Abia State Governor Alex Otti has been counselled to take a second look at his ₦750 billion estimate  presented to the Abia State House of Assembly on Tuesday 


"The fundamentals of the budget estimate is faulty, lacks clarity and unrealistic with Nigeria business environment. It is not too late to have a second look at the budget estimates", Chief Obinna Oriaku stated in his analysis of the budget estimate, even as he noted that Gov Otti failed to say anything on Trade and Investment, job creation strategies, Transportation.  "Agriculture and food insecurity was not given its rightful position considering  our situation. 


Oriaku, former Abia State Commissioner for Finance maintained that the though the Otti administration is a beneficiary of enhanced monthly allocation  from June 2023, there had been no significant growth in the economy even as he pointed out that Gov Otti tactically failed to provide details of the performance of 2024 budget. He further noted that the 2025 budget estimate failed to address the sectoral analysis of the budget like Economic sector , social sector etc.


Find below Oriaku's analysis of Abia's 2025 budget estimate: 


Re Sustaining Momentum of 2025 Abia budget of N750,282,200.000.00. My concerns.


By Obinna Oriaku


The Governor, his Excellency Alex Otti today 10/12/ 2024 presented the 2025 budget estimate before the Abia State House of Assembly. 


The budget is an increase of the 2024 budget of N524bn to N750b representing 30% increase , the budget is  christened  "sustaining momentum". Naturally the caption suggest we are excited with the pace or comfortable with our growth and development hence the momentum should be sustained. I have my concerns on the momentum of last year budget which does not support its sustenance.


The No 1 to 22 of the 38 paragraph budget estimate address dwelt more on appraisal of the government performance in many sectors. While self appraisal is allowed, it is left for the public to agree with all that were listed as achievements. Abians are at liberty to reconfirm if the projects are commensurate  with expected values and funds spent within the 2024 budget. We are aware   of enhanced monthly allocation since this administration came on board  from June 2023, salaries and pensions are now taken for granted among the 36 states including Abuja. Many States have also reduced the gratuity obligations of its retirees, counting this as achievement is lowering the bar of governance.   


On issue of borrowing from commercial banks. I don't know what the Govt tends to achieve by denying borrowing from commercial banks through the contractors.  It is what other State governments do. Abia State borrowed through the Contractors within the 2024 financial year and this was alluded by one of the media aides to the Governor while on "Love FM" programme at  Umuahia..However, they have paid back fully to those banks . It is not a crime provided the funds are well deployed. 


No 22 of the address is where the specifics of the 2025 budget presentation and details commenced. The following represents my concerns. 


1. Deliberate decision to avoid the fundamentals of 2025 budget estimate. The 2025 budget failed to address the sectoral analysis of the budget like Economic sector , social sector etc. They also failed to state the percentage performance of current budget which serves as prelude to what we should expect in 2025 budget. Unfortunately, this present House of Assembly do  not require the Commissioner for Finance to appear before them days after the Governor's presentation for budget breakdown presentation. It used to be a tradition as the Commissioner and his team will further breakdown the basic sub heads in the budget and its current  performance and projections( assumptions) the new budget . Unless I am wrong as it was not done last year. 

Unfortunately, We did not hear anything on Trade and Investment, job creation strategies, Transportation.  Agriculture and food insecurity was not given its rightful position considering  our situation. 


Opaqueness of the fundamentals. The government failed to state basic assumptions of the budget from oil benchmarks to expected revenue from oil and exchange rate though all these are driven by the federal government.


We were not told our current year Internally Generated Revenue performance before the current estimate which is also vague. However, I have tried to break it down. The Governor said they will grow the IGR by 213% to N100.6b ,This means we did N47b within the period under review which is very doubtful going by our current run rate of 1.1b monthly while estimating N100.6b in 2025. How do we do it and how can this be achieved going by noticed internal contradictions at the Board of Internal Revenue where their basic functions have been outsourced to task force unit .


The Governor said we are expected to have 96% growth in statutory allocation to N183.4b, this means we are currently doing N97 billion..What are the strategies to grow the allocation going by the appreciation of Dollar against the Naira which we expect with the coming on stream of Dangote,  Port Harcourt and BUA refinery, which will reduce our importation of Premium Motor Spirit which is major reason for high FX among others. 


The Governor said we will have 35% increase in VAT to N55.1b which means we are currently doing N45b in VAT. With our ranking as no 35 in VAT generation and the reform before the National Assembly which will worsen our situation. How do we grow our VAT allocation beyond rhetoric?


I discovered an item in the budget address that is concerning as contained in No 32 . It said  the State plans to build reading centres and libraries in the 184 wards of Abia State with N14.6b. I will suggest that they site these  reading centres in one of the old  schools  or offices within the schools in the ward to avoid building fresh offices. The State said they plan to fence 240 schools for security of these schools which is commendable . Let's try and be efficient in deployment of our resources. 


Comparative analysis of other States as regards IGR and borrowing Plans for 2025. Lagos,  Enugu,  Ogun States and Abia.


Lagos State presented a budget of N3, 005 Trillion and and Plans to borrow only N408b . It means N2.6 trillion will be from allocation and IGR including Capital receipts. 


Abia State with a budget of N750bn will borrow 51% of the budget N364.1bn as loan .


Enugu State with N971b 2025 budget is planing to borrowing N125b as loan to fund the budget. The 2024 budget performance stood at 88% as at Jan to Sept 2024. IGR in 2022 was N26.8bn,  .2023 N37.6bn. January 2024 to Sept 2024  N144.7bn. Enugu budgeted N509bn as IGR in 2025.


Ogun  State budget for 2025 is  N1,054 trillion with 2024 budget performance at 79% recurrent revenue target and recurrent expenditure target of 56%  respectively. They plan  to borrow N159b including capital receipts in 2025 budget 


The Abia  Governor budget presentation failed to highlight the 2024 budget performance which I am sure is very poor. Abia 2024 budget performance should be about 41% budget performance which is very disappointing.The IGR of our State still hovers around N1.1b monthly as at November 2024 when Enugu is doing N18b monthly. This is outside the school fees of the institutions, collections at ABSU and HMB which they are labouring to centralize into a basket for months. 


Going by the government decision to predicate 51%( N346b) of the N750bn budget to borrowing against growing our Internally Generated Revenue (IGR)as promised during campaign is worrisome. Abia State has capacity to fund their budget from IGR as being done by many States .


Our case is like Nigeria in the 1970's when we became lazy with the discovery of oil while forgetting our pyramids of the North and our Palm Oil of the East and cocoa of the West .


What summarises our pitiable situation is that Lagos with a three trillion budget is only planning to borrow N408b while Abia State  with N750b budget is planing to borrow N364bn which represent 51 % of the budget . Ogun State  plans to borrow only N159b against a budget of N1,054 trillion while Enugu State with a budget of N971b Plans to borrow only N125b.


The loans are expected to be sourced through local and external loans. The State expects to drawdown on $115m ADFB loan which was initiated and processed by last administration which also have foreign exchange implications though they will not disclose this . In the last NBS (Nigeria Bureau of Statistic) publication of States with increased external loan, Abia State grew external loans between June 2024 to 2025 with $4.9m, beyond the impact of recalibration of old loans on current exchange rate,  the State recently drewdown on £60m RAAMP loan from World bank which may have contributed to the growth .


The fundamental of the budget estimate is faulty, lacks clarity and unrealistic with Nigeria business environment. It is not too late to have a second  at the budget estimates.


Obinna Oriaku, Ekwedike was former Abia State Commissioner for Finance