How Realistic is Ondo’s N698bn 2025 Budget of Recovery?

Fidelis David in this report, examines Ondo’s N698bn 2025 budget signed into an Act on Monday by Governor Lucky Aiyedatiwa.

No doubt, budgeting is one important economic policy instrument at the disposal of the government which is key to the attainment of the economic prosperity of the people.

Unfortunately, over the years, billions are budgeted yearly to improve the living standard of the residents of Ondo state through an increase in output but  these dreams have been elusive perhaps due to the failure of the government to implement the content of the budget to the letter.

Between year 2020 and 2024, Ondo had a budget proposal of over N1. 434trn. Specifically, 2020 budget proposal tagged “Budget of Growth” was  N177.9bn, 2021 “Budget of Hope”: N159.79bn,  2022 “Budget of Economic Re-Engineering” : N191.638bn, 2023 “Budget of Shared Prosperity”: N313.145bn while 2024 “Budget of Economic Resilience” was N492.045bn.

Particularly, the primary purpose of budgeting is to provide control over the revenues and expenditures of the government at all levels.

For Ondo State, this, perhaps best explained signing of the 2025 Appropriation Bill totaling N698.659bn into law. The budget was increased by N43,429,496,000 above the N655,230bn initially proposed by Governor Lucky Aiyedatiwa when he presented the 2025 “Budget of recovery” to the Assembly.

The budget allocates N433bn (62.06%) to capital expenditure and N265bn (37.94%) to recurrent expenditure.

Speaking at the signing ceremony, at the Exco Chamber, Governor’s office in Akure, the state capital, Aiyedatiwa said the event marked a significant step at fulfilling the promises he made to the people of Ondo State during the electioneering processes.

Governor Aiyedatiwa described the 2025 fiscal plan as a bold and strategic step towards rebuilding the state’s economy and addressing critical socio-economic challenges.

According to him: “This is a critical moment for our administration, one that marks a significant step towards fulfilling the promises we made to the people of Ondo State during the electioneering processes.”

Highlighting the administration’s priorities, Governor Aiyedatiwa noted that the 2025 budget allocates significant resources to agriculture, infrastructure, education, healthcare, security, and social welfare. He described these allocations as investments in the lives of the people.

“These allocations are not just numbers on a page; they are proposed investments in the lives and well-being of every resident of our State. It is through these resources that we will continue to create opportunities, improve livelihoods, and build a sustainable future for ourselves and generations to come,” he stated.

Earlier in an address during the presentation of N655.230bn budget proposal for 2025 Fiscal year to the state House of Assembly, Aiyedatiwa said expectedly, the  budget captured the planning, decisions, and policy actions that will be executed to achieve the his fresh mandate’s agenda tagged- “O’ Datiwa, O’Dirorun” which literally means “Our Ease”.

Overview of the 2025 Budget

The governor, while presenting the budget tagged “Budget of Recovery ” to the lawmakers during a plenary presided over by the Speaker of the House, Hon. Olamide Oladiji said, the projection for revenue of 2025 would largely be informed by some major macro-economic assumptions contained in the MTEF and Fiscal Strategy paper adopted by the secretariat of the Nigerian Governors’ Forum (NGF).

 “The 2025 budget has been appropriately christened Budget of Recovery.  The resolve of our administration to make life easy for our people is non-negotiable.  This is in line with our campaign slogan for the recently concluded Ondo State gubernatorial election of 16th November, 2024 in which we recorded an unprecedented victory in all the 18 Local Governments of the State.

“We are fully determined to explore the economic reform agenda of the Federal Government as encapsulated in the Renewed Hope Agenda of President Bola Tinubu, and the enormous goodwill and entrepreneurial enthusiasm of our people in the best possible way to record an economic upturn in the New Year. 

“In the outgoing year, our budget was christened Budget of Resilience.  Our people have demonstrated unwavering resilience and uncommon courage that had enabled us sail through despite all odds. We have therefore set for ourselves a path to socio-economic recovery in the 2025 Budget Of Recovery, with a bold resolve to break new grounds that will usher in prosperity for the good people of Ondo State.”

He listed the objectives and policy thrusts of 2025 Budget to include “achieve sustained food security; Increased investment in infrastructure; Refocused drive on Independence Revenue (IR) generation; Resilient Community Development Initiative; Facilitate social inclusion and social security and Diversification of the State’s economy.”

Aiyedatiwa further said the budget will be funded by Statutory Allocation – N28. 75bn (34.39%); Mineral Derivation – N21.250bn (3.24%); Independent Revenue – N40.500bn (6.18%)  VAT N71.559bn (10.92%); Exchange Gain – N50.000bn (7.63%); Ecological Fund – 5.000bn (0.76%).

Others are Electronic Money Transfer Levy – N5.001bn  (0.76%); Other FAAC Revenue – N60.000bn (9.16); Grants – 31.493bn (4.81%); Health Insurance – N4.250bn (0.65%); Roll Over Fund -143.166bn (21.85%) and  Financing -194.258bn (29.65%).

“As at last report on Multidimensional Poverty Index in Nigeria, Ondo State is the least multi dimensionally poor State in Nigeria at 27%. We will continue to pursue projects and programmes that will make the State maintain its leadership position and further reduce the percentage. One of such is the universal access to health facilities across the State. To this end, we are deploying more than N7 billion as intervention fund to upgrade and construct appropriate health facilities across the State”, Aiyedatiwa added.

Review of 2024 Budget of Economic Resilience

The 2025 budget proposal is higher than that of the total projected budget outlay for 2024 fiscal year which was N492.045bn.

The governor told the Assembly; “Mr Speaker, Honourable Members, you will recall that, the 2024 fiscal year started with a Budget tagged “Budget of Economic Resilience” with a total size of N395,257,000,000.00. Shortly after the budget was passed, the full manifestation of the effect of fuel subsidy removal and the floating of the exchange rate took inflation and energy cost to a record high, making the Budget almost inoperable.  By June, the Federal Government approved a new national minimum wage of N70,000 only which was not in the initial Budget.

“All these made the review of the 2024 inevitable. Hence, the 2024 budget was reviewed upward from N395.257 billion to N492.045 billion to reflect current economic realities. In the revised budget, the sum of N246,727,852,786.00 and N245,317,247,214.00 were allocated to Recurrent and Capital Expenditures respectively.  

“On the revenue side, Mr. Speaker, the cumulative revenue target as at the end of the third quarter of the year is N369,033,825,000.00.  It is heartwarming to note that the total actual receipts during the period was N352,099,200,847.65 which represents 71.56% of total budget performance level. It must however, be noted that this impressive revenue turnout is inclusive of a N51.200bn contra-entry debt negotiation deal with the Federal Government. 

“On the expenditure side, Mr Speaker, Recurrent Expenditure posts a formidable performance of N156.666bn against the year target of N246.728bn representing a 63.50% performance.  This is in spite of the fact that the New Minimum Wage was yet to be implemented.  By the end of the year when minimum wage would have been captured, recurrent expenditure would substantially increase.   

“Capital expenditure performance was limited by the very prohibitive inflationary pressure I mentioned earlier on. Some of the provisions in the initial budget became inadequate to procure the projects they were provided for.  Some contractors even stopped ongoing projects to be able to negotiate a competitive price for some of the projects, until all these bottlenecks were resolved with the revision of the Budget which unfortunately came very late. 

“Hence, capital expenditure only posted a N49.957bn representing an appreciable level of performance as at the end of the third quarter.  However, it is pertinent to note that the situation has changed considerably since the completion of the review of the budget.  More capital projects are already being implemented to ensure that the objective targets for the year are met.”

Annual Ritual of Unrealistic Expectations

In its reaction, the state chapter of the Peoples Democratic Party believed that the 2025 budget is an annual ritual of APC full of unrealistic expectations.

Speaking with THISDAY, the state Publicity Secretary Kennedy Peretei, said: “The budget is just like every other rituals meant to fulfill all righteousness.

“On ground, the people don’t feel anything, so what’s the use of the budget? Every year, they say they’ve budgeted some amount of money, but the people continually go hungry, the schools aren’t attended to, healthcare system is in shambles, our roads aren’t passable.

“So, what’s the use of the budget? For me, it’s meaningless. Just a ritual that they do every year, it has no practical implication for the people of Ondo State. The budget has meaning only if it has impact on the lives of the ordinary people which is meant for but this one is just figure for experts, economists. They should just address issues of well-being of the citizens. That’s when we know they’re doing budget, anything outside that just a waste of time” Peretei added.

It is often said that it is easier said than done because the gap between the budget and its initiation and full implementation to attain economic prosperity has been of serious concern to residents of the coastal state.

It is one thing to have a budget and another to implement the budget to the extent that it attains the goals of economic growth and development, thereby freeing people from the evils of wants, ignorance and exploitation.

Besides, it is cheering news that the Speaker of the State House of Assembly, Hon. Oladiji  noted that the state focus on holistic development is evident in the upward revision of the budget from N655.230 billion to N698.659 billion, reflecting the administration’s determination to meet the growing needs of the state and evidently, this underpins the synergy between the Executive and the Legislature in advancing the Aiyedatiwa’s development agenda.

However, all infrastructural projects promised to be completed in the 2025 Budget year must be given priority. More importantly is road projects across the state which include the 4.0km Akure – Oda Dual carriageway; the second flyover and junction improvement at Onyeagbulem – Shagari/Irese Road along Ilesha – Akure – Owo Expressway, Akure that spans approximately 570m; the 8.135km Dual carriageway from Oba Adesida (A Division) – Oba Osupa (Hospital) Road – Oluwatuyi – Ijoka (Oke Iya junction) with spur to Alafiatayo Roundabout and Idiagba Titun, among others.

However, to ensure the implementation of the 2025 budget, members of the State House of Assembly should carefully and meticulously review the budget proposal presented by the Aiyedatiwa, analyzing its contents, allocations, and projected outcomes in order to identify areas of concern, inconsistencies, or unrealistic projections.

More importantly, the Hon. Oladiji-led Ondo state House of Assembly must ensure that the budget implementation process is transparent, with clear reporting and monitoring mechanisms while members must prioritize regular oversight and monitoring to ensure that the budget is implemented effectively, efficiently, and in the best interests of the people of the sunshine state.