Monday, April 15, 2024
spot_imgspot_imgspot_imgspot_img
HomeNewsCOMMUNIQUE ISSUED BY THE COALITION OF ASSOCIATIONS FOR LEADERSHIP, PEACE, EMPOWERMENT AND...

COMMUNIQUE ISSUED BY THE COALITION OF ASSOCIATIONS FOR LEADERSHIP, PEACE, EMPOWERMENT AND DEVELOPMENT (CALPED) ON THE KADUNA STATE 2024 DRAFT BUDGET

COMMUNIQUE ISSUED BY THE COALITION OF ASSOCIATIONS FOR LEADERSHIP, PEACE, EMPOWERMENT AND DEVELOPMENT (CALPED) ON THE KADUNA STATE 2024 DRAFT BUDGET

Preamble

As you are all aware, the Kaduna State government through the Planning and Budget Commission has made public the 2024 draft budget and organized a town-hall meeting to generate citizens feedback and inputs. Expectations are high based on the social contract as captured in the SUSTAIN blueprint of the current administration of Governor Uba Sani. This is the administration’s first budget and therefore it deserves a closer look to ensure policy-budget linkage, budget realism and allocation to strategic priorities of the State.

Observations

As a result, CALPED has analyzed the budget and generated key findings made up of observations and recommendations.
We hereby observe as follows:

1. The 2024 total draft budget is N35.3 billion (8.35%) higher than the projected MTEF recommended budget size.

2. The 2024 draft budget increased by N81 billion (21.7%) from the 2023 budget. It is observed that as of the third quarter of 2023, the budget performance is less than 50%.

3. While the 2024 draft budget has increased in naira terms, when converted in dollars it is lower than that of the 2023 budget. The 2023 budget is $867,476,128.93 ($1 to N435), while the draft budget is $609,188,328 ($1 to N750).

4. The draft budget of N458.3 billion is 13.4% and 13.6% of State’s GDP of N3.4 trillion (at current market price) and N3.3 trillion (at current basic price) respectively.

5. The 2024 budget deficit is about 37.4, with the State opting for loans and grants of N171.0 billion to cover the deficit; it is also 59.9% of the total revenue.

6. The recurrent budget increased by 2.9% in 2024 from the 2023 approved budget. The recurrent budget is lower at 30.43% compared to 35.99% in 2023 as a percentage of the total budget.

7. There was also a 32.2% increase in capital expenditure allocation from 2023. The percentage of total capital expenditure versus total budget increased to 69.57% compared to the 64.01% in 2023. However, 2023 third quarter performance was disturbingly low at 33.4%.

8. There is a huge increase of 33.1% in allocation for personnel cost from 2023. As at the third quarter of 2023, there was 69.1% performance. Overhead cost decreased by 10.1% compared to the allocation for 2023, which had a Q3 performance of 30.3%. Noticeably, public debt charges decreased by 28.3%.

9. The 2024 total draft budget has a per capita of N44,023, an increase from the N39,710; while capital expenditure has a per capita of N30,523 from the 25.419 in 2023.

10. The 2024 draft budget shows an increase of 22.9% in expected revenue compared to that of the 2023 approved budget. There was a 63.9% performance as at Q3 2023.

11. Compared to the 2023 revenue, opening balance decreased by 66.9%; while IGR, VAT, Statutory allocation and others increased by 34.6%, 62.58%, 41.01% and 108.2% respectively. Similarly, internal grants, external grants and Sales of Government Assets decreased by 68.24%, 90.5% and 62.5%; while external loans astronomically increased by 143.3%.

12. The 2023 Q3 performance showed 18% for opening balance, 44.0% for IGR, 105.5% for VAT, 61.3% for Statutory allocation. Also, internal grants, external grants, external loans and Sales of Government Assets as at Q3 had 17.2%, 43.7%, 10.2% and 12.0% respectively.

13. For personal income tax, there is an increase in Direct Assessment Tax (5.68%), PAYE Local Government (7.23%), PAYE State Government (3.34%), PAYE Federal Government (17.56%), PAYE Others (13.16%) and Tax Audit Arrears (134.26%). As at Q3, all the listed items performed as follows: 45.3%, 75.4%, 87.9%, 83.3%, 83.1% and 96.3% respectively.

14. While RAAMP and Agile are at different stages of implementation, the Rural Infrastructure Development loan facility from the Afri Exim Bank is new. Considering that it constitutes 66.6% of the external loan puts the State at risk if the loan does not pull through. More so, that the Q3 budget performance report shows that external borrowing had a 10% performance.

15. Even though there is a decrease in public debt charges by 28.3% in the 2024 draft budget from the amount in 2023, it still is a burden as it will be taking a huge chunk of the State’s revenue. The State is still exposed to exchange rate volatility that might increase our debt burden.

16. Considering the rising population, development challenges, and the need to cut cost of governance, the above table (17) provides possible areas (totalling about 9.7 billion) where the State government can cut down cost in order to re-allocate to more strategic priorities.

17. Worthy of note are increases in allocation for two key sub-sector that the civil society have consistently advocated for. These are the social development (increase of 173%) and agriculture (2179.79).

18. It is commendable that the State government has increased the number and allocation for youth specific budget line items for women, youth, children and PWDs. However, these allocations should be linked with relevant policies to ensure result-based service delivery.

19. It is commendable that the State government has allocated over N11 billion to the social investment programme. The lump sum allocation to social investment programmes makes it difficult to track the breakdown. It is disturbing that the Equity Funds Basic Health Care Provision Funds (BHCPF) Counterpart Funds have not been provided for over a year.

Recommendations

In view of the above observations, the following is being recommended for consideration by the State government.

1. The Inflation rate in the fiscal assumptions is unrealistic and does not speak to the current realities, the inflation rate is projected at 23.6% for 2024 as against the 27.33% published on the NBS website, thus planning for development should be based on realistics data.

2. The projected economic growth rate is overambitious looking at the economic instability occasioned by different factors such as insecurity. It is important to note that the International Monetary Fund (IMF) recently downgraded Nigeria’s economic growth forecast for the year 2023 to 2.9%. This should be reconsidered and reviewed to ensure it is more realistic.

3. The 2024 total draft budget is N35.3 billion (8.35%) higher than the MTEF recommended budget size. This means that the Government would have to borrow more to finance the deficit or shortfall. Debt servicing has continued to impact negatively on critical infrastructure and service delivery as money allocated for debt servicing annually is gradually competing with capital expenditure. This trend should be checked by both the Executive and the Legislature.

4. The 2024 draft budget increased by N81 billion (21.7%) from the 2023 budget. It is good for the government to spend more on its citizens. However, there is a need for clear and effective strategies to enhance revenue generation using the appropriate fiscal policy instrument that would enhance the revenue generation systems and processes. This should focus more on expanding the revenue sources not increasing tax rates.

5. The State government should accelerate the review and approval of the Sector Implementation Plan (SIP) to ensure adherence to policy-budget linkage and result-based monitoring & evaluation. Ideally, the sector’s budget should be drawn from their various SIPs.

6. The approved MTEF (2024-2026) macroeconomic framework recommended exchange rate of N750 should be adhered to, as appears to be more realistic considering the risks factors identified.

7. Key overhead cost (some of which we have identified amounting to N7.7 billion) should be reviewed and considered for reallocation to strategic priorities.

8. The viability of the proposed loan from Afri. Exim Bank should be reconsidered to ensure guarantee for accessing the loan. If not it should be dropped and a supplementary budget initiated when the loan is 100% guaranteed.

9. A percentage of the allocation for social investment programmes should be allocated to the take-off of the Social Security Administration to ensure better coordination mechanism and value-for-money.

10. The Equity Funds Basic Health Care Provision Funds (BHCPF) Counterpart Funds should be released adequately and timely to ensure more vulnerable groups are enrolled.

11. The reality of deficits in the health systems prompted the African Heads of State and Governments to promise to allocate at least 15% of their annual budgets to the health sector in what is now known as the ‘Abuja Declaration’ in April 2001. The last administration adhered to this commitment, we therefore call on this administration to sustain the Abuja Declaration by ensuring at least 15% of annual spending is allocated to the health sector. This is because according to the draft budget made public by the Planning and Budget Commission a day before, the sector got about 13%, even though the speech by the Honorable Commissioner mentioned 15%.

Signed

Seth Luke
Program Officer, Governance & Advocacy
CALPED

Yusuf Ishaku Goje
Head of Leadership, Governance and Advocacy
CALPED

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -
Google search engine

Most Popular

Recent Comments

sildenafil generic australia on Abandoned IDP Camp Discovered In Kaduna
Daniel Grace on WORLD DOWN SYNDROME DAY
Danjuma Saddiq on THE CONSPIRACY IN SOKOTO
Yakkon Damaryam on The War against Glaucoma
Shehu Danbaki on IMG-20181125-WA0070
Seth Yamusa on Hon Danjuma Peter Averik
Ibraheem Awowole on MEET OUR PATHFINDER FOR OSUN 2018
Amb. Hoom'Suk. on Sarauniya Beauty Pageant 2017