Feature/OPED
Delta State Proposed Budget 2024 and Critical Concerns
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
By Luke Kyohere
The global payments landscape is undergoing a rapid transformation. New technologies coupled with the rising demand for seamless, secure, and efficient transactions has spurred on an exciting new era of innovation and growth. With 2025 fast approaching, here are important trends that will shape the future of payments:
1. The rise of real-time payments
Until recently, real-time payments have been used in Africa for cross-border mobile money payments, but less so for traditional payments. We are seeing companies like Mastercard investing in this area, as well as central banks in Africa putting focus on this.
2. Cashless payments will increase
In 2025, we will see the continued acceleration of cashless payments across Africa. B2B payments in particular will also increase. Digital payments began between individuals but are now becoming commonplace for larger corporate transactions.
3. Digital currency will hit mainstream
In the cryptocurrency space, we will see an increase in the use of stablecoins like United States Digital Currency (USDC) and Tether (USDT) which are linked to US dollars. These will come to replace traditional cryptocurrencies as their price point is more stable. This year, many countries will begin preparing for Central Bank Digital Currencies (CBDCs), government-backed digital currencies which use blockchain.
The increased uptake of digital currencies reflects the maturity of distributed ledger technology and improved API availability.
4. Increased government oversight
As adoption of digital currencies will increase, governments will also put more focus into monitoring these flows. In particular, this will centre on companies and banks rather than individuals. The goal of this will be to control and occasionally curb runaway foreign exchange (FX) rates.
5. Business leaders buy into AI technology
In 2025, we will see many business leaders buying into AI through respected providers relying on well-researched platforms and huge data sets. Most companies don’t have the budget to invest in their own research and development in AI, so many are now opting to ‘buy’ into the technology rather than ‘build’ it themselves. Moreover, many businesses are concerned about the risks associated with data ownership and accuracy so buying software is another way to avoid this risk.
6. Continued AI Adoption in Payments
In payments, the proliferation of AI will continue to improve user experience and increase security. To detect fraud, AI is used to track patterns and payment flows in real-time. If unusual activity is detected, the technology can be used to flag or even block payments which may be fraudulent.
When it comes to user experience, we will also see AI being used to improve the interface design of payment platforms. The technology will also increasingly be used for translation for international payment platforms.
7. Rise of Super Apps
To get more from their platforms, mobile network operators are building comprehensive service platforms, integrating multiple payment experiences into a single app. This reflects the shift of many users moving from text-based services to mobile apps. Rather than offering a single service, super apps are packing many other services into a single app. For example, apps which may have previously been used primarily for lending, now have options for saving and paying bills.
8. Business strategy shift
Recent major technological changes will force business leaders to focus on much shorter prediction and reaction cycles. Because the rate of change has been unprecedented in the past year, this will force decision-makers to adapt quickly, be decisive and nimble.
As the payments space evolves, businesses, banks, and governments must continually embrace innovation, collaboration, and prioritise customer needs. These efforts build a more inclusive, secure, and efficient payment system that supports local to global economic growth – enabling true financial inclusion across borders.
Luke Kyohere is the Group Chief Product and Innovation Officer at Onafriq
In a heartfelt statement released today, the Conference of Nigeria Political Parties (CNPP) has extended its warmest congratulations to Ghana’s President-Elect, emphasizing the importance of learning from Ghana’s recent electoral success as Nigeria gears up for its 2027 general elections.
In a statement signed by its Deputy National Publicity Secretary, Comrade James Ezema, the CNPP highlighted the need for Nigeria to reclaim its status as a leader in democratic governance in Africa.
“The recent victory of Ghana’s President-Elect is a testament to the maturity and resilience of Ghana’s democracy,” the CNPP stated. “As we celebrate this achievement, we must reflect on the lessons that Nigeria can learn from our West African neighbour.”
The CNPP’s message underscored the significance of free, fair, and credible elections, a standard that Ghana has set and one that Nigeria has previously achieved under former President Goodluck Jonathan in 2015. “It is high time for Nigeria to reclaim its position as a beacon of democracy in Africa,” the CNPP asserted, calling for a renewed commitment to the electoral process.
Central to CNPP’s message is the insistence that “the will of the people must be supreme in Nigeria’s electoral processes.” The umbrella body of all registered political parties and political associations in Nigeria CNPP emphasized the necessity of an electoral system that genuinely reflects the wishes of the Nigerian populace. “We must strive to create an environment where elections are free from manipulation, violence, and intimidation,” the CNPP urged, calling on the Independent National Electoral Commission (INEC) to take decisive action to ensure the integrity of the electoral process.
The CNPP also expressed concern over premature declarations regarding the 2027 elections, stating, “It is disheartening to note that some individuals are already announcing that there is no vacancy in Aso Rock in 2027. This kind of statement not only undermines the democratic principles that our nation holds dear but also distracts from the pressing need for the current administration to earn the trust of the electorate.”
The CNPP viewed the upcoming elections as a pivotal moment for Nigeria. “The 2027 general elections present a unique opportunity for Nigeria to reclaim its position as a leader in democratic governance in Africa,” it remarked. The body called on all stakeholders — including the executive, legislature, judiciary, the Independent National Electoral Commission (INEC), and civil society organisations — to collaborate in ensuring that elections are transparent, credible, and reflective of the will of the Nigerian people.
As the most populous African country prepares for the 2027 elections, the CNPP urged all Nigerians to remain vigilant and committed to democratic principles. “We must work together to ensure that our elections are free from violence, intimidation, and manipulation,” the statement stated, reaffirming the CNPP’s commitment to promoting a peaceful and credible electoral process.
In conclusion, the CNPP congratulated the President-Elect of Ghana and the Ghanaian people on their remarkable achievements.
“We look forward to learning from their experience and working together to strengthen democracy in our region,” the CNPP concluded.
By Kenechukwu Aguolu
The proposed tax reform, involving four tax bills introduced by the Federal Government, has received significant criticism. Notably, it was rejected by the Governors’ Forum but was still forwarded to the National Assembly. Unlike the various bold economic decisions made by this government, concessions will likely need to be made on these tax reforms, which involve legislative amendments and therefore cannot be imposed by the executive. This article highlights the purposes of taxation, the qualities of a good tax system, and some of the implications of the proposed tax reforms.
One of the major purposes of taxation is to generate revenue for the government to finance its activities. A good tax system should raise sufficient revenue for the government to fund its operations, and support economic and infrastructural development. For any country to achieve meaningful progress, its tax-to-GDP ratio should be at least 15%. Currently, Nigeria’s tax-to-GDP ratio is less than 11%. The proposed tax reforms aim to increase this ratio to 18% within the next three years.
A good tax system should also promote income redistribution and equality by implementing progressive tax policies. In line with this, the proposed tax reforms favour low-income earners. For example, individuals earning less than one million naira annually are exempted from personal income tax. Additionally, essential goods and services such as food, accommodation, and transportation, which constitute a significant portion of household consumption for low- and middle-income groups, are to be exempted from VAT.
In addition to equality, a good tax system should ensure equity and fairness, a key area of contention surrounding the proposed reforms. If implemented, the amendments to the Value Added Tax could lead to a significant reduction in the federal allocation for some states; impairing their ability to finance government operations and development projects. The VAT amendments should be holistically revisited to promote fairness and national unity.
The establishment of a single agency to collect government taxes, the Nigeria Revenue Service, could reduce loopholes that have previously resulted in revenue losses, provided proper controls are put in place. It is logically easier to monitor revenue collection by one agency than by multiple agencies. However, this is not a magical solution. With automation, revenue collection can be seamless whether it is managed by one agency or several, as long as monitoring and accountability measures are implemented effectively.
The proposed tax reforms by the Federal Government are well-intentioned. However, all concerns raised by Nigerians should be looked into, and concessions should be made where necessary. Policies are more effective when they are adapted to suit the unique characteristics of a nation, rather than adopted wholesale. A good tax system should aim to raise sufficient revenue, ensure equitable income distribution, and promote equality, equity, and fairness.
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