The budget proposal was presented yesterday by the minister of finance. I’ll skip over the rather unfortunate events to focus on the actual budget. The budget is interesting.
Capital expenditure ( the expenditure that really counts) is down. This probably means less spending on infrastructure; roads, railways, airports, bullet proof BMWs….. and all that. Of course its not only the size of the capital budget that matters. The quality of spending matters more. Less on BMWs and more on roads might be a good thing. As expected, recurrent expenditure is up. For all the talk about tackling wasteful spending and trimming the civil service, the results are not showing up in the budget. This budget proposal seems to suggest that NOI is throwing in the towel with regards to re-balancing the budget away from salaries and pensions towards infrastructure spending. Just goes to show that re balancing the budget is more political will and less financial, consultant facilitated, tricks. Does this administration have the guts to shrink the civil service or tackle ASUU? No. Recurrent spending it is.
On the plus side the projected deficit is down. Total spending is also down from N4.987tn in 2013 to N4.642tn proposed in 2014 although that is probably due to shrinking oil revenues. Which brings me to the worrying part of the budget; the FG is still dependent on oil revenues. About 70% of the revenue is directly from oil. Considering that the oil industry has been shrinking over the last few years, while the non-oil section of the economy has been growing, it is worrying.