The Lagos Chamber of Commerce and Industry (LCCI) has urged Federal Government to improve its budget performance in terms of capital expenditure in 2024.
Its Director General, Dr Chinyere Almona, gave the advice on Thursday in Lagos, in reaction to the proposed 2024 budget of N27.5 trillion presented by President Bola Tinubu on Wednesday.
It was reported that the budget named, “Budget of Renewed Hope”, is the biggest since inception with strong focus on defence, internal security and job creation.
A review of the proposed budget revealed oil price benchmark of 77.96 dollars per barrel and a daily production estimate of 1.78 million barrels with an exchange rate of N750 to a dollar was adopted.
Further breakdown, indicates that non-recurrent expenditure is 9.92 trillion, which is 19.1 per cent higher than the 2023 budget.
Also, debt service is projected to be N8.25 trillion (30.7 per cent more than the 2023 budget) and capital expenditure is N8.75 trillion.
Almona said the reason to improve the budget performance was because the capital expenditure had always been low, relative to the recurrent expenditure.
According to her, this has implications for the country’s infrastructure sector, hence calls for urgent solutions.
She, however, said that it was commendable that the strategic objective of the expenditure policy was expected to tackle macro-economic stability, investment, environment optimisation, human capital development, poverty reduction and social security.
“The LCCI notes that the assumptions are conservative, particularly in terms of oil prices and exchange rates.
“However, daily oil production remains a major concern due to persistent underinvestment, vandalism, oil theft, and rising production costs in the oil sector.
“The Chamber also notes that relative to Nigeria’s Gross Domestic Product (GDP) size, the proposed budget is 12.2 per cent, which is very low compared to its African peers like South Africa, with a government expenditure to GDP ratio of 32.5 per cent, Egypt (24.7 per cent), Kenya (23.0 per cent) and Ghana (27.1 per cent).
“This is a serious issue that needs to be addressed by government, in the light of its renewed hope agenda,” she said.
Almona stressed that attention must be on investment in transport infrastructure, to mitigate the high cost of fuel and resolve the manual logistical challenges impacting the movement of goods and services nationwide.
She said that looking beyond oil revenues, government must build investors’ confidence and enhance forex earnings through non-oil exports.
“We need to invest more in export infrastructure through automation and implementation of critical port reforms to reduce the bottlenecks in our export logistics and processes.
“In addressing the most significant components of human capital development, we urge governments at all levels to be committed to significantly improving budget implementation in strategic sectors of the economy, including agriculture, education, health, infrastructure, and security.
“Efforts must be made to scale up revenue collection by the Federal Inland Revenue Service (FIRS) through consistent tax administrative measures, digitalisation, and policy reforms,” she said.