- Capital to Recurrent ratio is 66%:34%.
- Captial Expenditure: N157.56bn (66%)
- Recurrent Expenditure: N79.96bn (34%)
Governor Nasir el-Rufai will approach the State House of Assembly on Tuesday carrying with him his government’sdraft 2021 budget; and he will lay out to the assembly women and men his proposal to spend a total of N237.52 billion, his sixth budget presentation since he became governor in 2015, Business A.M. learnt over the weekend, from sourceswith knowledge of the development.
Business A.M. sources also disclosed that the draft spending plan took strongly into consideration the damaging economic impact of the coronavirus pandemic which has devastated economies around the world and in Nigeria, has severely harmed federal and state revenues following the impact it has had on global oil prices and oil demand, as well as the lockdowns that have stifled economic activities globally and in the country.
Indeed, the 2021 spending plan has not departed from the current budget that the state is running on. Following the huge drop in oil prices earlier in the year, the government revised its 2020 budget downwards to reflect the changing economic climate and the State House of Assembly passed the sum of N233.6 billion. The draft 2021 budget is only N3.86 billion more than the revised budget for this year.
We have also learnt that Governor el-Rufai will be telling members of the State House of Assembly that out of the total N237.52 billion to be proposed, N157.56 billion, representing 66 percent, will be spent on capital expenditure while N79.96 billion will be spent on recurrent expenditure, representing 34 percent of the total amount. This also signposts the continuing commitment of the government to capital expenditure which it has pushed since it came into office in 2015.
We also understand that el-Rufai will tell the speaker and his colleagues that the 2021 budget will seek to focus on three core areas, namely, education, health and infrastructure, seen as the government’s abiding commitment and for which 63 percent of the entire budget will be devoted. Business A.M. understands on good authority that the thinking in the el-Rufai led administration is that health and education are principal components of human capital development, hence the need to devote more of the budget spending to these areas, while investment in infrastructure is driven by a belief that it is critical to maintaining the state’s competitiveness, support for economic dynamism, job creations and promoting the well-being of the people of the state.
Other highlights Governor el-Rufai is expected to lay out in the draft budget before the State House of Assembly include, that the state will spend 25 percent or N59.59 billion of the total budget on education; that it will spend N35.78 billion or 15 percent on health and another N55.1 billion or 23 percent on infrastructure.
Indeed, we learnt that the draft budget will also lay out the government’s plan to devote the sum of N124 billion, nearly 79 percent of the capital budget of N157.56 billion, to the economic and social sectors. This will include N62.2 billion to be spent on the social sector, comprising capital spend of N38 billion on education and N22.6 billion on health.
Other allocation to be laid out to the speaker and his colleagues will include, that economic sector capital allocation of N62.13billion comprises of infrastructure, which is getting N37.4 billion; agriculture, which is getting N10billion; business, innovation & technology, which will get N5.6 billion; and housing and urban development, which will get N8.6billion.
According to sources privy to the draft budget, the government believes that infrastructure budget ensures continuation of the urban renewal programmein Kaduna, Kafanchan and Zaria, and that the urban renewal project is the largest ever injection of funds to upgrade the three major cities in the state. The government believes that this has already changed the face of Kaduna where it started last year.