Resource Allocation in Nigeria
In economics, resource allocation deals with how a country assigns its scarce assets resources,
into various sectors. In the case of Nigeria, the government determines how much funds will go
into the various sectors like education, healthcare, security, and infrastructure. For 2024,
Nigeria’s federal budget is estimated to be ₦27.5 trillion with a revenue expectation of ₦18.3
trillion. The expenditure still outweighs the revenue which means the government would still
need to borrow to finance the deficit. The budget which was themed “Budget of Renewed Hope”
was aimed at fostering growth, reducing poverty and encouraging economic activity but in
reality, most sectors were still underfunded.
The provision of services in any economy is largely baked by education. In Nigeria, the
education sector received only ₦2.18 trillion, approximately 8% of the total budget, in 2024. It
falls short of UNESCO’s recommendation for developing countries to allocate 15-20% of their
budget on education. Such underinvestment has resulted in a scarcity of qualified teachers and
essential teaching aids in many classrooms, as well as entire schools not having basic teaching
infrastructure. This produces poor education outcomes which results in the economy having
fewer skilled workers vulnerable to economic decline. Improved funding would enhance the
cost-effectiveness of education.
Healthcare is a sector that impacts a nation’s development. Nigeria set aside ₦1.33 trillion,
approximately 5% of the budget for health, in 2024. This figure falls short of rural health service
demands. Consequently, Nigeria suffers from extremely low life expectancy, and high infant and
maternal mortality rates. Increasing the investment would improve the health of the population
which in turn would reduce sick days, improve productivity, and reduce poverty levels.
Productivity and a healthy workforce go hand in hand.
Transportation, electric supply, and water resources are parts of public infrastructure as well.
Nigeria’s Road Network is one of the sectors that continues to be neglected, especially in
comparison with the rest of the world. It is of utmost importance for a country’s population and
industries to access basic necessities. Around five percent of the Nigeria’s budget in 2023 was
projected to be spent on infrastructural facilities development. Considering Nigeria’s enormous
population of 200 million alongside the underdeveloped infrastructure, the budget is insufficient.
Without dependable access to basic infrastructure, entire regions are forced to struggle in
exercising even the most basic functions. Some people are unable to attend work, achieve an
education, or obtain healthcare. Increased spending for infrastructure is necessary for trade
expansion, investment, and poverty alleviation.
In 2024, Nigeria’s military spending has been funded with 3.25 trillion naira, amounting roughly
to twelve percent of the total expenditure further solidifying the focus on international affairs.
Unlike some securities arms focuses primarily on defending, issues such as terrorism, banditry,
and kidnapping purely aim to improve order within the country. With these threats, it is
absolutely impossible to not have a security primary center. To some extent, reserved funding is
sometimes helpful in case proactive approaches drive aid for civil projects that actually have an
impact on society rather than solely serving as an enabler for criminal/ignorant conduct. To an
extent, some economists argue that such a huge portion of GDP is not put to good use instead
guarded, which leads to a decrease in society resilience and long-term sustainability.
The budget allocated to other sectors like agriculture and social development was smaller. With
more than a significant amount of Nigerians relying on farming to survive, agriculture received
only 3.5% of the budget. Expectedly, social programs aimed at reducing poverty received an
even smaller allocation of about 2.3%, which is shockingly inadequate given that roughly 87
million people in Nigeria live below the poverty line. These numbers have led to countless
questions as to why there isn’t more national budget spending to help enhance food security
along with providing support for the nation’s poorest citizens.
One of the major problems is rampant corruption that persists in Nigeria. Even when funds are
appropriately earmarked, they often are not spent due to corrupt practices by public officials.
Schools remain unbuilt, equipment sit unused in outfitted hospitals, and paved roads go
unfinished. Another contributing factor is inequality; certain regions receive more development
projects, which leaves poorer more rural regions behind. Also, since Nigeria relies heavily on oil
revenue, a drop in oil prices poses a big issue due to a reduced government revenue.
In summary, resource allocation in Nigeria is a critical issue that affects all parts of the economy.
While some sectors like security receive large portions of the budget, important areas like
education, health, and infrastructure are underfunded. For Nigeria to grow and reduce poverty, it
needs to invest more in its people, through better schools, hospitals, and public services. Also,
the government must fight corruption and ensure that funds are used properly so that all
Nigerians can benefit. With better planning and honest leadership, resource allocation can
become a powerful tool for national development.