The revised 2020 Budget which has just been endorsed by the President is, without doubt, a product of necessity. I think the budget benchmarks in terms of crude oil price and output reflect current realities.
The capital allocations also reflect government priorities with Works and Housing getting the largest share. Other sectors that received attention include Power, Transport and Agriculture.
Relatively speaking Education and Health got larger allocations compared to last year. The Health sector in particular will also be the greatest beneficiary of COVID’19 intervention allocations.
However, it is disturbing that total capital allocation of about N2.3 trillion is less than allocation to debt service of nearly N3 trillion. This underscores the need to find a lasting solution to the huge debt burden currently facing the country.
I also think the Recurrent expenditure can be reduced especially that of the Ministry of Defense at over N700 billion. Another area requiring searchlight is the over N1 trillion service-wide votes with items like contingency of N15 billion, the same amount provided for in 2019 budget.
There is also a provision for ‘International Sporting competition’ of N5 billion when it is obvious that many of such competitions won’t be holding this year due to COVID’19.
In all, I commend the Federal Ministry of Finance Budget and Planning for its effort in ensuring that the country’s disjointed budget cycle is normalized. What remains now is effective implementation of the budget in order to ensure that the economy does not experience any severe recession.
To this end, the directive by the President to the Ministry of Finance to ensure that MDAs get at least 50% of their revised capital budget before the end of this month is highly commendable.
If that happens, there is the likelihood that unlike previous years, the capital component of the 2020 budget could attain a substantial level of implementation.
*Uwaleke is a Capital Market Professor.