Stakeholders have begun to worry about the paltry 12.5 per cent allocation for both health and education in the 2024 Appropriation Bill, predicting that the social sector of the economy may suffer acute funding in the coming years, that will aggravate the poor living conditions of the people.
The bill, which was presented to the National Assembly by President Bola Ahmed Tinubu on Wednesday, did not toe a departure route from previous national budgets that allocated paltry figures to the social sector, which has a direct impact on the lives of the citizens. Essentially, there are concerns that regardless of the plan by the government to grant autonomy to the nation’s universities, allocating 7.9 per cent of the budget to the education sector is grossly inadequate.
President Tinubu, who had in his Renewed Hope manifesto promised 10 per cent allocation to the health sector, ended up allocating N1.07 trillion which represents 4.9 per cent of the budget.
Experts faulted the allocation of less than 25 per cent to the social sector, after government’s removal of subsidy on petrol and floating of the naira that have seen the country’s misery index move up sporadically.
While presenting the details of the N27.5 trillion budget estimates, Minister of Budget and Economic Planning, Abubakar Atiku Bagudu, said the Federal Government would lay emphasis on tax revenue than borrowing to execute the budget.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who said that the budget proposals were realistic and practicable, explained that the deficit was projected at N9.18 trillion or 3.88 per cent of the Gross Domestic Product (GDP), which is lower than the N13.78 trillion deficit recorded in 2023. In the 2023 budget, the deficit represents 6.11 per cent of the GDP.
Edun added that the budget focuses on value for money and raises the economy. “The budget deficit is being brought down from over 6.11 per cent of GDP to 3.88 per cent of GDP. That is a huge change in direction from unlimited and limitless borrowing to re-focussing on revenue and expenditure management to give value for money,” he noted.
Edun said the target was to increase tax-to-GDP from barely less than 10 per cent now to 17 per cent in a couple of years. According to him, the budget would position the economy for foreign investors to come into the country through private partnerships.
“There is privatisation in the budget. That is the direction of travel to create a stable macro-economic environment in which investors can come in and the government is yielding grounds to them and allowing them to come in and invest and provide goods and services for Nigerians,” he said.
Speaking with The Guardian on the 2024 budget, the Chief Executive Officer, Dairy Hills Limited, Kelvin Emmanuel, said the fact that debt servicing and refinancing costs are taking 30 per cent of the entire budget, and debt servicing is practically 94.8 per cent of capital expenditure while education and health, the two most critical sectors and determinants of the GDP growth rate and per capita income of the people, cumulatively got 12.5 per cent allocation, was an indication that the present government was not ready for change.
In the Abuja Declaration of 2010, the government pledged to allocate 15 per cent each to education and healthcare.
To Emmanuel, a good way for the President to show that he is attuned to the plight of the people would have been to ask for structural changes through an amendment of the Public Procurement Act to reduce the incidences of procurement fraud in the public sector, and implementation of the Stephen Oronsaye Report to cut down the cost of running the government to pave the way for more money to be allocated to the education and health sectors.
“The government needs to work on changing the structure of Nigeria’s educational system from revamping curriculum to providing infrastructure, granting higher institutions financial autonomy that will facilitate the establishment of endowment funds. It is sobering and a serious threat to national security that Nigeria currently has one doctor to 10,000 people as against 2.5 per 1,000 recommended globally. And that an increasingly high turnover of medical personnel from Nigeria does not seem to bother this government,” Emmanuel said.
An expert, who chose to remain anonymous, said: “Progressive governance means incremental progress. There are many competing sectors, all critical in their rights, that need to be funded. Let the states do their part because education and health are not on the Exclusive List. If we are placing the burden of N7 trillion on the neck of the masses, how much are the political class willing to bear?”
The Director General of the Nigerian Employers Consultative Association (NECA), Adewale Smart-Oyerinde, is of the view that while education and health sectors are critical, no one budget cycle can tackle all the challenges in the critical sectors of the economy.
“We must appreciate the fact that all the challenges in the critical sectors of the economy cannot be tackled in one budget cycle. We see that the security sector got a large chunk mainly because of the time we are in. Many sectors of the economy deserve the immediate attention of the government. However, we appreciate that all the critical areas cannot be tackled in one budget year. Other years will come, which will give the government another opportunity to look into other sectors and begin to address their problems one after the other.”
An Investment banker, Tolulope Alayande, said while he could understand the need to focus on revenue generation and increase the GDP, neglecting the social sector could be economically fatal soon.
In his words: “The social sector plays a crucial role in an economy by addressing social issues, promoting welfare and fostering inclusive development. It encompasses education, healthcare, social services and community development, contributing to a more equitable and resilient society. Additionally, a strong social sector can enhance human capital, improve productivity, and create a supportive environment for economic growth.”