Federal lawmakers have expressed concern over the N4.79 trillion allocated for personnel costs in the 2024 budget for Ministries, Departments and Agencies (MDAs). This represents a significant increase of N651 billion compared to the N4.1 trillion allocated in the 2023 budget.
The inflated personnel cost has raised eyebrows among lawmakers, who questioned the rationale behind such a substantial increase, especially considering the nation’s current economic challenges. The rising cost of living and the need for investments in critical infrastructure and social programs have further highlighted the apparent discrepancy in budget allocation.
On Monday, the House of Representatives expressed dissatisfaction with the increase in the personnel component of Ministries, Departments, and Agencies (MDAs) from N4.1 trillion in the 2023 Appropriation Act to N4.79 trillion in the proposed 2024 budget. The House Committee on Appropriation, led by Chairman Abubakar Bichi, raised concerns about the significant difference of N621 billion.
During an interactive session with the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, on the 2023 budget performance and 2024 budget defense, Bichi emphasized the need to scrutinize the budget carefully. Some lawmakers also requested information on crude oil production and sales, as well as updates on the implementation of the Steve Oronsanye report on civil service reforms, aiming to reduce the high cost of governance.
Bichi stated, “As you are all aware, the sum of N27.5 trillion has been earmarked for the 2024 budget, and the sum may look very big, but considering the inflation, exchange rate, and all of that, we believe that we really have to look into it to support Mr. President to achieve his 8-point agenda.”
“There are some questions I want to ask about personnel per MDA. In 2023, the amount budgeted for personnel for MDAs was N4.139 trillion, and from the data that we have, from January to September, N3.1 trillion has been released. If you add 3.9 divided by 9 and want to project from September to December, the actual amount is going to be N4.1 trillion.
“In the 2024 budget, the personnel of MDAs is N4.79 trillion, while in 2023, it was N4.1 trillion; so the difference is N651 billion from 2023 to 2024. So, the difference honestly is wide enough to ask why. Because when you have almost N2.06 trillion in your deficit, that means we over-budgeted the money for recurrent or what? We need more light on that.”
While responding to various questions from the lawmakers, Mr. Edun explained that the 2024 budget estimates seek “A reduction of the fiscal deficits from 6.1 per cent to 3.88 per cent and likewise an increase in the capital share of the budget.”
“Government revenue as a percentage of GDP is still under 10 per cent compared to the average for African countries, which is nearer to 15-18 per cent and, in some cases, is even over 25 per cent. The government does not have enough revenue to fund critical infrastructure.”
Noting that interest rates globally remain high, the Minister explained that the Bola Tinubu-led government was looking inward for revenue rather than relying on multilateral sources.
“So, we would be looking at getting more revenue from across the board of government business, which means government enterprises, the parastatals, as well as looking to private sector investment,” he added.
Concerns Raised by Lawmakers:
- Economic Viability: Lawmakers voiced concerns about the sustainability of such a high personnel cost, questioning whether it is fiscally responsible considering the current economic climate.
- Over-budgeting: The significant increase from the previous year’s budget raised concerns about potential over-budgeting and inefficient allocation of resources.
- Transparency and Accountability: Some lawmakers demanded greater transparency and accountability in the management of personnel costs, urging for a breakdown of the proposed expenditure.
- Impact on Other Programs: The inflated personnel cost raises concerns about the potential impact on other critical programs, such as education, healthcare, and infrastructure development.
Potential Outcomes:
- Budget Review: The significant increase in personnel cost could lead to a review of the budget by the National Assembly, potentially resulting in adjustments or cuts to other areas.
- Increased Scrutiny: MDAs responsible for managing personnel costs can expect increased scrutiny and pressure to justify their budgets and demonstrate efficiency.
- Focus on Transparency: The demand for transparency and accountability could lead to improved reporting and stricter oversight of MDAs’ spending on personnel.
- Prioritization of Re-allocation: The concerns raised by lawmakers may prompt a discussion about re-allocating funds from personnel costs to other critical areas, such as infrastructure or social programs.
Moving Forward:
The issue of the inflated personnel cost in the 2024 MDAs budget highlights the need for careful consideration and responsible allocation of resources. As the National Assembly reviews the budget, it is crucial to ensure that it prioritizes fiscal responsibility, transparency, and investments in areas that benefit the nation’s overall development and well-being.
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