Fortunes & Foresight | Ogun’s Fiscal Journey | 2025 Trillion Naira Budget By Odiawa Ai

As we journey through Nigeria’s fiscal landscape, we reflect on a remarkable evolution that began in 2011 when the national budget first surpassed the trillion-naira mark. That year, the estimated budget of N4.697 trillion came with a hefty deficit of N1.285 trillion, spotlighting the challenges of balancing growth and sustainability. This milestone, however, was a beacon of hope for Nigeria’s economic aspirations.

A decade later, and Lagos proudly claimed the title of the first Nigerian state to secure a trillion-naira budget, with Governor Babajide Sanwo-Olu signing the N1.168 trillion Appropriation Bill into law. This monumental achievement set a precedent that inspired others.

In 2023, Ogun State ventured into this elite club with an impressive budget estimate of N1.054 trillion. Joining Lagos and Rivers, Ogun’s ambitious budget reflects a commitment to development and economic revitalization, promising new opportunities for its citizens.

As Ogun forges ahead, the journey is not just about numbers; it's about the vision and foresight that will shape the state’s future. The adventure continues, and we eagerly anticipate the transformative impact of this trillion-naira budget on Ogun's landscape.

The 2025 budget, aptly titled the "Budget of Hope and Prosperity." This ambitious financial blueprint is a reflection of our commitment to fortifying the strides made over the past five years while propelling us into a future brimming with possibilities. With a staggering trillion-naira budget, we are gearing up to tackle longstanding infrastructural challenges, bolster social welfare systems, and usher in an era of robust economic growth.

The 2025 budget marks a significant leap from previous years, illustrating our unwavering ambition to elevate the quality of life for all residents. Key allocations have been strategically made across vital sectors that are essential for nurturing sustainable development. Education takes the lead with an allocation of N177.835 billion, recognizing that empowering our youth is paramount for future success. Health services will receive N134.538 billion, ensuring that our citizens have access to quality healthcare. Infrastructure development is set to receive a substantial N284.4 billion, which will pave the way for enhanced connectivity and access to essential services. Finally, housing and community development have been allocated N66.382 billion to foster inclusive growth.

The state government is particularly focused on revamping our infrastructure. With over 600 kilometers of roads completed in the governor’s first term, we are now turning our attention to critical projects such as the reconstruction of the Lagos-Ota-Sango-Abeokuta road and the Akute-Ijoko road. These projects are not just about laying asphalt; they are about creating pathways to opportunity and prosperity for all Ogun residents.

But we are not stopping there. The Gateway Agro-Cargo International Airport, located in Ilishan-Remo, is nearing completion and promises to be a game-changer for the economy in Ogun State. This world-class facility will not only enhance agricultural exports but also create a multitude of job opportunities, positioning Ogun State as a significant player in the global marketplace. The future of agricultural trade is bright, and we are ready to soar!

In the health sector, Ogun State is on the brink of completing the 250-bed specialist hospital in Abeokuta, a project that had previously languished in neglect. Under a strategic concession agreement with private sector partners, this facility will provide cutting-edge healthcare services to our citizens, reinforcing our commitment to their well-being.

Ogun State stands at a crossroads, ready to leverage its newfound financial muscle. The government’s ambitious trillion-naira budget is underpinned by a commendable increase in the Internally Generated Revenue (IGR) profile, which has soared to N240.24 billion in 2024. This remarkable growth is not merely a stroke of luck; it is the result of strategic efforts aimed at attracting investors, enhancing the ease of doing business, and fostering industrialization. By reducing dependency on federal allocations, Ogun aims to build a more stable financial foundation for its developmental projects.

However, with great ambition comes great responsibility. The Debt Management Office (DMO) has raised alarms regarding the debt profiles of several Nigerian states, with Ogun being one of those currently facing significant challenges. As of June 30, 2024, Ogun's debt levels are among the highest in the nation, alongside states like Rivers, Cross River, Bauchi, and Kano, all of which have accumulated substantial external debts to fund extensive infrastructure projects and vital public services.

The DMO regularly conducts Debt Sustainability Analyses (DSA) to assess states’ capacity to manage their debt levels effectively. Recent findings reveal a stark contrast in how different states handle their financial responsibilities. While states like Rivers and Lagos boast sustainable debt profiles backed by robust internally generated revenues, others, such as Cross River, Imo, Osun, and Plateau, struggle to maintain their debt sustainably. This disparity highlights the critical need for Ogun to carefully manage its financial resources and avoid the pitfalls of increased debt and economic instability.

To sustain the momentum of growth envisioned in the trillion-naira budget, Ogun State is implementing robust strategies for efficient revenue collection. By broadening the tax base and improving compliance, the government is laying the groundwork for a more resilient financial environment. The recent tax reform laws also promise to enhance revenue generation by simplifying tax procedures, reducing evasion, and ensuring that all eligible entities contribute their fair share. The expectations surrounding these reforms are high, signaling a collective commitment to financial prudence and accountability.

Also at the heart of this transformative journey lies the concept of public-private partnerships (PPPs). By forging strong collaborations with the private sector, Ogun State can attract investments that will catalyze its development initiatives. These partnerships harness the expertise and innovation of private entities, ensuring that projects are delivered efficiently and effectively. The potential for large-scale project implementation through these alliances is immense, positioning Ogun State as a beacon of sustainable development.

Economic diversification is another cornerstone of its vision. Ogun State is poised to create a more resilient economy by investing strategically in agriculture, industry, and technology. This diversification is not just a buzzword; it is a deliberate strategy to reduce its dependence on unpredictable federal allocations. By building a stable economic base, the Gateway State can safeguard its future against the uncertainties that often plague its national economy.

However, as it navigates this thrilling expedition, it must remain vigilant about the challenges that lie ahead. The fluidity of Nigeria’s political economy presents a formidable obstacle. Fluctuations in oil prices, volatile exchange rates, and rising inflation can significantly impact its revenue and expenditure plans. This uncertainty is a reminder that while it dream big, it must also prepare for the unexpected.

The reliance on federal allocations adds another layer of complexity to its journey. The variables affecting these allocations are often beyond our control, underscoring the necessity for prudent financial management. To achieve its budget goals, it must maintain financial stability through diversified revenue streams. This approach will not only fortify its fiscal health but also empower it to invest in critical sectors that drive growth and innovation.

Moreover, the specter of debt sustainability looms large. A considerable portion of its budget is earmarked for debt servicing, which poses a risk to its long-term financial health. High debt levels could stymie its ability to invest in transformative projects and create unnecessary burdens for future generations. To navigate this precarious path, it must adopt effective financial management practices and exercise prudence in our borrowing strategies.

The Promise of Big Budgets

Big budgets are not merely numbers on a ledger; they hold the potential to transform lives. When deployed wisely, they can act as a catalyst for economic growth, stimulating job creation and boosting consumer spending. Imagine a vibrant Ogun State, where infrastructure flourishes, public services such as healthcare, education, and security are robustly funded, and citizens feel the tangible benefits of government investment.

With the right focus, a trillion naira can support groundbreaking technologies and innovations that enhance productivity and competitiveness. It can pave the way for social welfare programs that address the pressing needs of vulnerable populations, alleviating poverty and improving quality of life. Additionally, a substantial budget can bolster environmental sustainability initiatives, ensuring that its growth does not come at the expense of the planet but rather paves the way for a sustainable future.

The Reality of Multidimensional Poverty

Yet, as we delve deeper, there is need to confront the stark reality of multidimensional poverty that affects 63% of Nigerians, according to the National Bureau of Statistics (NBS). In Ogun State, the challenges are palpable. The Gateway State ranks lower on the South West indexes, grappling with significant deprivations in sanitation, healthcare, food security, and housing. This is not just a statistical anomaly; it is a call to action.

Addressing these issues requires more than just lofty figures in a budget document. It demands a high sense of responsibility, decency, inclusiveness, and openness from its leaders and stakeholders. The journey ahead is not about throwing money at problems but about strategically deploying resources to make a lasting impact.

The Path Forward: Accountability is Key

As it navigates this ambitious financial landscape, effective management and accountability must be at the forefront of its efforts. The risks of misallocation and increased debt burdens are real and cannot be ignored. Budget deficits can lead to a vicious cycle of debt that stifles growth and limits future investments in crucial areas.

To maximize the benefits of this trillion naira budget, we must foster a culture of transparency and inclusivity. Engaging communities in the budgeting process, prioritizing their needs, and ensuring that funds are utilized for the intended purposes will be vital. We must hold ourselves accountable not just to the figures in the budget, but to the lives that these figures represent.

The Financial Landscape: Navigating the Challenges

With the government accumulating deficits, the financial strain on Ogun State cannot be understated. Funds that could have been allocated for essential developmental projects are increasingly diverted to debt servicing. This misallocation hampers growth, stifles investment, and raises the cost of living for citizens. As the budgetary pressures mount, the risk of higher interest rates looms large, which could deter both private and public investments, ultimately stalling economic advancement.

Governor Dapo Abiodun has acknowledged these challenges, emphasizing the importance of a tripartite agreement. His commitment to focused governance and creating a favorable environment for public-private partnerships is foundational to fostering enduring economic development. Both the governor's vision and the state's financial realities underscore the critical need for transparency, accountability, and public engagement in the journey ahead.

The Role of the House of Assembly

The Ogun State House of Assembly plays a pivotal role in this narrative. As the body responsible for scrutinizing and passing the Appropriations Bill, its diligence in overseeing the implementation of the trillion-naira budget is crucial. The Assembly must ensure that every naira is spent wisely and transparently, holding the executive accountable for its promises. This collaboration between the legislature and the executive can pave the way for effective governance and sustainable growth.

Empowering Citizens through Advocacy

Civil Society Organizations (CSOs) are integral to this process. Their active advocacy, monitoring, and evaluation efforts can empower citizens, ensuring that the government remains accountable to the people. By promoting citizen participation through periodic sensitization and briefings, CSOs can create a robust framework for transparency and engagement. The citizens of Ogun State deserve to be informed and involved as their government embarks on this ambitious fiscal journey.

Looking Ahead: A Call to Action

As Ogun State steps into this new era with a trillion-naira budget, the collective responsibility lies with all stakeholders government, legislature, civil society, and citizens. The path to prosperity is fraught with challenges, but with a commitment to transparency, accountability, and collaboration, Ogun can transform potential obstacles into opportunities for growth.

On a conclusive note, Ogun State stands at the threshold of a remarkable journey fueled by an ambitious trillion naira budget. With enhanced VAT revenue, strategic public-private partnerships, and a commitment to economic diversification, it has the tools to carve out a prosperous future. Yet, it must remain aware of the challenges that accompany such aspirations. By embracing financial prudence and fostering resilience, it can ensure that its dreams are not just visions, but realities.