Business Post Contributor
By Jerome-Mario Utomi
It is common knowledge that Delta State Governor, Sheriff Oborevwori, recently, presented a N714.4 billion Appropriation Bill tagged ‘Budget of Hope and Optimism,’ for the 2024 fiscal year to the state House of Assembly.
What is, however, uncertain to Deltans and the watching world is whose interest the bill, if passed, is meant to serve or protect. There is also the concern as to whether it will herald into the political geography called Delta state, a just or an unjust law.
As we are now, a just law is ‘a man-made code that squares with moral laws or the laws and uplifts human personalities, while an unjust law on the other hand is a code that is out of harmony with moral laws.’
Going by media reports, the proposed budget as presented among other provisions is made up of recurrent expenditure of N316.6 billion representing 44 per cent and capital expenditure of N397.9 billion which represents 56 per cent of the total budget.
For a better understanding of the piece, it is important at this stage to highlight briefly the meaning of Capital and recurrent expenditures.
From what financial analysts and investors are saying, capital expenditure (“CapEx” for short) is the payment with either cash or credit to purchase long-term physical or fixed assets used in a business’s operations. The expenditures are capitalized and considered an investment in expanding business. Simply put, capital expenditure or capital expense is the money an entity spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land among others.
Recurrent expenditure on its part consists of regular expenses that go into the running of an entity (organization, state or County). These include salaries and allowances paid to employees; operational costs such as travelling and accommodation, telephone, electricity and water bills as well as funding for costs incurred to cover compulsory obligations such as bank charges, interest on official debt, remuneration costs and other services. It tracks ongoing revenues and expenses that occur regularly, be they monthly, quarterly, semiannually, or annually. It is also known as the operational budget.
From the above explanation, one need not be an economist before internalizing the fact that the proposed budget is a manmade bill and therefore, could be likened to an edifice which can never be perfect but must require systematic structural advancement in line with human changing circumstances and the state’s socio-economic and political priorities, demands and developments.
Beginning with the positive provisions of the proposed budget, aside from its substantial compliance with the global notion which insists that for a society, state or nation to develop, its leadership must cede greater attention to capital expenditures than recurrent outflows, the state government’s decision to allocate recurrent expenditure of N316.6 billion representing 44 per cent and capital expenditure of N397.9 billion which represents 56 per cent of the total budget, amply portrays the proposed budget as a ‘basket of development expenditures’ which, all things being equal, will engineer pivotal role in the growth of the state.
Without going into concepts, terms and definitions, the budget as proposed in the opinion of this piece, highlighted the cost to be incurred by the state to create assets that will provide long-term public goods.
Supporting the above assertion is the declaration by the state Governor, during the budget presentation that the ‘state will embark on the construction of more critical road infrastructure in the 2024 fiscal year with the sum of N150 billion on road infrastructure for the Ministry of Works’.
For me, the above decision by the Governor and his government cannot be faulted or described as misguided priority is that infrastructure enables development and also provides the services that underpin the ability of people to be economically productive.
Viewed broadly, “good road infrastructure has a huge role in connecting populations to where the work is,” Infrastructure investments help stem economic losses arising from problems such as power outages or traffic congestion. The World Bank estimates that in Sub-Saharan Africa, closing the infrastructure quantity and quality gap relative to the world’s best performers could raise GDP growth per head by 2.6% per year.
Another exciting provision by the state’s proposed budget that will significantly assist in restoring the health and vitality of Deltans is allocations to other critical sectors. For example; the Health sector will gulp N18.65 billion; Agriculture, N7 billion and Urban Renewal, N7.5 billion among others.
Undoubtedly, the Governor’s resolve to advance urban-rural integration remains commendable. Also exemplary and impressive was his disclosure that the state earmarked N150 billion as personnel expenditure in anticipation of a federal government increase in salary in 2024 so that Delta can take the lead in making necessary salary adjustments.
However, on the other side of the ledger, this piece thinks that it will be safe to say that Deltans would be genuinely concerned about the budgetary allocation of N46.55 billion to the state’s education sector. Also troubling is the ceding of a paltry N1.7 billion to Youth Development, another essential sector by the state’s 2024 budget.
Separate from being meagre and coming at a time when the global leaders are standing up in support of UNESCO’s budgetary recommendation on education which calls on member states to fund their education sectors with 4 to 6% of GDP or 15 to 20% of public expenditure, allocation of N46.55 billion to an all-important sector like education, is in my view, a enough prove that the state is now faced with clear and present danger with potential to threaten the future manpower need/provision of the state.
We should equally be concerned, and ask ourselves how we got to this point of relegating to the background; of education and youth development, two key sectors that will shape the future of the state. Is the state unaware that these youths captured in these financially starved sectors will provide the manpower and future leadership needs of the state?
It will be highly rewarding and considered very logical, rational, practical, and beneficial to the real development of the state if the State House Assembly reverse this dangerous trend and give education and youth development their pride of place.
Just in case the state leadership is unaware, it is factually supported that there exists in the state shocking phenomenon of declining standards of physical infrastructures and the near-total collapse of basic facilities that ought to be functional in the government tertiary institution, secondary and primary schools in the state. How will the state tackle such a dangerous reality with the paltry budgetary allocation to the education sector?
Again, whereas there are a large number of youths in the state that are knowledge/education hungry and daily project vividly and openly their potential skills and talent that need to be nurtured in a conducive environment, tragically unique is the awareness that most of the students, particularly in the coastal part of the state are in school where ‘non-learning’ exists due to poor learning infrastructures and abysmal shortage of qualified teachers.
One point the state government must not fail to remember is that any developmental plan in the state without youth education delivered in a well-structured learning environment and fair fees will amount to a waste of time and effort.
To catalyze the process, the State Assembly review the education sector allocation in line with the provisions of the International Covenant on Economic, Social and Cultural Rights, of which Nigeria is a signatory, and among other provisions must recognize the right to education as a human right. This is necessary for enthroning sustainable development in the state, particularly as education is the bedrock of all developments.
Most importantly, the truth must be told to the effect that the present administration is bound to face confusion in their minds if the House allows the allocation to stand or do nothing to change the narrative.
Utomi is the Programme Coordinator (Media and Public Policy) for Social and Economic Justice Advocacy (SEJA), Lagos. He can be reached via [email protected]/08032725374
