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Government loses claims on efficiency with N4tr recurrent expenditure plan

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Recurrent expenditure at N4tr betrays govt’s efficiency claims
If there is efficiency in Nigeria’s governance, it has not been in the last fours and would remain a pipe dream, until it is realised, possibly in distant future, as about N500 billion additional cost is projected this year, despite revenue shortfalls.

The 2019 appropriation plan sent to the National Assembly has N4.04 trillion as Recurrent Expenditure, representing 15 per cent increase from N3.5 trillion planned in the ongoing 2018 budget.

The recurrent non-debt expenditure is bigger than what the entire northern and South East states cumulatively budgeted for 2019, as well as without provision for the ongoing minimum wage negotiation. In 2017, the approved recurrent non-debt expenditure was N2.99 trillion, a marked departure that represents 35.1 per cent increase compared to the N4.04 trillion proposal for 2019.A fiscal governance campaigner, Eze Onyekpere, retorted: “This increment cannot be the sign of a system that is taking steps to remove waste and inefficiencies.”

The persistent yearly increases in the recurrent non-debt expenditure, which is a continuum from the previous administrations, has become a permanent feature in the last fours.Coming despite revenue shortfalls, which have predisposed the country to serial borrowings and attendant huge costs, government has been claiming wizardry in cutting down wastes, improving efficiencies and removing ghost workers from the payroll.

Specifically, the last budget under President Goodluck Jonathan’s government had N2.42 trillion recurrent expenditure, out of N4.35 trillion total plan, followed by President Muhammadu Buhari’s first budget at N6.07 trillion, with N2.65 trillion recurrent expenditure, while in 2017, it moved to N2.98 trillion out of N7.3 trillion total budget.

Professor of Capital Market and President of the Association of Capital Market Academics of Nigeria, Uche Uwaleke, explained that recurrent expenditure has always overrun capital expenditure.For Uwaleke, while government claimed that N4.59 trillion had been spent from 2018 budget as at September 30, 2018, against the prorated expenditure target of N6.84 trillion, “the adverse variance fell more on capital spending in view of the fact that debt service and the implementation of non-debt recurrent expenditure- payment of workers’ salaries and pensions, were largely met.”

Onyekpere added: “Government must resolve the contradiction between the mantra of cutting down waste, improving efficiencies, as well as removing ghost workers from the payroll and the rising recurrent non-debt expenditure.

But the Executive Director of OJA Development Consult, Jide Ojo, said the The threats of industrial actions by different labour unions over welfare issues, especially the Nigeria Labour Congress and Trade Union Congress portend worsening recurrent expenditure profile.“If government renege on N30,000 minimum wage, it constitutes a threat to productivity and economic prosperity,” noting that to accede to the demand would definitely expand the wage bill.

He expressed concerns that despite the number of retiring civil servants, acclaimed huge number of ghost workers removed from payroll and efficiency claims, recurrent expenditure budget has been on the increase.


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