The draft national budget submitted by the Boakai administration to the Legislature just over a week ago is up for scrutiny and comes with a tone of frugality that could only be expected of President Boakai.
Totaling US$692.41 million, the expenditure portion of the draft budget comes with upward adjustments to recurrent expenditure, downward adjustments to key offices of leadership; and some positive appropriations in line with the President's ARREST agenda. These adjustments reflect a strategic reallocation of resources towards priority areas such as education, healthcare, and agriculture whilst also implementing cost-saving measures in administrative and legislative functions.
The draft budget shows a growth rate of 5.3 percent in 2024, which is expected to increase to 6.0 percent in the medium term (2024-2026), up from 4.6 percent experienced in 2023. A substantial portion of the budget, 93%, is allocated to recurrent costs, marking a significant increase from the previous fiscal year.
The submitted budget now sees a dramatic upturn of recurrent cost from the previous 2023 fiscal budget of US$621,484 million representing 80% of the previous US$782.94 million budget in 2023 to a rise of 640,593 million, representing 93% of the US$692.41 million in the 2024 draft national budget.
While the 93% "recurrent costs" may appear alarming, it should be seen from the perspective that the overall expenditure under the Boakai administration is taking a massive US$90.53 million cut from the previous year (under the George Weah administration), while the recurrent costs increase by just US$19.11 million.
Essentially, the difference between the overall expenditure cut (US$90.53 million) and the recurrent expenditure increase (US$19.11 million) for this fiscal year is US$71.42 million -- this is how much Boakai is expected to save in this budgetary exercise, pending legislative approval.
The 2024 draft budget also includes massive reductions to the budgets of key government offices and those funds reallocated to sectors such as education, health, and agriculture.
Noteworthy are the offices of the President, the Vice President, the Ministry of State, the House Speaker, the Deputy Speaker, and the Senator Pro-Tempore -- each expected to take a 50 percent budgetary cut.
The Ministry of State's budgetary allocation is reduced from US$20 million to US$9 million; the Office of the President, from US$4.4 million to US$2.2 million; and the Office of the Vice President, from US$4 million to US$2 million.
The Legislature's budget is reduced from US$67 million to US$38 million; the Senate Pro Tempore's budget, from US$4 million to US$1.2 million; the Speaker's budget, from US$2.2 million to US$1.6 million; and the Deputy Speaker's budget, from US$1 million to a little over US$515,000.
Benefiting from these high-profile budgetary cuts are: the Ministry of Education, increasing from US$98 million to US$105 million; the University of Liberia (UL), from US$30 million to US$32 million; the Agriculture Sector, from US$4 million to US$5 million; and the Health Sector, from US$64 million to US$75 million.
It is no secret that the lion's share of the government's recurrent expenditure goes to payroll and energy costs, as well as domestic and external debt. With the Boakai administration facing the stark reality of these debts, the slight increase in recurrent expenditure might be perceived as a kind of cushion to address some of these pressing issues in this first year under the new President.
Under this recurrent expenditure, the government of Liberia has apportioned US$129 million, or 18.6 percent of the total budget accounts for public debt servicing, which includes interest and principal payments to domestic and external creditors.
The total domestic debt under the draft 2024 fiscal budget accounts for US$69.18 million or 10 percent of the total expenditure, while external liabilities account for US$59.82 million or 8.6 percent of the total expenditure. Domestic creditors classified include the Central Bank of Liberia, commercial banks, and other businesses, while External creditors include bilateral and multilateral institutions.
A whopping US$297.00 million or 43 percent of the total budget is expected to service personnel and personnel-related expenditures, including salaries for all employees of the government, representing teachers, doctors, nurses, military and paramilitary personnel, elected and appointed officials, and other professionals.
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Under this recurrent expenditure, US$75.50 million or 10.9 percent is expected to service basic healthcare delivery services, food, fuel, lubricants, drugs, and medical consumables, as well as vaccines and vaccination supplies, Regional Diagnostic Centers, and transfers to public and private health facilities across the country.
Another portion of the recurrent expenditure of the 2024 fiscal budget includes the expected expenditure of US$44.70 million or 6.5 percent for the expansion of basic services and investment in critical infrastructures such as the National Road Fund, the South Eastern Corridor Roads Asset Management Project (SECRAMP), Pliability Road Intervention, Meteorological Equipment, etc.
Going forward, key allocations for the 2024 draft budget include public debt servicing, personnel expenses, healthcare delivery services, infrastructure development, energy and environment investments, and education support programs.
