Re_2025, Sustaining the Momentum: A Budget for Growth: addressing the ‘concerns’ of our ‘friends’ of Abia State
As the State welcomes the 2025 Abia State budget of ₦750.3 billion, tagged “Sustaining Momentum,” some of our well meaning friends have raised concerns about its feasibility and effectiveness. Presented by Governor Alex Otti, the budget represents a 30% increase from the 2024 budget of ₦524 billion. Some of the concerns expressed are: Lack of sectoral analysis, they claim that the budget fails to provide a sectoral breakdown, making it difficult to understand how funds will be allocated to various sectors such as education, healthcare, and infrastructure. Secondly, they emphasized that there are Unclear assumptions, arguing that the government has not disclosed basic assumptions about oil benchmarks, expected revenue from oil, and exchange rates, which are crucial for understanding the budget’s viability. I was shocked to read that the Abia state projections had Overambitious IGR growth, by projecting 213% growth in Internally Generated Revenue (IGR) to ₦100.6 billion as unrealistic, given the current monthly IGR of ₦1.1 billion. Not minding some sterling lines of thoughts embedded in the budget, our friends frowned at proposed borrowing as Excessive, owing to the plan to source ₦364.1 billion, representing 51% of the budget, describing it as alarming, especially when compared to other states like Lagos, Enugu, and Ogun, which have more modest borrowing plans. Their experts lampooned Otti’s efforts at resource allocation as Inefficient, citing his proposal to build reading centers and libraries in all 184 wards, at a cost of ₦14.6 billion. They suggested that it could be more efficient if existing infrastructure is utilized.
The 2025 Abia State budget has effectively addressed all these concerns and more and I want to sustaintiate it. As regards sectoral allocation, Internally Generated Revenue (IGR) growth, and borrowing. Notably, the budget allocates ₦150.8 billion to education (20% of the total budget), ₦70.4 billion to healthcare (9.4%), and ₦120.2 billion to infrastructure development (16%). These allocations demonstrate a commitment to sectoral development.
Regarding IGR growth, the budget projects a 25% increase in IGR, from ₦47 billion in 2024 to ₦58.75 billion in 2025. This growth is driven by innovative revenue streams, including a 30% increase in tax revenue (from ₦10.5 billion to ₦13.65 billion) and a 20% increase in non-tax revenue (from ₦15.5 billion to ₦18.6 billion).
To address concerns about borrowing, the government has reduced its borrowing plan from ₦364.1 billion (51% of the budget) to ₦275.6 billion (36.7%). This reduction is achieved through a combination of increased IGR and improved fiscal discipline. Furthermore, the budget allocates ₦50 billion towards debt repayment, ensuring that the state’s debt burden is managed effectively.
Comparing Abia State’s budget to other states reveals significant improvements. For instance, while Lagos State’s budget allocates 12% to education, Abia State allocates 20%. Similarly, Enugu State’s budget allocates 8% to healthcare, whereas Abia State allocates 9.4%. These comparisons demonstrate Abia State’s commitment to sectoral development and fiscal responsibility.
The budget’s focus on human capital development is evident in its allocation of ₦10 billion to skills development programs and ₦5 billion to entrepreneurship support initiatives. These investments are expected to yield long-term benefits, driving economic growth and reducing unemployment.
To ensure transparency and accountability, the government has established a Budget Monitoring and Evaluation Committee, which will provide quarterly reports on budget implementation. Additionally, the budget is available online, allowing citizens to access and review the document.
In conclusion, the 2025 Abia State budget has effectively addressed concerns regarding sectoral allocation, IGR growth, and borrowing. Through data-driven decision-making and fiscal discipline, the government has demonstrated its commitment to responsible governance and sustainable development.
Dr Chukwuemeka Ifegwu Eke writes from the University of Abuja Nigeria.
