As we stand at the crossroads of Nigeria’s economic destiny, the anticipation surrounding the formulation of the 2024 national budget is palpable. The country faces formidable challenges, both from within and without, that threaten the stability of our fragile economic structures. To ensure a brighter future, we must shun the flawed practices of the past and lay the foundation for an inclusive and purpose-driven budget.
Recent revelations from the government’s Medium Term Expenditure Framework and Fiscal Strategy Paper 2024-2026 serve as a sobering reminder of the hurdles we face. High recurrent and personnel obligations are set against the backdrop of modest revenue expectations. It is a landscape that demands extraordinary diligence and innovative solutions.
Traditionally, a national budget is a roadmap for government revenues and expenditures, but in the modern era, it has become the primary instrument for achieving national economic goals. Regrettably, Nigeria’s recent budgets have drifted from this purpose, serving as a mere mechanism to authorize spending, rather than as a vehicle for fostering development, infrastructure, employment, and social services.
For President Bola Tinubu, the challenges are multifaceted. The economy is in distress, with poverty, hunger, soaring energy prices, record unemployment, and inflation casting a long shadow over the nation. Labor unions are demanding attention, and insecurity is a persistent threat. Externally, the global oil market remains turbulent, casting doubts on the feasibility of our budget’s oil price and production projections.
Yet, Tinubu’s responsibilities extend beyond addressing these challenges. It is essential that his administration breaks free from the habit of “envelope” budgeting, characterized by the recycling of figures from previous budgets. This practice stifles planning and hinders meaningful service delivery, enabling corruption and misallocation of resources.
The MTEF/FSP document has revealed the dire need for reform. In 2024, substantial constraints, such as debt servicing, personnel costs, and pensions, will absorb a significant portion of the planned N26.01 trillion budget, leaving minimal funds for capital investment. The burgeoning debt servicing provision, driven by the ‘Ways and Means’ borrowing, is a growing concern.
While the government spent an alarming 102 percent of its revenue in 2023 servicing debts and addressing personnel costs, the public debt, already at N87.38 trillion in June, is projected to soar beyond N118.37 trillion in the next three years. The government’s strategy for the three years leading up to 2026 is to borrow N26.42 trillion while allocating N29.92 trillion to service debts.
Although the IMF maintains its GDP growth forecast for Nigeria at 3.1 percent in 2024, the recent downward revision of the 2023 projection from 3.3 percent to 2.9 percent underscores the lingering economic challenges.
Within our nation, optimists and pessimists are engaged in a tug of war. Some believe that our economy will rebound despite the daunting exchange rate of over one thousand naira (#1000) to a US dollar. However, the pessimists argue that a sustainable recovery hinges on curbing the rising cost of governance, which has become unsustainable.
Recent reports have shed light on extravagant expenditures, raising eyebrows and fueling public discontent. The alleged $422,820 spent during the United Nations General Assembly (UNGA) hotel reservations by President Tinubu and his aides is a stark reminder of the unchecked extravagance at the highest levels. Furthermore, the approval of #130 million worth of 2023 brand SUVs for each of the 360 members of the House of Representatives exemplifies insensitivity in a time of national hardship.
The government proclaimed that it would bring prosperity and eradicate hunger, but the reality paints a different picture. Hunger plagues the land, and citizens are suffering while the leaders live in opulence. The promise to fight corruption and improve governance appears to have given way to a rubber-stamp congress, with little to show for eight years in power.
As the economy falters, the time is now for President Tinubu to chart a clear path for the nation. The government is marred by court cases, frequent removals of lawmakers, and lavish appointments, creating a national embarrassment. Palliatives alone cannot address the hunger crisis. Sustainable programs that foster opportunities for all segments of society are the need of the hour. With the ban on 43 previously prohibited items lifted, we must see businesses accessing foreign exchange for essential raw materials, spare parts, and machinery, particularly for small and medium-sized enterprises (SMEs).
The era of redistributing wealth without promoting growth may no longer be tenable. It is essential for the National Assembly to act judiciously and desist from self-enrichment at the expense of the masses. Strengthening institutions is crucial for the nation’s progress, and the government must adopt a radical approach to ensure transparent and accountable practices.
The eyes of the nation are on President Tinubu and his administration. Inaction on the rising cost of governance and excessive spending by the 9th Assembly would be a disservice to Nigeria. It is time to depart from the old order and reshape our teetering economy under the leadership of President Tinubu. The nation’s prosperity hangs in the balance, and we must embrace this opportunity to steer Nigeria toward a brighter future.
