States declare austerity budgets

*To spend N9.6 trillion compared to 2014’s N12 trillion

WORRIED by the dwindling economic fortunes of the country, the Federal and 31 state governments of the country have proposed what has been termed as ‘austere’ budgets to contend with the challenges.

According to Vanguard investigations, the 31 states and the Federal Government, barring supplementary appropriations, will spend N9.626 trillion in 2015 as against N12.188 trillion spent in 2014 (see table).

States that are yet to present their 2015 budget proposals are Ondo, Abia, Rivers, Yobe, Jigawa and the Federal Capital Territory, Abuja.

If the remaining states and FCT were to spend exactly what they spent last year, their total expenditure will be N10.6 trillion, still a far cry from the N12.188 trillion spent last year.

The prevailing free fall of crude oil price, refusal of US (Nigeria’s major oil importer) to patronise the country and discovery of oil by many countries and alternative energy sources are already hurting Nigeria’s finances. This accounts for why many states owe their workers two to six-month salary arrears.

Recently, the term ‘austerity measures’ crept back into Nigeria’s lexicon on account of the brewing hardship. The last time austerity measures dominated the air waves was in the early 80s when Nigeria’s Naira lost value in quantum leaps against the US Dollar and other leading world currencies.

To worsen the matter, most of the governments at all levels apart from spending less than what they spent last year, have also allocated lower sums to capital expenditure. Collectively, only N3.342 trillion (47.63 per cent) is allocated to capital expenditure (provision of infrastructure and amenities among others), while N5.041 trillion or 52.37 per cent is to be spent on recurrent expenditure (salaries, emoluments of public servants and political office holders, running costs, among others).

The worst culprit is the Federal Government, which allocated N634 billion (14.55 per cent) of its N4.358 trillion proposed budget to capital expenditure. The central government spent N4.962 trillion last year.

Among the states, Imo is worse off. Governor Rochas Okorocha proposed N141.22 billion and allocated N119.70 billion (84.43 per cent) to recurrent expenditure. Capital projects got a miserly N21.5 billion (15.57 per cent).

source:vanguard