How Expert Views Osun Resources Allocation

By Kazeem Mohammed

Of recent, the government of the State of Osun has been re-emphasising its commitment to welfare of workers and pensioners through payment of salaries, pensions and allowances, to the tune of about N200 billion, equivalent of 77 per cent and N60 billion, equivalent of 23 per cent on developmental project in the last seven years.

The justification came on the heel of some criticisms that the Governor Rauf Aregbesola-led administration has not been paying adequate attention to the welfare of workers and pensioners, a situation that had triggered series of protests particularly by pensioners in the state.

The government since its assumption of office in 2010 had been meeting its obligations on salaries, pensions and allowances, until sometimes in 2014 when the economic situations in Nigeria not peculiar to the state of Osun forced the administration to adopt modulated salaries structure for its workforce, subject to agreement with labour unions, rather than disengaging workers from service.

An Economic Historian from the Department of History, Obafemi Awolowo University, Ile-Ife, Dr Tunji Ogunyemi said, if government has actually spent only N60 billion on Capital Expenditure (CAPEX) and N200 billion on recurrent expenditure, which comprises of salaries, pensions and allowances, it amount to investing only 23 per cent of total government expenditure on CAPEX.

He said, “I think this is not bad at all and I just wonder why people who should know are still complaining about the government on its commitment to salaries, pension and allowances.

“Is it that they are not expecting government to spend at all on creation of wealth and expanding the infrastructural base of the economy, which is the direct meaning of capital expenditure?

“Or, are people saying that the government should spend everything it has on consumption? I think this is rather unfortunate. You cannot do governance without CAPEX. Those who complain today of this ratio of allocation will praise the government later for being farsighted.

According to him, there can and should be judicious balancing of the recurrent and the capital expenditure (CAPEX) which would go into the production of basic infrastructure, saying “In economies that grow all over the World, CAPEX is always greater than recurrent. But in our climes here, the recurrent which is the expenditure on consumption except in few states such as Lagos and Delta, is always greater than CAPEX.

“My suggestion is that CAPEX should not be less than 30 per cent of the total expenditure, while the recurrent should take the remainder 70 per cent. By so doing, government would at least, have a cushion for providing for growth and expansion in basic infrastructure which is actually the key to development and industrial take-off.

“Make no mistakes about it, no nation grow with the kind of lopsidedness in favour of the recurrent expenditure such as we have in Nigeria today. It is the CAPEX that grows the economy not recurrent expenses except of course if you have a very productive economy which is not the case in our situation”, Ogunyemi stressed.

He then suggested that the next budget for Osun should be along the lines of trying to allocate not less than 30 per cent of the total expenditure to the CAPEX and 70 per cent to recurrent.

Ogunyemi also appealed that the Federal Government should implement the Oronsaye report to the letter to ensure proper allocation of resources in the country.