Edo State economy is set to receive a boost in the coming year as the state government allocated N178 billion to capital expenditure (CAPEX) in the 2024 appropriation bill presented to the State House of Assembly on Tuesday. This allocation represents 55.63 percent of the total N320 budget currently before the assembly for approval.
The higher consideration given by the state government to capital expenditure follows the outstanding growth the Edo economy has recorded in the last seven years which saw its state gross domestic product grow by 140 percent from $10.6 billion in 2016 to $25.8 billion in 2023, indicating that in terms of GDP, Edo State would have been the 20th biggest country in Africa if it were to be a country, as its GDP will be bigger than 35 countries on the continent including Sudan, Guinea, Mozambique, Benin Republic, Mali, Burkina Faso, among others.
According to the breakdown of the budget, ICT infrastructure and Benin Ports projects will be funded to the tune of N85 billion, transport infrastructure will get N62 billion, just as buildings, physical and development control will get N21 billion worth of funding in the coming year.
“The ultimate target is to promote economic expansion, technology, arts and culture, social inclusion and economic empowerment for Edo citizens, through sustained investments across various sectors of the economy necessary to drive growth and development. Public Private Partnership (PPP) will continue to dominate our investment initiatives in the New Year,” the state governor, Mr. Godwin Obaseki, said while presenting the budget.
Infrastructure is needed to connect supply chains and move goods and services across the country, the Brookings Institution, a Washington, DC-based nonprofit public policy organization, said in its evaluation of the impact of infrastructure on economic growth.
“The economy needs reliable infrastructure to connect supply chains and efficiently move goods and services across borders. Infrastructure connects households across metropolitan areas to higher quality opportunities for employment, healthcare and education,” it said.
Governor Obaseki-led administration in Edo State has attracted a number of high-profile investments into the state from agriculture to oil and gas, entertainment, education, information technology, among others. These investments include the two refineries, over $600 million oil palm investments, Ossiomo plants, among others. These investments require reliable infrastructure to produce and distribute their goods and services across the nation.
In agriculture, it is reported that Nigerian farmers, especially smallholders, suffer about 60 percent post-harvest losses annually which run into trillions of naira due to inadequate infrastructure and storage facilities in the country. As a sector with very high job-creating and income-generating potential, many sub-national governments in the country have initiated a number of reforms to reverse these losses in the sector, and infrastructure will play a key role in this drive.
The state also allocated N7 billion to electricity in line with its resolve to turn the sector around considering that both federal and state officials have unanimously agreed that the privatisation of the nation’s electricity sector has not lived up to expectation.
“Infrastructure has made a net contribution of around one percentage point to Nigeria’s improved per capita growth performance in recent years, in spite of the fact that unreliable power supply held growth back. Raising the country’s infrastructure endowment to that of the region’s middle-income countries could boost annual growth by around four percentage points,” the World Bank said.
