The structure of the country’s budgeting system whereby huge amount of money is allocated to recurrent spending and debt servicing has been identified as a major reason why Nigerians are not feeling the impact of budgetary spending.
The Chief Executive Officer, RTC Advisory Services Limited, Mr. Opeyemi Agbaje, said this during a presentation in Abuja at a media parley organised by First City Monument Bank Plc.
Agbaje in his paper titled, ‘The Nigerian Economy and Financial Sector in 2018’, said the structure of government spending as contained in the budget was such that only few people working in government circles were benefiting directly from it, while many Nigerians were being left to suffer.
He lamented that despite the fact that about 70 per cent of the budget was being allocated for recurrent spending, the less than 30 per cent that was being set aside for capital projects that would have impacted on the people was usually not adequately funded.
For instance, he said out of the N2.2tn allocated for capital spending in the 2017 fiscal period, only N1.3tn was released by the government.
Agbaje, a one-time Chairman of the Convention on Business Integrity, explained that the inability to fund capital projects could not guarantee the development for a country like Nigeria with huge infrastructure needs.
He stated, “Nigeria’s budget, as currently structured, may not affect the citizens quickly as expected unless its focus is changed from heavy recurrent expenditure to capital. Unless we reverse our budget culture, poverty will continue to grow. When you spend 80 per cent of revenue on limited number of people, you will get the sort of outcome we are currently grappling with.
“Unless you reverse the trend of your priority by spending 80 per cent on capital projects and spend less on recurrent items, there would be massive poverty.”
He explained that Nigeria’s economy was still vulnerable with fragile growth driven by increased oil production and rising crude oil price.
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