On Wednesday, Governor Ademola Adeleke presented the 2025 budget estimates to the Osun State House of Assembly. The fiscal bill themed ‘Budget of Sustainable Growth and Transformation’ is totalled N390 billion, out of which N245 billion is earmarked for recurrent expenditure while N144 billion will service capital expenditure.
Of the N245 billion proposed for recurrent expenditure, N102 billion will fund salaries and allowances, as well as Pensions and Gratuities, while the balance of N145 billion is set aside. Here is where I think many are confused, and have expectedly, raised concerns. N145 billion is a whole lot of money and not clearly stating the purpose for which it was set aside can truly be concerning.
The very reason why government, especially in a democracy is required to present a budget for legislature scrutiny and approval, is to give citizens an idea of how their fund will be expended. And, looking at the interest that the 2025 budget presented by Governor Adeleke has attracted among Osun people, it is clear that the people are paying more attention to finances. That is a good thing.
Now, to the N145bn estimate, which seems to be the basis of concerns. Nothing is happening to that provision and I will try as much as possible to show this. I’m sure many will recall that in July this year, President Bola Tinubu announced the agreement of a new minimum wage and forwarded a bill to the National Assembly to pass it to law.
By the new law, the minimum wage in the country is N70,000 and no longer N30,000 it was before. Although, many states have adopted between N70,000 and N85,000 as minimum wage in their respective states, but utilisation will mostly be next year. In Osun, in particular, announcement of a new minimum wage is imminent as the committee tasked to firm up template is almost done.
The significant change that comes with the new minimum wage, which could be as high as 113%, is one of the expenses that the N145bn set aside would fund. Let us, for a moment, assume that Osun settled for the N70,000 in the law as minimum wage, that will mean at least, N40,000 addition to the existing wage bill per workers, and spreading this to the size of Osun civil servant population will turn out huge.
An increase in minimum wage will also reflect bonuses and allowances that will go to civil servants in the 2025 fiscal year. Take, for instance, leave bonus which every workers are entitled to in a year. If a worker on the old minimum wage of N30,000 receive N15,000 as leave bonus, he or she will get nothing less than N35,000 as leave bonus with a new minimum wage, representing at least N20,000 increase and this will also be taken care of by the N145bn recurrent spending estimate set aside.
Another spending that will benefit from the N145bn is the adjustment in the take-home of pensioners. Just like workers, the implementation of a new minimum wage will reflect on pensioners benefit and this was contemplated for in the proposal for next year’s funding.
Away from this, is the scheduled recruitment of teachers in public schools. Although, the process for the recruitment has been concluded, the decision on minimum wage appear to have stalled the issuance of employment letters to successful candidates. Notwithstanding this development, the government factored their salary and allowances in the 2025 budget, which will be drawn from the N145bn recurrent expenditure set aside.
Even more, is the engagement of the Imole Corp, a youth volunteering scheme, which will most likely take off next year. The scheme will engage tens of thousand youths in series of community works, which spread across education, health and transportation sector. Benefits of volunteers among other needs are factored in the N145bn recurrent expenditure set aside in the 2025 budget presented by Governor Adeleke.
And lastly, the provision for debt servicing is factored in the N145bn recurrent expenditure set aside. Last year, debt servicing was estimated to gulp N27 billion, and with the prevailing exchange rate and the attendant implication on foreign debt repayment, it could go as high as N30 billion in the 2025 fiscal year. This will be funded from the N145 billion recurrent expenditure set aside. Half salary payment for active workers and pensioners owed by the previous APC administration will also be funded from the N145bn.
In all, we must understand that budget proposal is basically an expectation, not that the money is on ground to spend. The N145bn, as well as the entire budget vote of N390bn, is an estimate of what the government believes could handle the highlighted expenses so that things could run seamlessly.
This is quite straightforward and does not give a basis for the usual political pandering that some have obviously shown on the issue. Since assuming office, Governor Adeleke has been transparent in handling public fund, ensuring judicious use of accruals for the good of the people as manifest in the remarkable strides recorded in the last 23 months. Nothing has changed or will change.
● Sarafa Ibrahim is a Special Assistant to the Osun State Governor on Print Media and writes from Osogbo, Osun State.