Is Kogi State's 2020 “Budget of Prosperity” a Hoax?

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Kogi State 2020 Budget is tagged “BUDGET OF PROSPERITY”. It is aimed at supporting the sectors of the State economy for greater impact on the quality of life of the people. Specifically, the Budget will seek: 1. To improve quality and access to education; 2. To improve quality and access to healthcare; 3. To improve food security and exploit other potential in the State that will bring greater benefits to the people; 4. To complete all on-going projects and add new critical ones that will address the needs of the people; 5. To enhance greater transparency, accountability, equity & justice; 6. To promote infrastructure development and security in the State [Kogi State Ministry of Budget and Planning].

But Did You Know?

Kogi state will be spending 58% more on Government house than it will spend on health in 2020
Kogi Government house allocation is 95% more than the amount to be spent on job creation and youth engagement in 2020.
The amount allocated to Kogi state government house is 2% more than what is allocated for Education.
Kogi State government house will be spending 15% of the 2020 Kogi State budget allocation.

Expenditure is Over Estimated

As at September 2019, actual capital expenditure of N22.25 billion which represents 31% performance when compared with estimated capital expenditure of N72.04 billion in 2019. Recurrent expenditure however performed fairly as actual recurrent expenditure as at September 2019 was 64% of the estimated recurrent expenditure of N86.14 billion in 2019. Overall, total expenditure as at September 2019 stood at N77.13 billion and this represents 48.8% budget performance when compared with the estimated total expenditure of N158.17 billion in 2019.

A state with capital expenditure performance of 31% and recurrent expenditure performance of 64% as at September 2019, is now estimating to spend N97.15 billion on capital expenditure and N92.93 billion on recurrent expenditure respectively. Over all, Kogi state plans to spend N190.08 billion in 2020, 7.77% more than the expenditure estimates of 2019. With the exclusion of transfer of revenue surplus to capital development fund, Kogi state therefore plans to spend N176.12 billion in 2020.

Revenue is However Built on Modest Assumptions

Due to the low revenue performance in 2019 (55% as at September 2019), the Kogi State government had to revise downwards, majority of all its revenue sources such that 2020 revenue estimate is 11% less than the 2019 revenue estimates.

Forex equalization was revised upwards because the state generated more from this revenue source as at September 2019. As at September 2019, actual revenue from Forex equalization was N726.75 million compared to N200.70 million budgeted to be gotten from this source in 2019. This represents growth of 262% growth. As such, the State government increased the revenue to be gotten from this source by 647%.

The NDBP Thematic Areas

The Kogi state government summarized the 2020 budget allocation in 6 key thematic areas of education, health, infrastructure, job creation, public service and other areas. They are shown below:

Source: Kogi State Ministry of Budget and Planning

Since the government house, legislature and judiciary do not fall under any of the first 5 thematic areas, it means they are under “other areas”. Based on this, it shows more money was spent on governance than on things that would make the state develop such as education for all, health and job creation. It is also worthy to note that the bureau of state pension recorded top performance in 2019 as its budget performance was highest at 96% among all the sectors. This is also reflected in the fifth thematic area above as productive public service and pension reforms had the best performance among the 6 thematic areas. This shows public service and pension reforms as the top priority of the present administration of Kogi State, followed by feeding itself with funds at the detriment of the development of the state.

Kogi State Government House Leads the Top 10 Sub-Sectors by 2020 Budget Allocation

The sub-sectors are the different offices and ministries to which the 2020 budget allocation of Kogi state would be spent. The top 10 sub-sectors will be spending N99.47 billion out of the total N176 billion that will be spent by all the sub-sectors in 2020.

Source: Kogi State Ministry of Budget and Planning

Based on the above, it can be seen that the Kogi State Government house will be spending more money than each of the other productive sub-sectors in 2020. The amount to be spent by the government house is equivalent to the combination of the amount of what the ministry of finance, ministry of education and ministry of agriculture will be spending in 2020. This amount is also equivalent to 14.5% of the entire budget. In comparison, it means Kogi state government house will be spending more than the budget for health for all citizens in the state by 58%. It will also be spending 95% more than budgetary allocation for job creation and youth empowerment. Budget for health as a thematic area is N16.16 billion while that of Job creation and youth empowerment as a thematic area is N13.67 billion.

Kogi State Government House in Focus

The Kogi state government will be spending N25.61 billion in 2020 which represents 14.5% of the entire state budget of 2020. N192.07 million would be spent on salaries, N18.95 billion would be spent on overheads, thereby making total recurrent expenditure of Kogi State government in 2020 to be equal N19.15 billion. Capital projects takes the remaining N6.47 billion allocation. This shows that of the N25.61 billion that will be spent by Kogi state government in 2020, 75% will go to recurrent expenditure while the remaining 15% is for capital expenses.

Government connect on special project and sustainable development goals constitute the capital projects with the largest items in the 2020 capital expenditure of Kogi State government at N2 billion and N1 billion respectively. The state budgeted N800 million for remodeling of the government house structure in 2019, spent N652.73 million on the project as at September 2019, and still budgeted the same N800 million for the same project in 2020.

Out of the 18 capital projects the Government house was to execute in 2019, it only worked on 6 of them while the remaining 12 did not receive any form of allocation. However, the government house still allocated money to all the 18 capital projects in 2020. There is a budget of N727.61 million for the Kogi State ministry of youth and sports, yet the Kogi state government house still has a capital estimate of N100 million under it for youth development in Kogi state.

Misplaced Priorities

Just like the Federal Government and a host of other states, Kogi State has a budget for Muslim and Christian pilgrimages. Although actual expenditure for Muslim and Christian pilgrimages as at September 2019 was N211.58 million and N20.76 million respectively, N427.37 million and N342.77 million has been budgeted to be spent on Christian pilgrims and Muslim pilgrims in 2020 respectively.
No amount was spent on local and international travel for training purposes as at September 2019. However, N82.52 million was spent on international travels for other purposes.
The state government house spent N13.33 billion as at September 2019, yet it did not pay electricity charges, water rate and telephone charges during the period. Who then pays for them?
The state government spent N470 million on the purchase and maintenance of generators as at September 2019. Yet is still budgets N500 million for the same purchase and maintenance of generators. It seems the purchase of generators is now being considered as a recurrent expenditure by the various governments.

Conclusion

It is evidently clear from the foregoing that Kogi State budget just like most states and Federal Government budget, is based on an incremental basis. That is, the states and Federal Government do not justify the amount to be spent on each item. Rather, they just estimate how much they will spend in the coming year based on how much they budgeted for the items in the previous years. More reason the Federal Budget as well as budget for most states continue to increase over years.

Kogi state which is a state of population over 5 million boasts of a budget which the government house plans to spend more money than each of the other vital sectors. The state spent over N300 million naira on sanitation and janitorial services in the first 9 months of 2019 and budgets N800 million for the same purpose in 2020, yet is still adjudged to be one of the dirtiest states in Nigeria.

Based on the analysis, do you believe the 2020 Kogi State budget is a hoax? Please provide your comments in the comment section. Additionally and should you need data backed research and analysis for your business or research needs, you can send us a mail at info@giftedanalysts.com