Structural problems plague Nigeria’s 2014 fiscal budget - CNBC Africa

Structural problems plague Nigeria’s 2014 fiscal budget

Western Africa

by Dara Rhodes 0

Capital expenditure is only 27 per cent of the total expenditure. Photo: Getty images.

With the wages and Bills in the 2014 budget up by about 1.72 trillion naira from 1 trillion in 2013, many are concerned than the government is spending more on recurrent expenditure that capital that actually affects the average Nigerian. Notwithstanding, due to oil theft and lower custom duties, the overall budget is lower than that of 2013.

“I think the problems of our budget are structural, this problem of recurrent to capital ratio, is a structural problem and I’m actually a bit surprised that the financial minister and the government have just realised those structural problems,” Opeyemi Agbaje, a policy analyst and the CEO of RTC Advisory told CNBC Africa.

Nonetheless, he believes that Nigerians have been inconsistent in their expectations as they advocated for higher wages and are unhappy with the recurrent expenditures.

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“So it’s clear, if you advocate higher wages, you must not be surprised when recurrent expenditure arises. You cannot be. If you support subsidies, you cannot be surprised if recurrent expenditures do not fall,” he said.

Despite this, many Nigerians still feel that the 27 per cent given to capital is far too minor compared with the 73 per cent delegated to recurrent spending. However, Dr Abiodun Adedipe, economist and CEO of Adedipe & Associates doesn’t believe this is the case.

“I see it totally differently and I say that with all sense of responsibility. Having the privilege to serve on the Federal Government’s committee that looked at this problem specifically between October 2010 and March 2011,” Adedipe told CNBC Africa.

The minister of Finance, Mrs Ngozi Okonjo-Iweala said in her that the country’s budgets need to be restructured as its present structure is why the recurrent expenditure is on the rise. 

“There is a whole lot more to the problem of recurrent expenditure in Nigeria, than merely personnel expenses,” Adedipe added.

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