Dr. Chinyere Almona, the director-general of the Lagos Chamber of Commerce and Industry (LCCI), has pushed the federal government to urgently enhance its budget performance for capital expenditure in 2024.
Speaking in Lagos, Almona stated that the nation’s infrastructure sector faces grave consequences due to the capital expenditures’ poor performance in comparison to recurring expenditures. The DG called the state of affairs and stated that immediate action is required.
She continued by saying that the planned N27.5 trillion ($33.4 billion) budget for 2024 is the largest in the history of the nation and represents a 21.4% increase over the N22.65 trillion budget for 2023.
The expenditure policy’s strategic aim of addressing macroeconomic stability, investment environment optimization, human capital development, poverty reduction, and social security is praiseworthy, she added.
“An examination of the proposed budget showed that an exchange rate of N750/$ was chosen, a daily production estimate of 1.78 million barrels per day, and an oil price benchmark of $77.96 per barrel were all included. An additional breakdown shows that capital expenditure is expected to be N8.75 trillion, debt service is projected to be N8.25 trillion (N1.94 trillion, or 30.7 percent more than the 2023 budget), and non-recurrent
expenditure is N9.92 trillion, which is N1.59 trillion or 19.1% higher than the 2023 budget.”
The DG pointed out that the assumptions are quite cautious, especially about oil prices and currency rates.
“However, we must acknowledge that the oil sector's ongoing underinvestment, vandalism, oil theft, and growing production costs continue to be major concerns for daily oil production.”
“The chamber also points out that the proposed budget for Nigeria is 12.2% of GDP, which is incredibly low when compared to other African countries like South Africa, which has a government expenditure to GDP ratio of 32.5%, Egypt (24.7%), Kenya (23%), and Ghana (27.1%). In light of its renewed hope program, the government needs to address this critical issue,” the speaker stated.
Almona urged the federal government to focus on investing more in transport infrastructure in order to mitigate the high cost of fuel and address the numerous logistical issues that have impacted the movement of goods across the nation, going beyond the numbers and policy statements included in the 2024 Appropriations Bill.
“Looking beyond oil earnings, the government has to increase non-oil exports’ foreign exchange (FX) earnings and inspire trust in investors. To lessen the bottlenecks in our export logistics and procedures, we must spend more in export infrastructure through automation and the execution of crucial port improvements.”
“Also, in addressing the most significant components of human capital development, we urge governments at all levels to be committed to significantly improving budget implementation in strategic sectors of the economy, including agriculture, education, health, infrastructure, and security,” she said.
