Abia State governor, Dr. Alex Otti has presented a proposed budget outlay of N567,240, 095,972.00 for the 2024 fiscal year, representing the maiden budget of his administration, to the Abia State House of Assembly.
Christened the “Budget of New Beginning”, the budget was presented yesterday before the plenary of the State House of Assembly.
Daily Newslead correspondent in Umuahia noted a departure from the past fiscal policies of past Abia governments as Governor Otti allocated an audacious chunk of the total budget to capital projects.
“The key distinction in the 2024 budget estimate is in the direction of spending as 84 per cent of the total budget would be spent on capital projects as against 53 per cent in 2023.
“The remaining 16 per cent of the budget would go into recurrent expenditure as against 47 per cent allocation in 2023,” he said.
Otti justified the focus on capital expenditure, saying that the 2024 budget was targeted at the expansion of public infrastructure in line with the new development targets as well as scaling up access and quality service delivery in the social sector.
Though the budget estimate represents more than a N400 billion rise from the 2023 estimate of N160.5 billion, the governor noted that when adjusted for inflation and a fall in the value of the naira, the reality would have become clearer.
He said that his budget estimate would be financed through an estimated revenue of N166,077,717,058, including earnings from Internally Generated Revenue (IGR) channels.
He disclosed that other sources of revenue to fund the 2024 budget include federation allocation, grants from multilateral organisations and income from other revenue sources that will be available to the state government over the fiscal year.
The governor stated that he would finance the deficit of N401,162,378,914 partly by new borrowings estimated at N385,271,027,214.
He explained that 50 per cent of the borrowing would be sourced externally, whilst the balance would be procured domestically, adding that borrowing to finance the budget was inevitable.
“Rebuilding the state’s public infrastructure requires the sort of targeted financing we cannot immediately access within the state. So, there is the need to borrow to fund the projects that would kick-start the economy and make us competitive on a global scale.
“All borrowing in the 2024 fiscal year would be committed strictly to capital development projects with a direct impact on the economy of the state, especially roads, schools and medical facilities.
“The projection is that the impact of these projects on the general economy in the medium to long term would generate sufficient returns that would enable the state to meet her obligation to the creditors smoothly and ultimately pay off the loans in due course,” he added.
He stressed that not a dime shall be borrowed to finance recurrent expenditure, assuring that all borrowing will be negotiated on terms that are favourable to the state.
Speaker of the Abia House of Assembly, Hon. Emmanuel Emeruwa commended the governor for what he termed a “robust budget proposal” which would ensure infrastructural transformation of the state.
Emeruwa, who noted that never in the history of Abia State had 84 per cent of the budget been devoted to capital expenditure, assured the governor that the House would give the budget proposal expeditious consideration so that the people of Abia would feel the needed impact.
