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Why Nigeria Can’t Meet UNDP’s Budget Allocation Benchmark, By Statistician-General


Kano-state, Nigeria. iamge source informafrica

Kano-state, Nigeria. iamge source informafrica

THE recommendation by United Nations Development Programme (UNDP) that countries should allocate 70 per cent of budget to capital expenditure and 30 per cent to recurrent expenditure may not be adhered to in Nigeria for a long time, according to the Statistician General of the Federation and Chief Executive Officer, National Bureau of Statistics, Dr. Yemi Kale.

Nigeria in the last 10 years has been allocating more than 60 per cent to recurrent expenditure and less than 40 per cent to capital expenditure, a clear departure from UNDP recommendation.

UNDP says no country develops under such provisions because what grows a country or builds the economy is the amount of investments the country is making on infrastructure and other structural issues it required to strengthen her economy.

Collectively, only N3.342 trillion (47.63 per cent) is allocated to capital expenditure (provision of infrastructure and amenities among others), while N5.041 trillion or 52.37 per cent is to be spent on recurrent expenditure (salaries, emoluments of public servants and political office holders, running costs, and others.

This trend may continue except the country’s revenues increases, said Dr. kale.

He made the assertion while speaking to journalists yesterday in Lagos during Post-Election Discussion Series: Options and Possibilities For Government Revenue Growth and Efficiency, organised by BudgIT, a Non Governmental Organisation that promotes citizens education on public spending.

According to the Statistician General, cutting down recurrent expenditure means reducing allocation for salaries, pension and overheads which stands at 76.3 per cent in 2014 inclusive of expenditures debts and statutory transfer. Capital Expenditure is merely 23.7 per cent of the budget allocation.

Kale said another way to increase capital expenditure is to sack people, an option which might create further problem.

He said the option has also been made difficult by civil service law, which provides cumbersome procedure for firing a public servant.

“Therefore it is not a realistic option in this circumstance,” he maintained, adding “ and that leaves the option of pushing up capital expenditure and blocking wastages in government spending in order to get additional revenue.”

Kale also condemned the Federal Government policy that promotes the grant of company-specific waiver and tax holiday. He said waivers should rather be sector-specific.

“Giving waivers to individual company instead of giving important waivers to sector makes one company more competitive than the other; it gives one company more advantage over the other,” he noted.

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