The Governor of Abia State, Alexx Otti has presented a budget of ₦567,240,095,972.00 for the 2024 fiscal year. Of the proposed figure, the Abia State government estimated a revenue of ₦166.07bn, and a deficit of ₦401.16bn representing over 70% of the budget number.
84 percent of the ₦567.24bn budget is targeted at capital project expenditure, while 16 percent is to be spent on recurrent expenditure.
Alex Otti presented the Appropriation Bill christened “Budget of New Beginning” to the Abia State House of Assembly in Umuahia on Tuesday.
The Governor told the Representatives that the budget was deliberately structured the key items in the budget to reflect the priorities of the state.
He also announced a wage rise for Abia workers, saying it has been captured in the 2024 budget estimate.
In his address, while presenting the budget before the lawmakers, Governor Alex Otti said his administration’s ambitions had been constrained by limited resources but explained that it has been innovative enough in dealing with all the challenges.
The Governor said that the 2024 budget will consolidate the modest gains of the 2023 budget cycle, especially during the last six months he has been in charge.
“Today’s budget presentation is, therefore, significant in many ways; first, it is the first full-year budget by our government,” the Governor Said.
Otti said that the budget he presented, when passed into appropriation, would target more road infrastructure, human capital development, healthcare and human services, social support initiatives, digitization of services, and education, among others.
On the budget figure, Otti said, “The above figure, in nominal terms, represents more than N400 billion rise from the 2023 estimate of N160.5 billion although when adjusted for inflation and fall in the value of the naira, the reality becomes starkly different.”
The Governor added that over 84% of the budget would be spent on capital expenditure while 16% was appropriated for recurrent expenditure.
He said: ”The key distinction in the 2024 budget estimate, however, is in the direction of spending. While the 2023 projection allocated 53% of the entire budget for capital expenditure, our target in the 2024 fiscal year is to spend 84% of the total expenditure on capital projects and commit 16% to recurrent expenditure, as against 47% in the 2023 estimates.”
“We target 20% and 15% of the aggregate budget spending on education and health respectively”, Otti added.
The budget has an estimated revenue projection of N166 billion, with a plan to source the deficit from borrowings.
“Of the proposed figure, government’s estimated total revenue is N166,077,717,058 including earnings from our IGR channels, Federation Accounts Allocation Committee (FAAC), grants from multilateral organisations and income from other revenue sources that will be available to the state government over the course of the accounting year.
“We plan to finance the deficit of N401, 162, 378, 914 partly by new borrowings estimated at N385, 271, 027, 214. 50% of this borrowing will be sourced externally, whilst the balance will be procured domestically.”
The Governor promised to judiciously use every loan obtained by the Government. He insisted that the loans must be for capital projects alone.
“It must at this point be stated that all borrowing in the 2024 fiscal year would be committed strictly to capital development projects with direct impact on the economy of the state, especially roads, schools and medical facilities.
“The projection is that the impact of these projects on the general economy in the medium to long term would generate the sufficient returns that would enable the state meet her obligation to the creditors smoothly and ultimately pay off the loans in due course.
“The assurance I want to give Mr Speaker, Honourable members and to every Abian is that under my watch, not a dime shall be borrowed to finance recurrent expenditure. All borrowing will be negotiated on terms that are favourable to the state,” Alex Otti said.
Gov. Otti stressed the need to rebuild the failing infrastructure of the state for economic recovery. He explained that this made it necessary for the state to borrow.
“Rebuilding the state’s public infrastructure requires the sort of targeted financing we cannot immediately access within the state so there is the need to borrow to fund the projects that would kick-start the economy and make us competitive on a global scale.”
“In the 2024 fiscal year, the state proposes to commit 44.76% of the budget on the economic sector with the larger chunk of the resources going into works, (16.97%), land and housing (9.9%), agriculture (5.12%), and finance, (5.23%). “
Gov. Otti said that the state would witness massive infrastructural development in 2024 as already captured in the budget estimate.
“We shall be committing major resources in the 2024 financial year to the reconstruction and rehabilitation of some of the most important roads along the major economic corridors of the state.
“The budget has provided for completion of some of the projects we started in 2023 including Port Harcourt Road Aba, Ossah Road, Umuahia-Uzuakoli-Abariba-Ohafia Road, Ozuabam-Ndi Okereke- Arochukwu Road, the dualisation of Umuikaa-Umuene-Omoba Road, Dualisation of Owerrinta-Umuikaa Road, Nunya-Eluama-Isuikwuato Road, Onuimo-Abia Tower Road amongst others as well as the commencement of new road projects in parts of the state.”
“More importantly, the citizens and other stakeholders would have the opportunity to monitor how the funds are being spent and the impact of the projects on their communities, from inception to completion. This is very important to guarantee transparency and as a listening government, your inputs would always be very important in our decision making process,” the Governor said, as he promised to be transparent in the implementation of the budget estimate.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur