One of the most controversial part of Nigeria budget proposals is the pattern of allocation of expenditure particularly between recurrent and capital elements of the budget.
Successive government have been criticized by economic observers for allocating huge percentage of the budget to service bureaucracy and elected government officials to the detriment of capital projects
Nigerian over-blotted civil service with its very high graft tendencies that must ensure continuous allocation of huge budgetary expenditure to it leaving very little for developmental project.
The present government earlier promise of change and was accepted based on it promise to change the present narrative could however be seen in the budgetary proposal since it came to be in May 2015. What is however not clear is the implementation of the proposal as presented.
Figures from the relevant government agencies on the budget figures since the new administration came to be did suggested a slight departure from erstwhile budgetary allocation for capital projects and bureaucracy servicing.
Here is a cursory look at percentage allocation of the annual budget of the Nigerian government to different expenditure heads from 2011 to the current year 2019. including the 2020 budget proposal recently presented to the national assembly by President Muhammadu Buhari.
2011 to 2015 are the actual expenditure percentages (A), 2016 to 2019 are the estimated budget (E) as approved by the National Assembly while 2020 is the proposal (P) presented to National Assembly for consideration and passage.
The Nigeria budget expenditure pattern have changed significantly from the 2011 actual budget implementation to the recent 2020 budget proposal presented by the president to the National assembly.
The figures show debt servicing increased from 11.19% of the 2011 budget to 23.72% of the 2020 budget proposal, the highest being the 26.41% of the 2016 budget estimates. Analyst and concerned bodies, both local and international have expressed worries over the unsustainability of using an increasing percentage of the budget to service loans.
The percentage of the Nigeria budget transferred to foreign reserve have also shrunk significantly from 9.97% in the 2011 budget to the proposed 5.39% in the 2020 budget. The highest percentage from 2011 being the 10.16% in 2013. The current government has however displayed good commitment to grow the countries foreign reserve despite the meagre resources available to it. Nigeria’s reserve which stood at $45.07 billion as at June 2019 has been growing steadily on the government fiscal discipline of zero extra budgetary spending from excess crude oil account.
Percentage of Nigeria budgets for capital expenditure has increased over the years from a paltry 8.5% in 2011 to 23.82% in the proposed 2020 budget, the highest being the 30.67% in the 2017 budget estimates. Nigerian Banker believes that this is the right way to go for a country in dire need of infrastructural development like Nigeria.
Capital expenditure have been used world over to stimulate economic activities and create jobs, what is left to be seen however is the true impact of the increased capital expenditure spending.
In the area of recurrent expenditure, the budgetary pattern of current government is evidence of its willingness to dislodge itself from the hydra-headed monster that is largely responsible for the stagnation of the Nigerian economy.
From the over 70% budgetary allocation to corruption ridden and over bloated civil service and elected officials to the 47% in the 2020 budget proposal, the percentage of Nigeria budget for recurrent expenditure has been reducing consistently. More needed to be done however, especially in the area of the humongous salaries and benefits of elected officials. it is indeed shameful to know that Nigeria elected officials earns higher than politicians in most part of developed world.
Budget Implementation is also key if the budget is to make any meaningful impact. In previous budgets only recurrent expenditure were implemented to about 100 percent. Capital expenditures despite its meagre percentage was implemented to less than 50 percent.