Otti Presents N567bn Budget Proposal for 2024 Fiscal Year

Emmanuel Ugwu-Nwogo in Umuahia

Abia State governor, Mr. Alex Otti has proposed a budget outlay of N567,240, 095,972.00 for the 2024 fiscal year, representing the maiden budget of his administration.

The budget which he christened the “budget of new beginning” was presented yesterday before the plenary of the State House of Assembly.

There was a notable departure from the past fiscal policies of past Abia governments as Otti allocated an audacious chunk of the total budget to capital projects.

“The key distinction in the 2024 budget estimate is in the direction of spending as 84 per cent of the total budget would be spent on capital projects as against 53 per cent in 2023. The remaining 16 per cent of the budget would go into recurrent expenditure as against 47 per cent allocation in 2023,” he said.

He justified the focus on capital expenditure,  saying that the 2024 budget was targeted at expansion of public infrastructure in line with the new development targets as well as scaling up access and quality service delivery in the social sector.

Though the budget estimate represents more than N400 billion rise from the 2023 estimate of N160.5 billion, the governor noted that when adjusted for inflation and fall in the value of the naira, the reality would be become clearer.

 Otti said that his budget estimate would be financed through estimated revenue of N166,077,717,058, including earnings from Internally Generated Revenue (IGR) channels.

Other sources of revenue to fund the 2024 budget include federation allocation, grants from multilateral organisations and income from other revenue sources that will be available to the state government over the course of the fiscal  year.

Otti said he would  finance the deficit of N401,162,378,914 partly by new borrowings estimated at N385,271,027,214.

He explained that 50 per cent of the borrowing will be sourced externally, whilst the balance will be procured domestically, adding that borrowing to finance the budget was inevitable.

He said: “Rebuilding the state’s public infrastructure requires the sort of targeted financing we cannot immediately access within the state. So, there is the need to borrow to fund the projects that would kick-start the economy and make us competitive on a global scale”.

 “All borrowing in the 2024 fiscal year would be committed strictly to capital development projects with direct impact on the economy of the state, especially roads, schools and medical facilities.

“The projection is that the impact of these projects on the general economy in the medium to long term would generate the sufficient returns that would enable the state meet her obligation to the creditors smoothly and ultimately pay off the loans in due course,” he added.

He stressed that not a dime shall be borrowed to finance recurrent expenditure, assuring that that all borrowing will be negotiated on terms that are favourable to the state.

In  his response, the Speaker of Abia House of Assembly, Hon. Emmanuel Emeruwa lauded the governor for the “robust” budget proposal which would ensure infrastructural transformation of the state.

He noted that never in the history of Abia State had 84 per cent of budget been devoted to capital expenditure.

Emeruwa assured the governor that the House would give the budget proposal expeditious consideration so that the people of Abia would feel the needed impact.