Delta 2024 Budget: Pointing To A Future Of Economic Growth And Stability

By Fred Edoreh

On Wednesday, November 29, 2023, Governor Sheriff Oborevwori presented the Delta State 2024 Appropriation Bill, tagged “Budget of Hope and Optimism.”

The event was significant not only because it serves an indication of the economic direction of the state in the coming year, but most importantly because it reveals Governor Oborevwori’s values and approach to governance as well as his grasp and responsiveness to the needs of the people and critical requirements for socio-economic growth, by which he will govern the state for the next eight years.

Satisfactorily, the budgetary plan of N714.4 billion tallies with his set framework and action plan for massive infrastructural renewal, human capital development and well calculated social investment programmes for the advancement of Delta State.

A critical analysis of the budgetary approach reveals an administration that is strongly committed to the delivery of economic growth, infrastructural development and higher standard of living for the people, and at the same time responsibly realistic and determined to ensure the financial stability of the state by maintaining fiscal prudence, judicious application of state resources and value for money.

The Governor clearly indicated this when he said the budget is aimed at striking the right balance between maintaining a tight fiscal regime and helping Deltans to navigate the prevailing difficult period and lift as many out of penury.

“This budget is emphatic on keeping our expenditure within revenue limits, reducing our debt profile and ensuring that we do not build new inflationary pressure through extra budgetary funding,” he said.

In simple words, the government is averse to profligacy, expenditures that are not planned nor budgeted for, and unnecessary borrowing.

Also observable is that while there is a cut down on various items relating to executive cost of running government, the proposal has sustained or increased by volume or percentage such items that relate directly to providing for the people, communities and workers.

This is demonstrated in the reduction, notwithstanding the current inflationary trend, of Overhead Cost by N9.7 billion or 8.35%, from N116.2 billion in 2023 to N106.5 billion in 2024; the reduction of the vote for Grants and Contributions by N4.7 billion or 32%, from N14.7 billion in 2023 to N10 billion in 2024; the reduction of the capital vote for the Administration sector by N20.9 billion or 48%, from N43.6 billion in 2023 to N22.7 billion in 2024; and the drastic reduction of Contingency provision by N8.2 billion or 61.7%, from N13.3 billion in 2023 to just N5.1 billion in 2024.

Indeed, against the tendencies for impunity in governance which is part of the bane of our national development, it is unusual to see an administration willfully reduce its executive costs as Governor Oborevwori has done in the 2024 budget.

But even more reassuring is the de-emphasis of funding the budget from such capital receipts like bank loans and bonds, which was brought down by over N100 billion or 68%, from N157 billion in 2023 to just N50 billion in the 2024 revenue projection.

Instead, the administration has opted to focus more on intensifying internally generated revenue, even without multiple taxation, and making greater investments to develop and shore up receipts from the the non-oil sector.

The prospect of achieving the IGR threshold of N110.3 billion, about 5% or N5 billion increase from the 2023 projection, derives from the steady success of the ongoing reforms in tax administration, more professional and people-friendly approach to tax collection, the plugging of detected leakages and the anticipated return of oil companies due to the progressive peacefulness of the state, especially the oil producing communities.

Another point of interest in the budget is the premium placed on the welfare of the public service. As the Governor pointed out, the increment of about N40.7 billion or 36.6% in Personnel Cost, from N109.2 billion in 2023 to N150 billion in 2024, is in anticipation of a likely increase of minimum wage by the Federal Government in 2024.

One of the hallmarks of a good budget is the anticipation of future expenditure increase, and the budget shows that the administration is forward planning and already taking steps to respond to the possible challenge of meeting the needs of workers when the time comes, rather than waiting to run into conflict with Labour with the attendant disruption of governance, low workers’morale, loss of man hour and socio-economic stress across other sectors.

At the same time, the budget increased the vote for Social Contribution, which relates to remittances of such obligations as workers housing and contributory health fund, by 8.54%, from N8.2 billion in 2023 to N8.9 billion, as well as Social Benefits, such as pensions and gratuity, from N5 billion in 2023 to N5.4 billion in 2024, an 8% increase.

Equally remarkable is the sustenance of social investments on above N80 billion mark.

Even with the glaring commitment to the social welfare of the people, the 2024 budget is pointedly aimed at delivering on infrastructural development as can be seen in the difference between the N316.6 billion or 44.31% provision for recurrent expenditure and N397.8 billion or 55.69% provision for Capital expenditure.

This is important because the macro economic growth of any society is better achieved and sustained not by recurrent consumptions but by the infrastructural and economic assets it is able to add to its socio-economic capital base.

More noteworthy in this regard is the provision of N229.4 billion, about 32.12% of the N397 billion vote for Capital Expenditure, for the Economic Sector, and N150 billion of that amount, about 37.7%, for roads and infrastructure.

The meaning is that the administration is poised, in line with the promises of the MORE Agenda to embark on the construction of more critical road infrastructure in the 2024 fiscal year because it is, as Governor Oborevwori put it, “irrevocably committed to advancing urban-rural integration.”

Examined together, the budget proposal testifies to Governor Oborevwori’s description of his administration as “focused, process driven and result-oriented.”