The budget is an extremely important law and policy instrument of governance. Indeed, some scholars describe the budget as the second most powerful instrument of governance after the Constitution.  The budget is contextualised within the law, policy and budget continuum. It provides the avenue for governments at all levels to provide resources for the realisation of the goals and objectives of high-level national and state policies. This discourse reviews the available 2024 federal budget proposals to analyse what hopes it portends for Nigerian citizens and the economy.

The overall expenditure is in the sum of N27.5tn. At the official exchange rate of N750 to $1, this is about $36.6bn. When this sum is divided over 220 million Nigerians, it amounts to N125,000 or $166 per capita. This is peanut compared to the development needs of the country. It does not position Nigeria on the same pedestal with her African peers of Egypt, South Africa and Algeria with lower populations, but have overall budgets of about $100bn. Yes, our overall budget may be more when you add state and local government budgets. At most, adding federal and state budgets to the federal proposal may attempt, but will not double the federal budget. This will still be less than the votes of our peers.

The growth figure is projected at 3.76 percent when the president is proposing a trillion-dollar GDP in four to eight years. There is a mismatch between the big picture of a $1tn economy and the growth proposal. The economy needs to grow by not less than between seven percent and 10 percent consistently to lift the binding constraints on growth as well as lift millions of Nigerians out of poverty. Indeed, the economy needs to grow at not less than 20 percent per annum to achieve this $1trn GDP feat. Currently, with the devalued currency, our GDP rating has nosedived and needs to be shored up.

In the N27.5tn expenditure proposal, N1.376tn (inclusive of N982.9bn capital expenditure) is for statutory transfers, N8.490tn is for debt service, N9.918tn is for recurrent non-debt expenditure while N7.717tn is for contribution to the Development Fund for capital expenditure. The proposals show that statutory expenditure is 4.9 percent of overall expenditure, debt service is 30.8 percent, recurrent non-debt is 36 percent and capital expenditure will be 28 percent of the expenditure. Salaries and overheads in recurrent non-debt expenditure take the highest share followed by debt service, capital expenditure and statutory transfers.

But this projection does not tell the whole story which will emerge from the actual expenditure during budget implementation. It distorts the actual picture as the forecasts are not cast in stone and have no relevance to the budget in practice. The fuller story is that statutory expenditure is a first-line charge (to the National Assembly, INEC, UBEC, National Judicial Council, etc.) which must be fully disbursed; salaries are also fully disbursed so that workers and officials of the government can continue to work while overheads are needed to ensure continuity of governance operations.

Debts must be paid as a priority so that our fiscal rating, which is already at a very low point, will not totally collapse. There is a very high negative price for sovereign debt default. For instance, out of an actual N12.5tn expenditure by the Federal Government as of September 30, 2023, the sum of N5.7tn has been spent on debt service. This is 44.8 percent of actual expenditure at the end of the third quarter. It is only after these aforementioned expenses are settled that implementing capital projects can arise. This point is validated by the 2023 federal capital budget expenditure report which the Minister for Budget and National Planning put at 25 percent as of the end of September 2023. Furthermore, if the expected revenue is not fully realised, the cuts will be mainly from the capital budget provisions, excluding the projects that are funded from dedicated borrowed funds.

The idea of capital projects raises citizens’ expectations of projects that can touch lives or improve livelihoods, ease business practices and positively grow the economy. However, capital expenditure is divided into two vis, administrative and developmental capital. The administrative capital is about projects related to facilitating governance in terms of directly being of benefit to the officials and the public service such as their cars, buildings, computers and accessories, etc. The justification is that they need these projects to be able to effectively serve the people. The second is developmental capital which is about the roads, bridges, schools, airports, hospitals, etc., that directly benefit the people. The implementation experience shows that administrative capital enjoys priority over developmental capital since the officials first take care of their comfort and working environment before remembering the citizens. When the full details of the budget are released, Nigerians will know the division between administrative and capital expenditure.

The votes for five critical sectors vis, education, health, security, infrastructure and social development, amount to N8.614tn. Comparing these proposals (some of which may not be released) with the debt service of N8.490tn (which must be fully released) paints the picture of the consequences of the reckless borrowing by previous administrations, especially the Muhammadu Buhari administration which got Nigeria into this debt hole.

The votes for the presidency are baffling. For recurrent expenditure, the presidency will be spending N85.413bn while it proposes to spend N60.535bn for capital expenditure, bringing the total to N145.948bn. This is an unprecedented vote in budgeting for the presidency, coming after the votes for cars, yacht, houses and other frivolities in the 2023 Supplementary Appropriation. It is difficult to fathom what exactly the presidency will be doing with such a huge vote, coming after other service-wide votes which may be at his discretion to manage.

There is a critical and worrying development. The details of the budget are not yet in the public domain – they are not available on the website of the Budget Office of the Federation. Therefore, the first thing is to demand that like in previous years, the detailed budget should be made available immediately. The budget is usually uploaded on the website of the Budget Office of the Federation immediately after the president presents the same to the National Assembly even before the budget breakdown by the responsible minister.

A dispassionate review of the broad expenditure proposals shows that it is a continuation of the old norm; a proposal to service the bureaucracy, especially high-level officials of state. Is there hope that the National Assembly will be dispassionate to right the wrongs proposed by the executive. This will be a very tall order considering that federal legislators were singing the campaign song of the president, standing on his mandate when he came to present the budget. Instead of the national anthem, they stood on the mandate of the president. The ninth National Assembly was called a rubber-stamp legislature. It is up to the 10th National Assembly to give itself a name. As of now, they have performed below the rubber-stamp status.