Governor Bala Muhammad’s 2024 Budget: More Holes Than Swiss Cheese, By Usman Yanmaza

As an altruistic, self centred, judgelike and discerning minded columnist, i am not one of the writers that shrink under the political influence, even though for the whole of my life since my early age i so much like politics. Coincidentally, up to this particular moment, i am political unaffiliated to any party, i bereft from worshiping any party because i see little ideological distinct between the duos of major political parties. Political parties are mere a stepladder and bumbershoots being use by politicians to contests or wins an election, while i am going with politicians (at individual levels) i will not necessarily go with his party.

In many times when i write to commend certain politician/gov’t, their reverence are applauding me while the opposing sides stop talking to me, likewise when i criticise certain politician/gov’t, the opposing camps are thrilling at me while the supporting sides are not seeing good in me. Anyway, i am not writing for public applause, so thank me not and grudge not with me, i don’t care as long as i knew i am telling the truth. You can hate me spewing the truth.

When i firstly came to the term that Bauchi state Governor, Sen Bala Muhammad presented the budget estimate of grossly over N300 Billion to the floor of Bauchi state House of Assembly, i confined and refrained myself from uttering word untill i see the full budget analysis. I was eagerly enthusiastic to grab the full context of the presentation in order to catch it content. But to peak intense of my much flabbergasted surprise, the first thing i managed to came across was overating capital expenditure above the recurrent expenditure, the former where earmarked with over N178 Billion which represents nominal percentage of (59.6%) while in the case of the latter, the much needed recurrent expenditure was deliberately earmarked with sum of over N121 Billion which represents (40.4%) of the whole budget.

To be fair to Governor Bala, in most advanced economies, absolutely, a satisfy and reasonable portion of the whole proposal is being earmarked to capital expenditure for it generic and direct impact upon the citizens in both urban and rural settlings. Onifade (2020) using ARDL model and 1981-2017 Nigerian data, discovered that recurrent expenditure “negatively impacts” on national output whereas capital expenditure “significantly and positively” affects GDP.

Well captured in my skull i can emphasis the recurrent expenditure as – all payments other than for capital assets, including on wages and salaries, employer contributions, interest payments, subsidies and transfers. While simply put capital expenditure as – payments for acquisition of fixed capital assets, stock, land or intangible assets. A good example for such would be building of schools, hospitals or roads. Luckily however, it is paramount to note that much donors funded “capital” expenditure which are simply damning and referring to projects.

For sooth and undoubtedly, I don’t know which paraphrase i will use to repeat myself that in many cases as it unfolds, most of the budgets being prepare by the Nigeria gov’ts in both national and subnational levels aren’t up to standard, achieving nothing if not lavish and unnecessary spendings, some do presents the budget for soft targets in order to quench their personal and primordial interests. Albeit we are usually copying from most of the developed countries and states (i.e UK for the country while Texas or Los Angeles for the states), but we are usually ending mostly at the loosing barriers, concluding with poor budget performance, unforgivable and humungous deficits while the expected revenue from oil, FAAC and forex are usually crashing in the global markets. None so good budget standard attainment recording in many quotas and stratas of Bauchi state.

Governor Bala Muhammad as the current and serving Governor of my state, thus, prompted my intention to analytically studied and examine the sequence of his budget estimates in order to forecast if the budgets will achieve something different or not. My analysis is bereft of any partisan line, i am not in anyway a registered party member of any political party.

Governor Bala Muhammad budget analysis ;

The proposed outlay of 2024 state budget presented last month by Governor Bala Muhammad in the State House of Assembly have encompassed so many trends for impressive hope and disheartening gibberishes. It’s not a new normal tradition for him since he presented same of it kinds in the last 4 years he has been in power with both condemnable and commendable fingers.

I wasn’t highlighted enough to understand the point Governor made while presenting the budget untill I heard that he specifically mentioned that they mapped out a comprehensive program they intend to roll out on “REVIEW OF THE MACRO ECONOMY ENVIRONMENT” since the GDP remains sluggish due to slower growth of consumer demand. At this particular point, i can salute the budget for trying to handle such cardinal interrelated objectives. Ideally, a macro environment has to do with the set of conditions that exist in the economy as a “whole”, rather than in a “particular” sector. To sum it up the macro environment includes trend performance to GDP, inflation, employment, spending, and monetary and fiscal policy.

Macroeconomic factors if reviewed as promised by the Governor, will tends to impact wide swath of populations, rather than just a few selected individuals, that is why it’s unlike microeconomic whose factors are giving heed to some few set of people and to some extent it’s controllable, the macroeconomics are uncontrollable. Examples of macroeconomic factors include economic outputs, unemployment rates, and inflation. These indicators of economic performance are closely monitored by governments, businesses and consumers alike.

Ofcourse giving heed to large population of people living in the state (courtesy of capital expenditure) rather than cost on running gov’t, payments and civil servants (recurrent expenditure) whom occupied some little or few figures out of the population are of paramount important. And the fact that in a developing state typically like Bauchi with so much infrastructural deficits, it’s paramount if effort will be geared towards changing the narrative. One will wish to visit some neighbor states in the country and see things for himself, Bauchi state doesn’t have standard infrastructures to wag it tongue, plus the fact that in the recently organized conference facilitated by UN investment to developing countries, they urged nation states to ensure fast development on infrastructures, the infrastructures are among the social amenities and also fast quenching investors. States like Kano, Lagos, Ondo and Kaduna are of high premium where investors finds the land of opportunities, the infrastructures are so apt thus they (investors) would have the way to sleep with their two eyes close.

Expectedly, the maximum and ultimate figure of the proposed budget for 2024 fiscal year in the state is about N300 Billion with highest allocation on capital expenditure over the recurrent expenditure some are saying it will clearly entrench the bloat of leakages through so-called projects, but we reserve this to see how the gov’t would walks it talks. We won’t hesitate to criticise gov’t in any case we deemed necessary.

Unlike President Tinubu and other state’s budgets where recurrent expenditures are at the priority top of capital expenditure but that of Bauchi state isn’t like that, but to some economic arguments, placing capital expenditure above recurrent expenditure is needless more especially at this era of incurable poverty in the land, in an inflationary economy like ours, limited resources placed for running the gov’t workers, administrations, transfers, economic and social services will undoubtedly not reduced the level of penury and depression our people find themselves nowadays.

Governor Bala Muhammad kept aside N121 Billion on recurrent expenditure which is representing 40.4% of the budget for running administrational works and other matters as related to it, out of which i didn’t see the full breakdown and sum kept for salaries and pensions. Even though FG is planning to start minimum wage latest by April 2024 but from the look of things Bauchi state will be left behind since there is no any provision for such, No gainsaying that Bauchi state was among the first states in the federation that approved last minimum wage of N30k, it’s indeed commendable.

Ofcourse, the government is somehow broke and has been funding it activities with borrowings both domestic and external. But the variables like inflation which as at August 2023 stands at percentage of 25.8% the highest in 17 years, while poverty, illiteracy and deprivation in the state fuelled by a crashing naira, poor internal revenue generation and stoppage of petrol subsidies, will promptly double the root cause of poverty our people find themselves. Without national stabilisation of naira, good internal revenue generation, reducing unemployment rate in the state, mitigating govt leakages, drastic reduction on cost of running gov’t, crushing inflation and stoppage of unneccessary spendings, hardship and poverty are still lies ahead of Bauchi state people take my words to the bank.

Critically, recurrent expenditure is still in any case inadequate with the figures earmarked if one will take a look at the current poor workforce in the state which resulted to high premium of unemployed youths in state (among the highest in the country) and the pension in the state is still not settle, ever see how a pensioner that is owing N4 million is ending with N100k? In which banana republic does that ever happened? While some humungous amounts are still owing pensioners but the state govt is planning to built flyover on the expense of “loan” to the tune of N100 Billion? The project with no return on investment? Is this a rationality or irrationality? Borrowing and funding a project that has no payback provision? If critical eyes will be preserve upon the Bauchi state budget, one will not be unmindful that the state govt will relatively depend on federal allocation, internal revenue and loans. Human capital should be place as per priority of any sensible gov’t not otherwise.

With food inflation that has jumped to over 29.3%, double increase on petrol and diesel prices, unemployment rate, poor educational system why does Governor Bala Muhammad didn’t take concerted effort to overcome all those problems which will directly helps people and the economy as a whole, but instead on rush to fund capital projects in stomachs that are empty, thirsty and in much need to survive?

Does Governor Bala Muhammad ever remembering that none so impressive achievement have been recorded since his declaration of emergency on education sector in the state. Gov’t should put more extra effort beyond mere – mouth calling to create a new climes for the oasis of learning in this our large desert of ignorance, the state is still maintaining a vague record of out of school children in the country, poor rated in infant and maternal mortalities, human capital whom use to be the center stage upon development and transformation of Bauchi state through the provision of required human resources and skills for economic development but that is no longer the priority to Bauchi state gov’t.

I missed to grab the full breakdown of the budget proposal, i didn’t see the full breakdown of sectoral allocations, likewise don’t know the percentage kept aside for front line items like education, health, agric etc, so also how much does the budget kept for debt servicing? Does debt service be incure from the expected revenue? what are the debt service-to-revenue ratio? Does government foresee any alternative other than blindly borrowing to fund the budget? How much does economy will grow as per paying debt obligations?.

What about the deficit, is it lower or higher than that of 2023? What of it figure? Is there any impact on state’s GDP? Does the deficit violates the Fiscal Responsibility Act, which prescribes a maximum of 3.0%?.

Among those things which will be very difficult to achieve by the gov’t is building the budget on foundational expectation of 1.78 million barrel per day, it’s heartily very difficult. Nigeria gov’t projected $77.96 per 1.78 millions barrels a day while in the FOREX market they projected N750/$ in the exchange rate market. While we are wishing for the best, but the expectations are highly unbearable considering on how things are going.

Among those things I don’t wish to see are lavishly but extravagant fronts of wasting public purse especially at the wake of this poverty ridden economy on serving personal gains. But sure thing, the match of capital expenditure above the recurrent spending will surely breeds development in the long run in another perspective since in most developed economies, to reboot the economy, emphasis should be shift to infrastructure development.

My analysis is bereft of any partisan line, i am politically neutral and partisan – unbiased, non-aligned indeed. Thus, free from any party politics, i am not in anyway a registered member of any political party. I am maintaining a very good rapports with personalities across all the parties.

Usman Yanmaza writes from Bauchi.