By Adeyinka Adeniran
Oyo state government has justified its decision to christen the 2024 budget recently presented to the House of Assembly as the “Budget of Economic Recovery”, emphasizing how it would transform the state economy on the path of recovery.
The Commissioner for Budget and Economic Planning, Professor Musibau Babatunde gave the explanation over the weekend during a parley to give a breakdown of the N434.2billion 2024 Budget proposal presented to the State House of Assembly by the state governor, ‘Seyi Makinde.
The parley was attended by Civil Society Organisations, government functionaries among other stakeholders.
According to Babatunde, a Professor of Economics, the proposed budget is a reflection of the economic recovery plan of the Governor Seyi Makinde-led administration towards addressing the current economic challenges and fast track economic recovery.
He said the 2024 Budget was prepared against the backdrop of continuing global and national economic challenges, noting that the government would execute the budget to bring about sustainable economic recovery in the state.
He said: “The proposed budget reflects the economic recovery plan of the present administration towards addressing the current economic challenges and fast track economic recovery.
“The budget indicates the commitment of the administration to economic reforms necessary for creating opportunities towards achieving economic recovery and also reflects government desires on sectoral allocations to reflate the economy, unlock private investment, stimulate effective demand, accelerate economic growth and achieve sustainable development.”
Presenting the breakdown and analysis, the commissioner stated that the highlight of the budget is part of the physical transparency and accountability of Governor Makinde-led administration.
He added that the highlights of the budget, which according to him, would determine the destiny of Oyo State in the next fiscal year, is adequately captured to reflect the governor’s Roadmap for Sustainable Development 2023-2027 and the Sustainable Action for Economic Recovery (SAfER) programme that followed the subsidy removal and exchange rate unification.
Professor Babatunde equally explained that the estimate for recurrent expenditure in the 2024 Budget proposal is N211,884,445,738.94, representing 48.80 per cent of the budget, while the capital expenditure of N222,337,320,199.85 represents 51.20 per cent of the budget.
The capital expenditure is 2.4 percent higher than the recurrent expenditure.
He further said that the percentage of the recurrent expenditure estimate was high because it had been designed to capture the monthly wage award of N25,000 to civil servants and N15,000 to pensioners, which increased the state’s wage by an additional N2.8billion in its first month of payment and is expected to run for six months.
The percentage of the proposed budget are: personnel cost N103, 737, 310, 574.17 (23.89 percent); overhead cost N39, 891, 135, 164.77 (9.18 percent) and CRFC N68, 256,000,000.00 (15.12 percent).
He noted, however, that the 2024 Budget would focus more on ongoing capital projects and programmes that would boost human capital, unlock the state’s economic potential through agriculture and agribusiness value chain, tourism and solid minerals development, as well as promotion of Public Private Partnership, among others.
The sectoral analysis of the proposed budget showed the government’s commitment to the economic recovery of the state, as the social and economic sectors, which comprise education, health, youth and sports, culture and tourism, agriculture, works and infrastructure and finance received the largest allocations.
Prof Babatunde also used the opportunity to highlight the revenue projections in the budget draft, stating that the state government looks forward to earning N86 billion in statutory allocations, N71.5 billion in Value Added Tax, N10 billion in Excess Crude, N36.3 billion in capital receipts, among others.
He added that the government has projected N72 billion as the Internally Generated Revenue for the year 2024 at the rate of N6 billion monthly, noting, however, that residents of the states should not exercise fears over tax increment.
The commissioner maintained that the state is reviewing the current tax administration to ensure that more taxable entities are brought into the tax net, while it will also block leakages by improving revenue collection through ICT.
He also gave an assurance that there would be control and enforcement on spending limits to ensure that a sound budgetary system is put in place to include aggregate fiscal discipline, efficiency and effective spending of the budget.
As presented, education got the highest share of the budget with N90, 664, 994, 252 (20.88 percent). It is followed by infrastructure which got N74, 316, 325, 706 (17.11 percent); health had N40, 998, 197, 758.30 (9.44 percent) and Agriculture is N15, 848, 707, 310.80 (3.65 percent).
He said the government will continue to use technology to block loopholes noting that as done in previous years, the government has no plan of increasing tax.
He assured that the budget will cover projects, policies and actions which when implemented will cushion the effect of the hardship the people are facing as a result of fuel subsidy removal.
The budget was structured into four sectors including: administrative, law and justice, economic, and social.
While the administrative sector gets N81,381,683,972.74, security got N2,775,073,508.57.
For the economic sector, agriculture got N15,848,708,031.80; Works and Infrastructure N74,316,325,706.08; Finance N38,712,966,344.29 and Others N40,309,955,686.74.
Law and justice got N12,242,521,978.80 (2.82 percent).
In the social sector, health got N40, 998, 197, 758.30; Education N90,654,949,252.68 (20.88 percent); Youths and Sports N4,061,308,079.06 (0.94 percent); Culture and Tourism N1,860,110,787.37 (0.43 percent) and others N31,059,964,832.36 (7.15 percent).
For the expenditure projection (recurrent expenditure), the Office of the Executive Governor will spend N19, 207, 579, 201. 00; Cabinet and Security Service N700million; the Legislature N3, 040, 853, 086.33; House of Assembly Service Commission N1, 145, 343, 337.20; Oyo State Pension Board N18, 049, 716, 223.40; Teachers salary N43, 047, 949, 892.64 and the Hospital management board N9, 920, 000, 000.00.
For the capital expenditure, the Pffixe of the Executive Governor will spend N21, 025, 000, 000.00; Cabinet and Security Services N483, 840,000.00; State Emergency Management Authority N66, 320, 985.00; Oyo State Persons with Disability Agency N492, 500, 000.00 and Project Monitoring Department N100, 000, 000 among others.
A review of the 2023 budget performance indicates that as at the end of September 2023, total recurrent revenue performance was 60.77 percent (N188,660,401,070.47) of the approved estimate.
While the recurrent revenue stood at N186,160,401,070.47 (68.02 percent), the capital receipt of N2,500,000,000 (6.80 percent) of the approved estimate of 2023.
The breakdown of the recurrent revenue of 2023 puts the IGR at N35, 974, 357,688.20 (43.26 percent) of approved estimate. FAAC N39,502,777,915.77 (79.01 percent); VAT N51, 812,410,011.96 (86.35 percent) and Others (loan) N58,870,855,454.54 (73.12 percent).
