocated to various sectors of the economy are revealed. It’s through the budget that governments encourage business owners to revise their policies in order to contribute to the country’s economic prosperity.

Presentation of budgets to the legislature for scrutiny is an annual national ritual. It’s not today that budgets are named at both states and federal levels in Nigeria. For instance, we’ve had Budget of “Quantum Infinitum” by the immediate past government of Cross River State led by Prof Ayade. Indeed, President Buhari’s last budget in office up to May 29, 2023, was tagged budget of “Fiscal Sustainability and Transition.”

We have seen for decades that various policies of governments irrespective of the names given to their budgets have not enabled revenues generated from matching spending requirements in Nigeria. The result is that our country is one of the highly indebted nations in Africa. That is why the name of the budget does not really matter in my view. Most Nigerians who are poor are not interested in the name given to the Proposed Budget because previous budgets have not delivered them from the shackles of poverty. Budget proposals have not brought prosperity to the people. It’s sad that after 63 years of independence, we still have weak institutions with millions of poor people. So, what’s different in President Tinubu’s budget?

The 2024 Proposed Budget referred to as “Budget of Renewed Hope” is a N27.5 trillion ($ 32.76 billion) budget reflecting an increase from the N21.83 trillion approved in 2023. The 2024 Proposed Budget has a projected revenue of N18.32 trillion ($24.4 billion) and a deficit of N9.18 trillion ($12.2 billion). The Proposed Budget, according to reports, is expected to focus on infrastructure development, human capital investment and economic diversification. In terms of sectoral allocation, defense and security got the highest, followed by education and health in that order.

As we present this article, oil is still the major source of foreign exchange revenue for the country. Bearing in mind the volatility in the price of oil globally, it’s expected that the Proposed Budget will address Nigeria’s financial needs. But most importantly, there is the need for governments at states and federal levels to ensure that funds allocated to various sectors of the economy reach where they are needed most. Data must be used to identify various segments of the society in need of development and welfare programs. Implementation of such programs will enable the government to deliver effective governance and achieve economic stability in the country.

Today, those in power know that most of our people are poor. Albeit, our country is one of the largest oil exporters in the world and Africa’s most populous nation. That most Nigerians are poor is not surprising as it’s not what the nation earns that matters but how the revenue accruable to the government is spent. It may be argued that Nigeria has chosen to run a deficit budget as usual because the federal government needs more money to finance infrastructure projects and to provide security for the people. Unfortunately, there is nothing significant to show for all the monies spent on infrastructure and security in the past. It’s work in progress, you may say.

A few reports have shown that the proposed budget of Nigeria for 2024 is not at par with other African countries such as South Africa, Egypt, Morocco and Algeria with fewer populations. Apart from these African countries, reports show that Turkey, Bangladesh and Vietnam have larger budgets than Nigeria.

It will be a miracle for the “budget of renewed hope” to cater to the economic needs of the country because of numerous challenges. If we consider the level of decay in both hard and soft infrastructure, the number of people who are poor, and rising level of indebtedness, coupled with devaluation of our currency, it’s doubtful if the Proposed Budget of Africa’s largest economy can do much.

Since a budget helps the government to focus more effectively on firms in the private sector by introducing policies to aid their growth, I urge members of states and national assemblies to look at proposed budgets lying before them with eagles’ eyes. If the proposed budget is to help the people and industry, it’s expedient to critically examine the 2024 Proposed Budget before being passed into law.

Any budget that’s not industry friendly and not structured to reduce the number of poor people is not worth the hype given to the presenter by legislators during presentation ceremony. A thriving industry will contribute immensely to the country’s economy by providing employment to a lot of people and generating revenues. While a prosperous nation will have many rich and successful citizens.

Read also: Kalu backs Tinubu’s 2024 Budget, says it will address Nigeria’s needs

The budget will certainly allow the government to regulate the imposition of taxes in various sectors of the economy. What the government does with the taxes collected is a matter for analysis in the near future. When the economy booms, the government through its policies can encourage people to save and invest more by providing tax rebates and subsidies. No responsible government runs away from subsidies.

It’s through the budget that threats of economic disparity and inequality among the people can be addressed. So, the local, state and federal levels of government must introduce public and economic welfare policies for the underprivileged members of the society.

It’s the implementation strategy of the 2024 Budget that will show clearly whether those in authority are willing, able and ready to fix reputational damage and build trust between the government and the people. Despite challenges in the international environment, there are opportunities which the FG must seize in ameliorating the suffering of the poor within its budget. We need to curb oil theft, while taking drastic steps to reverse the trend of increasing recurrent expenditure and decreasing capital expenditure. Above all, let’s avoid wastages in the economy. Thank you.

MA Johnson, Rear Admiral (Rtd)