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Ten states’ had budgeted capital expenditure (capex) for 2017 and 2018 hitting a combined N2trn.
The States include Kwara, Ondo, Plateau, Edo, Kastina, Yobe, Delta, Kogi, Kaduna and Kano states, data from BudgIT which was analysed by BusinessDay shows.
According to the report by BudgIT, a civil organization that deals in budget transparency and accountability in Nigeria, the ten states as at April 18th, 2018 have their budget in public domain.
The budgeted capital expenditure for Delta state rose by 18.4 per cent to N161.6 billion in 2018 from N 136.5 billion in 2017, Kano state spiked by 9.7 per cent to N151.9 billion in 2018 from N138.5 per cent in 2017. Kaduna state’s capital outlay declined marginally by 0.15 per cent to N131.2 billion in 2018 relative to N131.4 billion spent in the preceding year.
Analysts have attributed this trend of a surge in infrastructural spending as an essential factor to drive inclusive economic growth.
“One of the things that I see common among these states is the investments in infrastructure and in my opinion it is just in line with the ruling All Progressive Congress’ manifesto to invest more in infrastructure that would foster economic growth and development ,” Ayodele Shittu, a Lecturer in the Department of Economics, University of Lagos said on phone.
Based on the states’ 2017 and 2018 budget documents, Delta state combined capital expenses for the two years period is N298.1 billion, Kano’s outlay amounts to N290.4 billion and Kaduna had N262.6 billion. Others are Katsina state (N257.8 billion), Kogi state (N204.9 billion), Kwara state (N191.0 billion).
Edo state total capital expenses so far is N144.3 billion while Plateau, Ondo and Yobe states respectively has budgeted N140.6 billion, N140.1 billion and N72.1 billion as capital expenses for the two years period.
There are views that the state government investments are being channelled towards railway projects in Kano and Kaduna states to open up major farms which are located in that region.
“I suspect that rail is part of Kano and Kaduna major infrastructural investments. It will ease transportation among food producers in the hinterland of the two states which will in turn have a knock on effect on food production and improve food availability in those regions and in the long run lead to stable food prices” Ibrahim Tajudeen, Head of Research, Chapel Hill Denham told BusinessDay on phone.
The total budget of the ten states for the two year period is put at N3.6 trillion in which capital expenditure is N2 trillion which is higher than recurrent expenditure which is N1.5 trillion. This is a good sign as against the normal trend where a large chunk of state governments’ budget is spent on paying salaries and other recurrent expenses, leaving a paltry amount for capital expenditure.
“If we have a situation where a number of states have capital expenditure budget than the recurrent expenditure that for me is indicative of progress in addressing the infrastructural deficit we have in the country,” Johnson Chukwu, Chief Executive Officer of Lagos-based financial advisory firm, Cowry Assets Management Limited, said.
“A lot of times the revenue of the states is barely enough to cover recurrent expenditure so the capital expenditure are always projected on the fact that the government will have some kind of windfall,” Chukwu added.
The onus therefore rests on the various state governments that are yet to release their documents to the public to do that since it is a public document.
Doing that will improve the country’s transparency rank from the 80th position out of 115 countries notching 17 points out of a possible 100, according to transparency index by International Budget Partnership (IBP) 2017.
“States that do not have their documents known should emulate these states so that we can improve our level of transparency in this country”, Chukwu concluded.
BUNMI BAILEY
