Budget of Renewed Hope Faces Skepticism Over N1.33 Trillion Infrastructure Allocation

Nigeria’s recently proposed budget for 2024, totaling N27.5 trillion, has stirred a mix of optimism and pessimism among the public, particularly concerning the allocation of N1.33 trillion for infrastructure. This figure, representing 5% of the total budget, has sparked worries about its adequacy to address the country’s substantial infrastructure deficit.

Despite being labeled the “Budget of Renewed Hope,” analysts express doubts about the budget’s potential impact, given the historical underperformance of Nigeria’s budgets in recent years. The allocation of N3.25 trillion (12%) to Security and Defence, mirroring previous administrations, further adds to the skepticism.

Education, with a budget of N2.18 trillion, follows closely behind, but concerns persist about the allocation of resources to critical sectors. The total budget is 10.8% higher than the previous year, amounting to N24.82 trillion in 2023.

Atiku Bagudu, the Minister of Budget and National Planning, stated that the budget targets an estimated revenue of N18.32 trillion with a deficit of N9.18 trillion. Notably, N8.490 trillion (30%) is allocated for debt servicing, while N9.918 trillion goes to recurrent non-debt expenditure, and N7.717 trillion contributes to the Development Fund for capital expenditure.

The CEO of SD & D Capital Management, Mr. Idakolo Gbolade, expressed concern that the N1.33 trillion allocated for infrastructure fails to reflect the savings from the fuel subsidy removal in June 2023. Gbolade questions the realism of the budget estimates, particularly the N750/$1 exchange rate and daily crude oil production of 1.78 million bpd.

In a contrasting view, Prof. Segun Ajibola, a renowned economist and former President of the Council of Chartered Institute of Bankers, remains optimistic. He suggests that an annual budget alone cannot address the $300 billion infrastructural deficit, advocating for alternative funding models such as Public Private Partnerships.

While skepticism lingers about the 2024 budget’s effectiveness, the overall impact, according to Ajibola, will hinge on the thorough implementation of its various provisions.