Experts blame FG. 2023 elections for N4.1tn rise in recurrent expenditure

According to data obtained from the Federal Government’s budget implementation report, the amount allocated for recurrent expenditures has increased from N2.65 trillion spent in 2016 to N6.83 trillion in the proposed 2022 budget.

This is a 157.74 percent increase in six years, raising concerns over rising government overhead costs amid a faltering economy.

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During the period under review, recurrent expenditure significantly increased each year, according to the analysis.

In 2016, out of a total expenditure of N6.06tn, recurrent expenditure was N2.65tn. The money budgeted for capital expenditure was N1.59 trillion, while the amount budgeted for debt service was N1.48 trillion. There was a N2.2 trillion budget deficit.

In 2017, it increased by N340 billion, or 12.83 percent, to N2.99 trillion. Capital expenditure accounted for N2.18 trillion of the total N7.44 trillion expenditure, while debt servicing accounted for N1.66 trillion. A fiscal deficit of N2.36 trillion was recorded.

In 2020, out of a total expenditure of N10.59tn, recurrent expenditure was N4.84tn. This is a 19.51 percent increase of N790 billion. The money budgeted for capital expenditure was N2.47 trillion, while the amount budgeted for debt service was N2.7 trillion. A fiscal deficit of N2.28 trillion was recorded.

The increase in 2020, on either contrary, might be attributed to the budget’s inclusion of the new National Minimum Wage.

In 2021, recurrent expenditure was planned at N5.64 trillion, an increase of N800 billion or 16.53 percent over the previous year. Capital expenditure accounted for N4.13 trillion of the total N13.59 trillion spent, while debt service costs were N3.32 trillion. There was a N5.2 trillion budget deficit.

Between January and August, about N3.84 trillion of the N5.64 trillion recurrent budget was spent.

Recurrent expenditure hit an all-time high of N6.83 trillion in the latest 2022 budget proposal, which passed the Senate’s second reading, indicating an increase of N1.19 trillion or 21.1 percent. Personnel costs ate up N4.11 trillion in non-debt expenditure in 2022; pensions, gratuities, and retiree benefits takes up N577 billion; and overheads ate up N792.39 billion.

Capital expenditure stood for N5.35 trillion of the total expenditure of N16.39 trillion, while debt servicing was budgeted at N3.61 trillion. There was an N6.26 trillion budget deficit.

The recurrent expenditure element of the budget in 2022 stands for 41.67 percent of the total budget and is the single largest component of the budget. It’s also N700 billion more than the total expenditure for the last year.

A total of N30.15 trillion has been budgeted for recurring expenditures in Buhari’s administration. This figure is higher than the anticipated total budget of N16.39 trillion for the fiscal year 2022, and it represents roughly 85% of Nigeria’s existing debt stock of N35.47 trillion.

Experts have lamented the nation’s ever-increasing expense of government. The Federal Government, through Minister of Finance Zainab Ahmed, stated in May 2021 that it was striving to lower the high cost of governance by minimizing unnecessary expenditures, which might include worker salary cuts.