2024 budget and New Year message for Tinubu

On November 29, President Bola Ahmed Tinubu laid before the National Assembly a draft budget for the year 2024. The Appropriation Bill themed Budget of Renewed Hope has been described by economists as unprecedented in the history of Nigeria. The proposed budget seeks to achieve job-rich economic growth, macro-economic stability, a better investment environment, enhanced human capital development, as well as poverty reduction and greater access to social security.

The N27.5 trillion Appropriation received deafening ovation from well-meaning Nigerians because in the country’s modern history, we have never had a national budget so prioritised on critical areas like security, job creation, poverty reduction, human capital development, infrastructure and all that tend to improve the welfare of the citizens. This alignment with crucial national concerns can potentially address pressing issues and spur development.

The draft budget, premised on conservative oil price benchmark of $77.96 per barrel and a daily oil production estimate of 1.78 million barrels per day. These were adopted after a careful review of global oil market trends. An exchange rate of N750 per U.S. Dollar was adopted for 2024 as well.

Permit me to belabour Tinubu’s 2024 budget with a breakdown. Total proposed expenditure: N27.5 trillion; Non-debt recurrent expenditure: N9.92 trillion; Debt service: N8.25 trillion; Capital expenditure: N8.7 trillion; Projected deficit: N9.18 trillion (3.88% of GDP). Key allocations: Defence and internal security: Highest priority; budget aims to overhaul architecture for better law enforcement; Human capital development: Education, healthcare, and social security receive significant allocations; Infrastructure: N1.32 trillion dedicated to sectors like works & housing, power, transport, and water resources; Economic diversification: Focus on agriculture, mining and manufacturing to reduce dependence on oil.

The overwhelming accolade, notwithstanding, there are those who have come down hard on the budget, describing it as empty and impossible to implement. That is to be expected because different shades have different interests to protect. While self-serving and armchair critics continue to carpet the Appropriation Bill because of their pedestal interests, renowned economists did not only give thumbs up to the proposed budget but have gone ahead to suggest the best way the budget can be implemented to meet the yearnings of Nigerians. 

I must express disappointment with what has become of opposition politics in our clime. In the good old days, the voice of opposition offered constructive criticism of government’s policies and programmes aimed at offering alternative solutions. Through this means, the quality of governance is enriched. What we have today are blind criticisms without offering a better way out. This is crude opposition and it must be disregarded.

Despite the push and pull, my assignment here is to as much as possible present a balanced outlook of the budget devoid of partisanship. It is to lay bare what Nigerians are to expect and the pitfalls the Tinubu administration must avoid so that the budget can deliver on its expectations.

Suffice to state in unequivocal terms that the 2024 budget is a radical departure from what we used to have in many respects. For instance, economists throughout history have favoured high priority on capital expenditure over recurrent in budget planning and implementation because it increases labour participation, takes stock of the economy and raises its capacity to produce more in future.

Along with the creation of assets, repayment of loan is also capital expenditure, as it reduces liability. Tinubu has done exactly that in the budget under review. For instance, increased capital expenditure; compared to 2023, the proposed capital expenditure (N8.7 trillion) shows a significant rise, indicating potential for greater investment in essential infrastructure and productive sectors.

Another area of departure from “as usual mentality” is lower projected deficit. The projected deficit, though substantial, is lower than the 2023 figure. This could signify some progress towards fiscal consolidation and reduced reliance on borrowing.

Additionally, the 2024 budget placed emphasis on job creation. Its focus on job-rich economic growth suggests a commitment to tackling unemployment, a major challenge in Nigeria. Any effort aimed at mopping the army of our jobless youths off the streets should be supported by all and sundry.

Common security intelligence is enough to draw a correlation between unemployment, poverty and insecurity. As a time-tested truism goes, “An idle mind is the devil’s workshop”. We have seen the steady rise in youth restiveness in the last two decades, owing to the inability of successive Nigerian governments to properly implement job creation initiatives. At best, such programmes have become conduit pipes through which state resources are siphoned. That is why the Tinubu administration must not take for granted the recommendations in subsequent paragraphs.

Wisdom demands that, “No matter how porous is the argument of a foolish man, there must be one lesson to be learnt.” Hence, we can’t throw away the baby with the bathwater. Again, the ultimate demonstration of wisdom and strength is in the ability to listen and learn from the opinion of others, no matter how feeble. Nigerians have expressed some fears that President Tinubu must not treat with levity. After all, the means and ends of government is about their welfare.

For instance, the absence of breakdown of the National Assembly, the Niger Delta Development Commission and the North East Development Commission’s budget makes it opaque. For emphasis, the budgets of key revenue generating government entities, including the Nigeria Ports Authority (NPA), Nigeria Customs Service (NCS), Nigerian Maritime Administration and Safety Agency (NiMASA), National Petroleum Investment Management Services (NAPIMS), Nigerian Security Printing and Minting Plc (NSPM), to mention a few, are conspicuously missing from the proposed 2024 budget presented to the National Assembly. This has raised suspicion among Nigerians.

Other areas of concern to Nigerians include high debt service. Debt remains a significant burden, consuming a large portion of revenue. Critics argue for further debt reduction measures. If this budget must succeed, the Tinubu administration must ensure value for money, curb inefficient expenditure and waste, enforce accountability, and put Nigeria on the pathway of prosperity, economic growth and development.

The National Assembly must resist the unwillingness of GOEs and MDAs to submit their budget for public scrutiny. Legislative oversight and citizens’ participation are critical considerations in the budget process because borrowing will be added to the federal government’s balance sheet and affect future budget deficits (the impact of debt and debt service considered). Borrowing ought to be effective, transparent and efficient.

In addition and as prescribed, borrowing should be focused on capital expenditure and human capital development. This is because capital expenditure has a positive and significant impact on economic growth in the short and long run, while recurrent expenditure has no significant impact on economic growth in the short and long run.

We must not take for granted President Tinubu’s avowed commitment to broad-based and shared economic prosperity. This, he has demonstrated by the ongoing comprehensive review of social investment programmes to enhance their implementation and effectiveness. In particular, is the National Social Safety Net project which the government has started expanding to provide targeted cash transfers to poor and vulnerable households.

Of utmost importance is, instead of listening to critics who blindly condemn every action of government without offering constructive alternative views, Nigerians will do well to hold Tinubu by his promise to “contain financial leakages through the effective implementation of key public financial management reforms.”

All said; it is important to note that the budget is still under review and subject to change. Its ultimate effectiveness will depend on its implementation, economic performance and the ability to address critical concerns. Transforming budget plans into effective action on the ground is not a child’s play. It requires transparency and accountability in budget execution which are very crucial.

My key observation about budget implementation under past administrations is that corruption has eaten deep into the process of execution. This has impacted negatively on transparency and integrity of the Nigerian budget system, leading to compromise of the implementation process adjudication. These are some of the main issues President Tinubu must tackle head on next year in order to make a difference in governance and actualise his Renewed Hope Agenda.