Oborevwori’s Budget Of Long-Term Infrastructural Development

Governor Sheriff Obor­evwori’s 2025 budget proposal for Delta State, presented to the State House of Assembly, reflects a bold and strategic approach to gover­nance, with a focus on sustainable development and infrastructural growth. The budget is pegged at N936 billion, with a notable 62.75 percent allocated for capital ex­penditure and 37.25 percent direct­ed towards recurrent expenditure. The 62.75 percent of the budget al­location to capital expenditure is unprecedented and a remarkable improvement in resource alloca­tion, a far deviation from what is obtainable by states and federal government in recent times in Nigeria. This financial blueprint provides key insights into the Gov­ernor’s policy priorities and the direction of his administration. Below is an in-depth analysis of the proposed budget.

1. High Emphasis on Capital Expendi­ture (62.75%)

A defining characteristic of the proposed budget is the sub­stantial allocation to capital ex­penditure, which amounts to N587 billion. This is a clear signal that Governor Oborevwori’s adminis­tration is prioritizing long-term infrastructural development over short-term operational spending. Here are the critical implications of this allocation:

a. Infrastructure as a Key Growth Driver: The budget’s focus on capital expenditure re­flects the Governor’s intention to revamp and expand Delta State’s infrastructure, including roads, schools, healthcare facilities, and power supply systems. A signifi­cant portion of the capital allo­cation will likely go towards im­proving road networks, which is critical for facilitating commerce and improving access to rural areas. Roads in both urban and rural areas are key to unlocking economic opportunities by en­suring better transportation and trade routes.

b. Urban and Rural Develop­ment: The proposed budget also suggests that urban renewal projects will receive a consider­able portion of the capital funds. Additionally, rural development will be a focal point, ensuring that underserved communities receive vital infrastructure up­grades, such as rural roads, new markets, health centers, and ed­ucational facilities. The aim is to reduce the urban-rural disparity in terms of service delivery and provide a more equitable distri­bution of resources.

c. Industrialization and Di­versification: The Governor’s emphasis on capital expenditure points toward a strategic drive for economic diversification, moving away from the state’s over-reli­ance on oil revenues. Investments in a green economy, agro-process­ing zones, industrial parks, and initiatives to improve local man­ufacturing are expected to be cen­tral to the capital projects.

The allocation also suggests an intention to boost the state’s industrial base, creating new jobs and ensuring that the economy is resilient to fluctuations in oil prices.

2. Recurrent Expenditure Focus (37.25%)

While the capital expendi­ture allocation is impressive, the N348.7 billion earmarked for recurrent expenditure reflects a more traditional approach to government spending, ensuring the effective running of the state’s public services. Here are some in­sights into this allocation:

a. Sustainable Public Service: A significant chunk of the recur­rent expenditure will be devoted to salaries and wages for civil servants, teachers, and other public sector workers. This pro­vision is also anticipated to cov­er for the implementation of the new minimum wage to workers, which had started in October. The Governor’s commitment to paying salaries promptly aligns with his administration’s goal of maintaining a stable and efficient public service sector. This is es­sential for fostering a productive civil service that can execute gov­ernment policies effectively.

b. Social Welfare and Social Services: The recurrent expen­diture also encompasses funding for ongoing social welfare pro­grams, such as poverty alleviation schemes, youth empowerment ini­tiatives, and healthcare services. This portion is particularly im­portant as it addresses the imme­diate needs of vulnerable groups, such as women, children, and the elderly, ensuring that they benefit directly from the state’s policies.

c. Security and Law Enforce­ment: Security remains a key concern in many Nigerian states, and Delta is no exception. The allocation for recurrent ex­penditure includes funding for security agencies and law en­forcement, which will be crucial in maintaining peace and order across the state. Strengthening security infrastructure is vital to attracting both local and foreign investments, as safety is a prima­ry concern for economic activity. Just recently, Governor Sheriff Oborevwori donated 31 brand new hilux as operational vehi­cles to the Nigeria Police Force to fight insecurity in the state. This is part of the measures to reduce the rate of crimes in the state aimed at promoting econom­ic activities.

3. Strategic Policy Goals Underpin­ning the Budget

a. Economic Diversification: Governor Oborevwori’s focus on a robust capital expenditure al­location signals his administra­tion’s commitment to diversifying Delta State’s economy beyond oil. By investing in a green economy, agriculture, manufacturing, and services, the Governor aims to build a more sustainable and re­silient economy.

The focus on a green economy as the main driver is the current administration’s vision that aligns with global shifts toward climate-conscious governance and positions Delta as a potential leader in carbon credit markets. The state’s emphasis on the green economy is expected to have far-reaching implications for both its environmental sustainability and economic growth.

In the 2025 budget, Governor Oborevwori has committed to transforming Delta State into a green economy, leveraging the power of sustainable develop­ment and environmental preser­vation. The green economy refers to initiatives that foster sustain­able growth by reducing environ­mental impacts while generating economic returns. The Carbon Credit Initiatives is one of the most innovative aspects of the 2025 budget, which would serve as a central component of Del­ta State’s environmental policy. Carbon credits represent a key mechanism for trading emis­sions reductions and incentiviz­ing businesses and governments to lower their carbon footprint. The state’s policy to engage in carbon trading could open up new revenue streams, diversify its economy, and contribute to global climate goals.

The development of agro-pro­cessing zones and industrial parks will also not only create jobs but will also help position Delta as a major player in the non-oil economy of Nigeria.

b. Infrastructure as an Eco­nomic Enabler: The substantial budgetary allocation to infra­structural development can be seen as a deliberate strategy to create a strong foundation for economic growth. Improved in­frastructure will facilitate the movement of goods and services, making Delta State more compet­itive in attracting investments. Whether through improved road networks, power infrastructure, or education and health facilities, these capital projects will address both current and future challeng­es of urbanization and industri­alization.

c. Youth Employment and Em­powerment: Governor Oborev­wori has also placed significant emphasis on programs that will enhance youth employment, es­pecially in sectors outside of oil. The focus on capital expenditure that includes the development of vocational centers, training hubs, and digital skills develop­ment programs indicates that the state is taking proactive steps to empower the youth, thereby re­ducing unemployment and social unrest.

4. Challenges and Potential Risks:

While the budget is ambitious and well-aligned with the state’s developmental needs, there are potential challenges and risks as­sociated with its implementation.

a. Dependence on Federal Allocations and Oil Revenues: While the state is making efforts to diversify, Delta remains heav­ily dependent on federal alloca­tions, which are subject to the fluctuations in global oil prices. Any significant downturn in oil revenues could impact the fund­ing for both capital and recurrent expenditures, especially in terms of funding long-term projects.

b. Timely Implementation of Capital Projects: The scale of pro­posed capital projects demands a robust project management sys­tem. One potential risk is the de­lay in the execution of infrastruc­ture projects, which has been a common issue in many Nigerian states. Delays or cost overruns could undermine the intended impact of the budget, particularly in sectors like education, health­care, and roads.

c. Inflation and External Eco­nomic Factors: Inflation and ris­ing construction costs could also affect the actual implementation of the proposed capital expen­diture. The budget will need to be flexible enough to adjust for unforeseen economic shocks, such as fluctuations in the cost of building materials, transpor­tation, or labor.

Conclusion

Governor Sheriff Obor­evwori’s 2025 budget is a for­ward-looking financial plan with a clear emphasis on infrastruc­tural development, economic di­versification, and social welfare. The high allocation for capital expenditure highlights the Gover­nor’s commitment to transform­ing Delta State into an economi­cally vibrant and industrialized region. While the budget holds significant promise, successful implementation will depend on effective management, timely execution of projects, and navi­gating the challenges of economic volatility.

*Egbabor writes from Asaba via em­majiri@gmail.com