Abia State Governor Alex Otti has made an audacious move by presenting a robust budget of N567,240,095,972 for the year 2024. Dodoh Okafor, the Senior Special Assistant to the governor on Public Communication, confirmed this significant budget presentation to the State House of Assembly.
The breakdown of the “Budget of New Beginning” underscores a striking focus on infrastructure and development, setting Abia apart as the only state in Nigeria with such a significant emphasis on these areas within its budget structure.
“We are determined to start afresh, construct roads, eradicate insecurity, and make our state conducive for investment both local and foreign to flow into the economy. This requires a lot of thinking, and doing things differently to ensure there is a clear departure from the past,” Otti said.
Capital Expenditure took the lion’s share, claiming 84% of the total budget, while 16% was allocated to Recurrent Expenditure. This allocation pattern signifies a considerable commitment to boosting infrastructure and growth in the state. Notably, 20% was allocated to education and 15% to healthcare, underlining the government’s dedication to these critical sectors.
Governor Otti’s budget estimate breakdown is as follows:
Capital Expenditure: N476,011,317,893.00: The bulk of this allocation will be directed towards road infrastructure, the construction of new schools, and equipping hospitals, emphasizing a clear vision for tangible development projects.
Recurrent Expenditure: N91,228,778,070.01: This allocation addresses the increase in the state’s salary package, reflecting the governor’s commitment to aligning the state’s wage structure with current economic realities.
Budget Financing and Deficit Handling:
Expected Revenue: N166,077,717,058: This includes internally generated revenue (IGR), earnings from the Federation Accounts Allocation Committee (FAAC), grants from multilateral and donor agencies, and other revenue sources.
Financing the Deficit: The deficit of N401,162,378,914 will be covered by new borrowings estimated at N385,271,027,214. Of this amount, half will be sourced externally, with the remaining acquired domestically.
To assuage concerns about the prudent use of borrowed funds, Dodoh Okafor outlined Otti’s strict guidelines:
Capital-focused Borrowing: Funds will be exclusively channeled towards capital projects, avoiding any borrowing for recurrent spending.
Transparency and Accountability: Citizens will have oversight over fund utilization and project execution in their communities.
Responsible Borrowing: Loans will only be acquired at concessional rates, dedicated solely to projects directly impacting the state’s economic and social development.
While concerns have been raised about the state’s ability to secure a substantial loan to cover the deficit, financial analysts are optimistic about the budget’s potential to attract adequate funding.
Notably, the unprecedented 84% allocation to Capital Expenditure, particularly in road construction, has been praised as a stimulant for local job creation, value addition, and heightened economic productivity, signaling a positive trajectory for Abia State.
“This is the first budget I have seen in Nigeria with an 84% allocation to Capital Expenditure with a specific focus on road construction.
“This means local jobs, value addition, means stimulative consumption. Hopefully, this maximizes productivity in the state and then drives wealth creation,” Financial analyst, Kalu Aja said.
The budget’s allocation and strategic focus on infrastructure have sparked optimism as well as discussions about Abia State’s potential to attract the necessary funding for sustainable growth.
