"How Effective is Budgeting in Nigeria? Unveiling the Realities and Strategies"

A few years back, during one of Mr. Peter Obi 's speeches, he made an interesting point. According to him, if Bill Gates and a few other billionaires were in Nigeria, they might not have achieved the same level of success. It got me thinking, and when I have the chance to meet Ndubuisi Ekekwe , I'll ask him about it.

Before I hit forty (40), I faced some challenges when it came to managing my finances. And no, it wasn't just about reckless spending. My issue was that I often invested in businesses I thought would thrive, but unfortunately, I ended up losing my hard-earned money due to poor investment choices.

To prevent further losses, I decided to educate myself on personal finance management. One valuable resource was a book authored by a fellow Nigerian, Japheth Jev , along with other noteworthy books I discovered online.

Among the concepts emphasised in these texts, budgeting took centre stage. I promptly adopted a Microsoft Excel template to help me create budgets effectively.

So, in 2021, I began diligently working with budgets. On weekends, following the supply chain methodology, I entered actual figures to compare them with my budgeted amounts, aiming to refine my financial management skills.

Unfortunately, I eventually reached the disappointing conclusion that long-term budgeting in Nigeria is a challenging endeavour. Initially, I thought it might be my failing, but after consulting with the accountants at our office, I discovered that only two months out of the entire period from 2021 to 2022 had accurate budgets.

Allow me to provide a few examples. Picture budgeting for diesel expenses at 350 Naira per litre for the year 2021, only to face skyrocketing prices of 900 Naira per litre. For those familiar with logistics, you know that this increase in transportation costs ripples through the entire economy, impacting prices across the board.

Even in our training plans, we budgeted flight costs at 25,000 Naira but later discovered they had surged to 60,000 Naira. And when you have over twelve people scheduled for training, you can imagine the strain it puts on the budget.

Such scenarios are all too common in Nigeria, leaving me sceptical about the effectiveness of long-term planning under these circumstances.

Now, one might think I completely abandoned budgeting and adopted a reactive approach to financial management. That's not the case. Budgeting remains important, but the implementation had to adapt to the realities on the ground.

For areas where I knew the variables were relatively stable, I took a long-term approach. For example, I calculate that I need 75,000 Naira monthly for electricity bills at home. However, when the government suddenly announced a 40% tariff increase within a few weeks, I had to find a way to mitigate the challenge.

So, I decided to purchase 500,000 Naira worth of electricity for the year, as I hadn't factored in an additional electricity budget. Sometimes I don't have the cash upfront, but I manage by borrowing the sum from a friend at a 5% interest rate. Surprisingly, it's still cheaper than paying 105,000 Naira later to meet my electricity needs.

There are times when I wish I had a fuel stockpile to deal with the unpredictability of this country.

But Nigeria won't break me. Do not let it break you either.

Do you have any personal experiences or insights on budgeting that you'd like to share? I'm turning forty (40) now, and I'm eager to learn better strategies for managing life's uncertainties.

Shalom.