presentation of the 2024 budget proposal to the National Assembly, financial and economic experts have continued to express views on the proposed budget.
The growing recurrent budget, personnel costs, overhead expenses and debt service, they also said, remain major causes for concern, thus the need to drastically reduce the cost of governance. “Inflation rate assumption of 21 per cent also appears ambitious. High recurrent expenditure typically poses a risk to capital budget and the capacity to fund infrastructure which is very critical for economic diversification and transformation. However, the outlook for revenue seems positive given the current reforms. Hopefully, this will help to tame the trend of increasing budget deficit,” Yusuf said.
On debt service, Omojuwa argued that the N8.25 trillion proposed budgetary allocation means the amount allocated for debt servicing is higher than the allocation for CAPEX. The increase in debt servicing, he further explained, is as a result of securitisation of the Ways and Means of N22.7trillion of CBN.
Omojuwa warns that prudence in government spending is also very crucial for the proposed budget to be successful. “We should try as much as possible to reduce wastage in government, especially in the cost of governance. More emphasis should be placed on infrastructure and CAPEX. There should be proper value for money audit on Federal Government’s projects. For instance, the cost of constructing one kilometre of road in Nigeria is one of the highest in Africa.
Furthermore, the CBN exchange rate as at October 26, 2023 is now N799.24 / dollar as against N435.57 per dollar proposed following the unification of the dual exchange rates even though in the parallel market is almost N1,250/US$. The daily crude oil production average of 1.18mbpd in August 2023 did not match the 1.69mbpd projected in the budget. Although the crude oil price has somehow been favourable as it averaged $89.30/pb in August 2023 as against proposed $70/pb.
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