…Budgets 84% for capital expenditure, 16% for recurrent
Stephen Ukandu, Umuahia
Abia State Government is to spend N567, 240, 095, 972. 00 for the 2024 fiscal year.
This would be the highest budget proposal since the history of the state.
The proposal showed N400 billion increase from the 2023 budget of N160 billion proposed by former Gov. Okezie Ikpeazu.
Gov. Alex Otti who presented the budget Tuesday before the Abia State House of Assembly, said it was aimed at rejuvenating the state’s economy.
Otti who said the 2023 budget had recorded over 60% implementation, promised to use the 2024 appropriation to sustain and improve on the gains of his administration.
Christened “Budget of New Beginning,” Otti said the target of the proposal was to open up every frontier of the state economy for both local and foreign investors.
The Governor said he personally structured the key items in the budget to reflect the priorities of the state.
“The above figure, in nominal terms, represents more than N400 billion rise from the 2023 estimate of N160.5 billion although when adjusted for inflation and fall in the value of the naira, the reality becomes starkly different,” Otti said.
Otti informed the lawmakers that 84% of the budget would be spent on capital expenditure while 16% was estimated for recurrent expenditure.
“The key distinction in the 2024 budget estimate, however, is in the direction of spending. While the 2023 projection allocated 53% of the entire budget for capital expenditure, our target in the 2024 fiscal year is to spend 84% of the total expenditure on capital projects and commit 16% to recurrent expenditure, as against 47% in the 2023 estimates.”
“We target 20% and 15% of the aggregate budget spending on education and health respectively,” Otti added.
Gov. Otti projected N166 billion as total revenue earnings, and said that the deficit would be sourced through borrowings.
He, however, promised that the loan would be specifically for capital projects.
“Of the proposed figure, government’s estimated total revenue is N166,077,717,058 including earnings from our IGR channels, Federation Accounts Allocation Committee (FAAC), grants from multilateral organisations and income from other revenue sources that will be available to the state government over the course of the accounting year.
“We plan to finance the deficit of N401, 162, 378, 914 partly by new borrowings estimated at N385, 271, 027, 214. 50% of this borrowing will be sourced externally, whilst the balance will be procured domestically.
“It must at this point be stated that all borrowing in the 2024 fiscal year would be committed strictly to capital development projects with direct impact on the economy of the state, especially roads, schools and medical facilities.
“The projection is that the impact of these projects on the general economy in the medium to long term would generate the sufficient returns that would enable the state meet her obligation to the creditors smoothly and ultimately pay off the loans in due course.
“The assurance I want to give Mr Speaker, Honourable members and to every Abian is that under my watch, not a dime shall be borrowed to finance recurrent expenditure. All borrowing will be negotiated on terms that are favourable to the state.”
On why his administration would go for loan, Otti said: “Rebuilding the state’s public infrastructure requires the sort of targeted financing we cannot immediately access within the state so there is the need to borrow to fund the projects that would kick-start the economy and make us competitive on a global scale.”
“In the 2024 fiscal year, the state proposes to commit 44.76% of the budget on the economic sector with the larger chunk of the resources going into works, (16.97%), land and housing (9.9%), agriculture (5.12%), and finance, (5.23%).”
The Governor told Abians to expect massive infrastructural development in 2024, saying he came on board to set a new pace.
“We shall be committing major resources in the 2024 financial year to the reconstruction and rehabilitation of some of the most important roads along the major economic corridors of the state.”
He promised to compete all capital projects already initiated by his administration, and to embark on new ones.
“The budget has provided for completion of some of the projects we started in 2023 including Port Harcourt Road Aba, Ossah Road, Umuahia-Uzuakoli-Abiriba-Ohafia Road, Ozuabam-Ndi Okereke-Arochukwu Road, the dualisation of Umuikaa-Umuene-Omoba Road, Dualisation of Owerrinta-Umuikaa Road, Nunya-Eluama-Isuikwuato Road, Onuimo-Abia Tower Road amongst others as well as the commencement of new road projects in parts of the state.”
While urging the lawmakers to consider and pass the budget swiftly to fast track development, Otti promised to be transparent in implementing the Appropriation bill when passed and signed into law.
“More importantly, the citizens and other stakeholders would have the opportunity to monitor how the funds are being spent and the impact of the projects on their communities, from inception to completion. This is very important to guarantee transparency and as a listening government, your inputs would always be very important in our decision making process.”
Otti also disclosed that a salary increase for Abia workers had been captured in the 2024 budget.
Meanwhile, the Speaker of the State House of Assembly, Rt. Hon. Kingsley Emeruwa, has commended the Governor for “the robust budget,” which he noted was the highest budget every proposed in the state.
The Speaker said that the budget, when passed into law, would help stimulate the economy of the state.
He promised speedy consideration and passage of the proposal to help move the state forward.
Abia members of National Assembly from different party divides accompanied the Governor to the State Assembly for the budget presentation.