Governor Alex Otti, at the helm of the Abia State government, has disclosed plans to borrow N401,162,378,914 to fund the state’s 2024 budget. Presenting the budget estimate of N567.2 billion to the State House of Assembly on Tuesday, Otti has named this financial plan the “Budget of New Beginning.”
This budgetary announcement reflects the state’s proactive approach to financing its developmental projects and meeting the fiscal requirements for the upcoming year. By borrowing a substantial amount, the Abia State government aims to execute key initiatives outlined in the budget, prioritizing areas that contribute to the state’s growth and revitalization.
Governor Otti’s vision for a ‘New Beginning’ signifies a commitment to transformative changes, setting the stage for increased development and progress in Abia State in the coming fiscal year.
Otti said, “The 2024 budget proposal targets the expansion of our public infrastructure in line with our new development targets, scaling up access and quality service delivery in the social sector, with a special focus on education and health where we are proposing to commit more than 20 per cent and 15 per cent of the aggregate budget spending, respectively.
“The key distinction in the 2024 budget estimate, however, is in the direction of spending. While the 2023 projection allocated 53 per cent of the entire budget for capital expenditure, our target in the 2024 fiscal year is to spend 84 per cent of the total expenditure on capital projects and commit 16 per cent to recurrent expenditure, as against 47 per cent in the 2023 estimates.”
However, checks revealed that the budget proposal has a deficit of around N400 billion which the state said would be financed with local and external borrowings.
The state’s revenue for 2024 in the proposal was estimated at N166 billion which will be generated through grants from multilateral organisations, Internally Generated Revenue (IGR), allocation from the Nigerian government and other income sources.
The 2024 budget proposal of N567.2 billion is higher than the state’s budget of 2023 by around N407 billion.
“Highlights of the Abia State 2024 Budget Estimate as Presented by Gov. @alexottiofr to the State House of Assembly,” Dodoh Okafor, Senior Special Assistant to Governor Alex Otti on Public Communication posted on X (formerly Twitter).
“1. Total budget estimate: Five Hundred and Sixty-Seven Billion, Two Hundred and Forty Million, Ninety-Five Thousand, Nine Hundred and Seventy-Two Naira.
“Capital Expenditure: N476,011,317,893.00 (excluding the capital component of Statutory Transfers). This figure represents 84% of the entire budget envelope. The bulk of this sum would be spent on road infrastructure, building and equipping of new schools and hospitals.
“Recurrent expenditure: N91,228,778,070.01 representing 16% of the budget envelope. Budget provision to cater for increase in the state salary package as the governor works to change the state wage structure to reflect the economic realities of the time.
Expected revenue: N166,077,717,058 covering IGR, earnings from FAAC, grants from multilateral and donor agencies and all other revenue sources that shall be available to the state in the course of the year…
“Financing the deficit: The deficit of N401,162,378,914 will be financed by new borrowings estimated at N385,271,027,214. Fifty percent of the loans will be sourced externally, whilst the balance will be procured domestically.
“Loans will only be procured at concessionary rates and committed strictly to projects that have direct impacts on the economic and social development of the communities in all parts of the state.”