– Written by Eagle Okoro, a public affairs commentator
The Abia State Governor, Dr Alex Chioma Otti, took a reassuring step on Tuesday to further demonstrate his avowed and unwavering commitment toward achieving a major paradigm shift in the state’s unimpressive development narrative, since its creation.
With the presentation of an ambitious, whopping N567.2 billion budget estimate to the 24-member House of Assembly, the governor appears fully and firmly poised to go full steam ahead in implementing his robust development package for the realisation of a New Abia of everyone’s dream.
It is generally believed that the massive budget proposal would significantly mark a turning point in Abia’s sluggish economic growth and radically trigger off a revolution that would permanently combat the huge infrastructure deficit and evoke a sufficiently buoyant and prosperous economy.
The budget proves to conform with the governor’s persuasion and campaign mantra that the state could not make any meaningful growth in both the economic and infrastructure development with the perennial subsistence budgetary outlays that were synonymous with previous administrations.
His advocacy was that there was no magic that could make the state develop with the small size of the budgets year in, year out.
Indeed, the size of a budget logically determines the size and quality of projects that a state or country plans to implement in any given financial year vis-a-vis its revenue projections.
A simple analogy can be drawn from the popular saying that the size of a man’s pocket determines what he buys from the market.
So, when Mr A goes to market with N100,000 and Mr B with N1 million, it is obvious that while Mr A will clutch what he purchased in a walkie-talkie cellophane bag, Mr B would certainly need a truck to move his own goods.
This again is further explained by the size of budgets for big economies, such as Lagos, Rivers and Delta States, which have long hit the trillion naira threshold, while small economies are struggling far behind within the billion naira threshold. For instance, the Lagos State budget for 2023 was N1.326 trillion, while that of Abia was N160.5 billion. You can imagine the humongous difference!
Above is a layman’s simplest way to explain the difference between a big budget and a meagre, slim budget. And even though they are both called budget, their outcomes defer.
So, if we agree that the size of the budget of a state determines the amount of projects the government plans to implement as well as the existential impact it hoped to make on infrastructure, economy, environment, health, education, agriculture, human capital development, security and sundry other key development indicators, it means that past governments in Abia were simply either unambitious, unserious or both.
It will suffice to pause for a moment to do a brief comparative analysis of Abia’s budgetary outlays between 2020 and 2023 for a more graphic understanding of the deliberate self-inflicted failures of past administrations.
In 2020, the budget was N102.6 billion but rose to N131.8 billion in 2021, representing 28 per cent increase.
The 2022 budget of N147.2 billion had a 12 per cent increase and the N160.5bn budget for 2023 had nine per cent increase.
Remarkably, the scenario changed drastically with the 2024 budget of N567.2bn, representing a staggering 353 per cent increase above that of 2023.
A closer look at the budget outlays would simply expose a downward trajectory in the percentage increase from 28 per cent to12 per cent and nine per cent in 2021, 2022 and 2023, respectively.
Perhaps, the percentage decrease could have hit an all time low in the 2024 appropriation but for God’s intervention on March 18, with the emergence of Gov. Otti, a First Class Economist and reputable financial expert.
He has expectedly put his best foot forward with his first budget proposal, as expectations are high that he would leverage his vast knowledge of how sound budget fundamentals could be fully and practically deployed to rejuvenate and recreate a sound economy for the envisaged New Abia.
It is quite gratifying to see a Capital Expenditure projection of N476 billion, representing about 84 per cent of the entire N567.2 billion budget, and a Recurrent Expenditure of about N91 billion, representing a mere 16 per cent of the total budget envelope.
As aptly captured by the Speaker of the state House of Assembly, Mr Emmanuel Emeruwa, while receiving the Appropriation Bill on the floor of the house, the huge budget outlay is highly commendable as it is phenomenal and unprecedented in the history of the state.
The implication of the impressive budget proposal for the 2024 financial year is that Abia would witness massive capital project implementation never experienced in its 32 years of existence.
According to the governor, the bulk of the capital expenditure proposal would be spent on road infrastructure, building and equipping of new schools (education) and hospitals (health).
The governor’s modest revenue projection stood at slightly over N166 billion, expected to accrue majorly from the state’s internally generated revenue (IGR) sources, earnings from the Federation Account Allocation Committee as well as “grants from multilateral and donor agencies and all other revenue sources that shall be available to the state in the course of the year”.
The governor explained that the over N401.2 billion deficit would be financed by new borrowings estimated at N385.3 billion.
He further announced that 50 per cent of the loans would be sourced externally, while the balance would be procured domestically.
He also said, “Loans will only be procured at concessionary rates and committed strictly to projects that have direct impacts on the economic and social development of the communities in all parts of the state.”
It was pleasing to the heart to hear the governor give his commitment “to the responsible use of borrowed funds”.
More grarifying was his promise that the government would not borrow to finance recurrent expenditure. This means that government would meet its recurrent expenditure projections from its IGR.
Hear him: “Funds will be used strictly for capital projects, not a penny shall be borrowed for recurrent spending.
“Additionally, citizens can monitor how the funds are being spent and project execution in their communities.”
Another significant component of the budget is the fact that it captures the civil servants’ anticipated new wage structure “to reflect the economic realities of the time”.
Obviously, the governor’s maiden budget was intentionally prepared to reward Abia and its good people for all their trust, support and undying love for him and his Labour Party-led governmemt.
It was therefore reassuring when he said: “The 2024 fiscal year promises something great for the common man in Abia.
“Call it a budget of restoration, rebuilding, new beginning and you would be very correct.
“The truth is that Abia will never remain the same again.
Congratulations Ndi Abia, your reward is here.”
A Finance Expert, Dr Anthony Nwaubani, shares his insight into the budget, which he rechristened, “A Budget of Infrastructural Repositioning”.
Nwaubani holds the view that by the nature and mix of the budget on its own, it is potentially bound to have positive multiplier effects on the economy.
He said, “Imagine 84 per cent of the budget going into Capital Expenditure. It means that Abia State will become one huge construction site.”
He further believes that the budget would impact positively on every facet of the state economy, including the food vendors, artisans, commuter-vehicle operators, masons and so on.
“Civil engineers and contractors will beat their paths to Abia State. The hospitality industry will be on hand to receive them.
“Our timber markets will start to bubble with activities as building materials will also be in high demand.
“Dredging and quarry sites will become real business grounds as demand for sand, stones, chippings and gravel must go up. This is just a fall out from the nature/mix of the budget,” Nwaubani said.
A major setback to past budgets in Abia, nay the country, has always been poor implementation, hence the most beautifully prepared budget proposals have abysmally failed or underperformed in meeting their expected deliverables.
But the Commissioner for Finance, Mr Mike Akpara, himself a financial guru by all standard, has allayed the fear about a possible budget failure or underperformance.
He gave an assurance that the implementation of the 2024 Appropriation, christened “Budget of New Beginning” is sure to succeed.
According to him, the budget will be implemented by individuals but under great supervision to maintain standards and agreed covenant with fund providers.
“This will engender efficient utilisation and improve the creation of infrastructures that will encourage development.
“The present government will insist on doing the right thing to put the state in the good books of fund providers and donor agencies.”
That being the case, the citizenry can go to bed confident that the Otti-led government is tenaciously committed to rebuilding the battered Abia economy and creating a New Abia, where great opportunities abound for everyone to express their potential for self-actualisation and exponential economic growth and development.
– Eagle Okoro, a public affairs commentator, writes from Umuahia