Crucial to the prosperity of any nation is quality of her annual planning which impacts the living standard of her citizens.
Preparation and presentation of yearly budgets reflect the probable progress level capable of being attained by a state. This understanding lends weight to continuance of discussions and commentaries on the Nigerian 2019 budget. Awareness of having a government hoisting the flag of change raises expectation that it will penetrate this year’s budget, at least, but that is yet to happen.
Amidst all the drama and budgetary pitfalls magnified by well-meaning Nigerians, a glance at the 2019 budget reveals the repugnant wide dominance of recurrent expenditure over capital expenditure- a situation reminiscent of entrapment in a vicious circle. In spite of the obviousness of the need for this economic trend to be upturned, it is worrisome that little or no efforts have been made in this direction.
According to Punch, out of the estimated 8.83 trillion naira for the 2019 budget, 4.04 trillion naira has been earmarked for recurrent expenditure while 2.031 trillion naira is to take care of capital expenditure. This means expenses on rountine operations of government such as salaries, assets maintenance, servicing debts, et al, with minute or no potential of increasing.
Nigeria’s revenue base, is more than double (over 100%) of monies set aside to acquire new assets or improve the functional capacity of existing ones capable of leading to surge in revenue. What this economic forecast implies is that convention is trumping invention, infrastructural development is being sacrificed to run government.
The executive and legislature, among other tractable factors, seem to prioritize paying themselves robustly to the detriment of establishing more companies that can aid decrease current disturbing unemployment statistics. It is pitiable that those gratuitous jumbo pays are borne by the recurrent expenditure. With such a frightening gap between capital and recurrent expenditure in a developing country like ours, rising above being the poverty headquarters of the world may not be sooner than expected.
Stressing this fact, an economics expert, Oziengbe Scott Aigheyisi, in his article “The Relative Impacts of Federal Capital and Recurrent Expenditure on the Nigeria Economy (1980-2011)” in the American Journal of Economics, argued that “for a developing nation, capital expenditure (particularly in capital projects or infrastructure) ought to constitute significant proportion of her total expenditure, to lay the foundation for economic growth and sustainable development, but this has not been the case in Nigeria.”
Not taking cognizance of this viewpoint constitutes reasons why Academic Staff Union of Universities (ASUU) is presently on strike. Employable graduates have no jobs, some general hospitals are poorly equipped, there is intermittent power supply, hunger is thriving, and so on. Aigheyisi recommended that “Considering the current state of Nigeria’s economy, capital expenditure should be greater than recurrent expenditure in order to lay the foundation for sustainable development and growth.”
Thus, for the federal government to squarely address the slew of economic problems which beset her and make Nigeria attractive to foreign investors, reviewing the positions of recurrent and capital expenditure in the national budget cannot be overemphasized. This re-evaluation could just be the last straw the government can use to break the camel’s back of stagnancy in the nation.