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Udoma: Recurrent Burden, Dwindling Revenue Make Full Implementation of Capital Budget Impossible

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  • Udoma: Recurrent Burden, Dwindling Revenue Make Full Implementation of Capital Budget Impossible

The Minister of Budget and National Planning, Udoma Udo Udoma has explained that the federal government had been unable to achieve full implementation of the 30 per cent capital components of the 2016 and 2017 budgets because of high recurrent burden and dwindling revenue.

In an interview, Udoma said when the Buhari administration emerged in 2015, it inherited a budget with a capital component of 16 per cent from the previous government.

Udoma said, “We committed to take it up to 30 per cent, and so in 2016, it was 30 per cent and in 2017, it was 30 per cent. It has not been easy to achieve that 30 per cent because recurrent is very high. The major part of it is salary and some overheads. We can’t cut down the overheads – salaries and pensions; that’s the reason.

“The only way we can bring it down, which we will like to do, is to take up revenues. Then, what will happen is as a percentage of the budget, you can now have a much higher percentage in terms of capital. That is why revenue is so important because we don’t think it is right to embark on retrenchment.”

Reminded that the Oronsaye panel had recommended the rationalisation of some agencies and departments of the federal government as a cost-cutting measure, Udoma said: “In the short-term, the government does not believe that we should retrench. So, I believe that when the economy begins to improve, we will be able to look at some of those issues, and I think the president is very concerned about that.

“He’s not the type of person who can, after advocating for employment at the federal level, now throw people out. So, he believes that we should try and weed out any fake claims but any real claims should be paid. When we are growing at 7, 10 per cent, then there will be expansion of the economy, there will be so many opportunities for the people.”

On the delay in the release of funds for capital projects in the 2017 Budget, the minister explained that the delay arose because a major chunk of the capital vote was to be funded by borrowing, with some of that to be sourced internationally.

He noted that the approval of the National Assembly had to be sought, adding that until the approval was secured recently, borrowing could not commence.

Udoma said it was after the approval that government officials embarked on a road show abroad to float a Eurobond for the funds.

He pointed out that in spite of these challenges, the current administration had done well in terms of capital projects, as over N1 trillion was released in the 2016, a record he said, previous administrations could not achieve.

Udoma said: “We are working closely with the National Assembly. For instance, in the start of 2016, we released over N1 trillion capital vote. So, we have actually done very well compared to the previous administrations in terms of the amount released. So, this year, the budget year started in the middle of June. For a budget that has not run for six months (the budget that was passed is valid for one year) and to achieve that level of implementation on the capital and the recurrent is good.

So far, the federal government has released N450 billion of the capital vote in the 2017 Budget with another N750 billion to be released, bringing the total released to N1.2 trillion.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Lagos Eyes Investment Surge as Sanwo-Olu Unveils Growth Strategy

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Governor Babajide Sanwo-Olu of Lagos State is spearheading a bold push to attract significant investment inflow to boost the state’s economic growth.

During a Pre-Summit Investor Roundtable at the Africa Social Impact Summit (ASIS 3.0), held at Eko Hotels and Suites, the governor outlined strategic opportunities for investors.

With the theme “Invest Lagos – Investment Opportunities,” the summit was organized by the Sterling One Foundation in collaboration with the Ministry of Commerce, Cooperatives, Trade, and Investment.

Attended by business leaders, chambers of commerce, and industry captains, the event underscored Lagos’ potential as a hub for economic activity.

Sanwo-Olu highlighted Lagos’ positive economic outlook, citing an expanding population and sustainable infrastructure as key growth drivers.

Despite challenging business environments, the state’s economy has shown resilience, welcoming new investments while sustaining existing ones.

The governor emphasized reforms aimed at improving the ease of doing business. He mentioned that digitizing services had reduced bureaucratic hurdles, fostering a stable business climate.

Sanwo-Olu assured potential investors of the state’s commitment to creating a supportive environment that ensures returns and security for investments.

“In the last five years, Lagos’ GDP has grown by 50 percent,” Sanwo-Olu stated. “We aim to sustain this growth and ensure the gains of the past years are not reversed.”

Sanwo-Olu identified sectors ripe for investment, including transportation, tourism, health insurance, and waterways. He expressed the government’s dedication to advancing development plans in these areas.

Commissioner for Commerce, Cooperatives, Trade, and Investment, Mrs. Folashade Ambrose-Medebem, highlighted Lagos’ economic strides, noting that the state’s GDP had increased from N27 trillion to N41 trillion in five years.

She detailed strategic investments, particularly the allocation of N550.7 billion for infrastructure in 2024, and the commitment of N44.33 billion to food security initiatives.

Sterling Bank’s Managing Director, Mr. Abubakar Suleiman, pointed out that economic growth in Africa is often hindered by an unstable investment climate.

The summit aimed to build investor confidence by fostering trust and transparency in business environments.

“Lagos remains a leading destination for investors,” Suleiman noted. “The state provides clarity and access to markets, maintaining consistency in its investment strategies.”

Sanwo-Olu’s administration continues to focus on diversifying Lagos’ economy through strategic investments in various sectors.

The state’s proactive approach has positioned it as a global city and an emerging African financial center.

The governor’s initiative is expected to further solidify Lagos’ reputation as a prime investment destination, paving the way for sustained economic growth and development.

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Vice-President Harris Gathers Momentum as Democratic Nominee

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Vice-President Kamala Harris has secured the support needed to become the Democratic nominee for president.

This was after President Joe Biden announced he would not seek re-election, endorsing Harris as his successor.

According to CBS News, Harris has received endorsements from over 1,976 delegates, surpassing the threshold needed to clinch the nomination in the first round of voting at the Democratic National Convention (DNC) scheduled for August.

Delegations from at least 27 states have expressed full support, showcasing a strong backing across the nation.

In her address to campaign staff in Wilmington, Delaware, Harris expressed gratitude for the widespread support, adding that she committed to uniting the party and the country.

“We have 106 days until Election Day, and in that time, we have some hard work to do,” she stated.

Harris laid out her vision for America, contrasting it with that of her likely opponent, Donald Trump.

Speaking on the direction of the campaign thus far, she said “Our campaign has always been about two different versions of what we see as the future of our country. One focuses on the future, the other focuses on the past.”

She acknowledged the accomplishments of the Biden administration, highlighting her pride in serving as vice-president.

“My time serving as vice-president was one of the greatest honors of my life,” Harris said, underscoring her dedication to continuing the work they started.

In a phone call to his campaign team, Biden praised Harris, urging his supporters to rally behind her. “I’m hoping you’ll give every bit of your heart and soul that you gave to me to Kamala,” he said.

Despite stepping back from the race, Biden vowed to remain actively involved in supporting Harris and emphasized the importance of defeating Trump, calling him “a danger to this nation.”

Harris’s nomination marks a significant milestone, but challenges remain. The campaign will focus on addressing key issues such as healthcare, climate change, and economic inequality.

With millions of dollars pouring into her campaign since Biden’s announcement, Harris aims to capitalize on the momentum and build a coalition that appeals to a broad spectrum of voters.

As the DNC approaches, Harris is expected to formally accept the nomination, solidifying her position as the Democratic leader.

The coming months will be crucial as she works to unite the party and reach out to undecided voters. With her historic nomination, Harris stands poised to make a lasting impact on the future of American politics.

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President Declines Nomination, Endorses Harris for 2024

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In a significant political announcement on his X.com account, President Joe Biden has decided to forgo the opportunity to seek re-election in 2024, instead throwing his full support behind Vice President Kamala Harris.

The surprise move, shared with the public this morning, represents a pivotal moment in the Democratic Party’s journey toward the upcoming presidential election.

In his statement, Biden said that his choice to step aside is driven by a desire to concentrate on his remaining duties as President.

He expressed gratitude for the opportunity to serve alongside Harris, calling her selection as his Vice President in 2020 “the best decision” he has made. “My fellow Democrats,” Biden began, “I have decided not to accept the nomination and to focus all my energies on my duties as President for the remainder of my term.”

The President’s announcement signifies a strategic shift in the 2024 election landscape. By endorsing Kamala Harris, Biden not only aims to consolidate support within the party but also to set the stage for a unified front against former President Donald Trump.

“Today I want to offer my full support and endorsement for Kamala to be the nominee of our party this year,” Biden declared. “Democrats — it’s time to come together and beat Trump. Let’s do this.”

This endorsement comes as a surprise to many, given Biden’s earlier commitment to seeking re-election.

However, it reflects a broader strategic maneuver to ensure party unity and strengthen the Democratic position in the face of a formidable opponent. By focusing on Harris, Biden aims to leverage her growing popularity and political acumen to fortify the party’s chances in the upcoming election.

Kamala Harris, who has served as Vice President since January 2021, will now be thrust into the spotlight as the presumptive Democratic nominee.

Her campaign is expected to build on the legacy of the current administration while addressing key issues facing the nation.

The move also raises the stakes for the Republicans, who will need to prepare for a robust campaign from a seasoned political leader in Harris.

As the 2024 election cycle ramps up, Biden’s endorsement is likely to reshape the dynamics of the race, influencing both Democratic strategies and Republican responses.

The coming months will be critical as Harris and her team work to solidify their platform and rally support from voters across the nation.

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