There are different types of budgeting; balanced, surplus and deficit. Balanced budgeting is when the total estimated revenue is equal to the proposed expenditure. Surplus is when the total estimated revenue is more than the proposed expenditure. Deficit is the direct opposite of surplus, and it is when the government’s total proposed expenditure for a period of time is more than the total estimated revenue.
Why go deficit? “Deficit financing, undertaken for the purpose of building up useful capital during a short period of time, is likely to improve productivity and ultimately increase the elasticity of supply curves.” ~ Prof Alka Ghosh.
Deficit is what developing economies like India practice. Deficit looks beyond physical money. Intellect and competence are key components of deficit budgeting. If the usual sources of finance are inadequate for meeting public expenditure, a government may resort to deficit financing.
Deficit financing refers to the creation of new money for filling up the gap between planned expenditure and estimated receipts. There comes the concept of “intellectual money” as notably referred by Governor Ben Ayade. Intellectual money is basically the brain power, it looks beyond physical finance, it looks at other ways of getting things done without absolute reliance on physical finance. So there is absolutely nothing wrong with Cross River budgeting in trillions.
Deficit budget is the audacity of an ambition of the mind power. It is used in backward underdeveloped economies, predominantly 3rd world. It is an expression of an agenda by the state executive to move the state from 3rd to 1st world. Deficit budgeting also provides you the opportunity of building million dollar projects that the state ordinarily can’t finance. It provides you the window to budget for superhighways and deep seaports, while you search for investors that will invest in these projects and see to it’s completion. It is a budget for high class intellects, perhaps that is what qualifies Ayade to run this country.
How has deficit budgeting helped Cross River State? Judging by the low income of the state, has anybody wondered why salaries, pensions and subventions are been paid regularly with projects spread across every Local Government Area in Cross River State? It is the concept of intellectual money. The Vitaminized Rice Seedlings plant in Calabar, Cocoa Processing plant in Ikom, Ultramodern Rice Mill in Ogoja, Groundnut oil factory in Bekwarra, British-Canadian University in Obudu, Referral Hospital in Obudu, Chicken Processing plant in Calabar, Noodles Factory in Calabar, Feedmill in Calabar, Pharmaceutical Company in Calabar, Garment Factory in Calabar, Power Plant in Calabar, Poultry Farm in Calabar, Teachers Continuous Training College in Biase, Toothpick Factory in Yakurr, Social Housing in Bakassi, Dualization of Calabar to Odukpani Road with a flyover at Odukpani junction, Dualization of Ranch junction road in Obanliku to Mfom road in Ogoja, Cassava Starch Processing Factory in Obubra, Roofing Tiles Factory in Yala, and many more are all products of the “intellectual money” concept.
Have you imagined the amount of jobs these factories will generate for Cross Riverians? Have you thought about the overall economic benefit of a local cocoa farmer in Ikom supplying Cocoa bean directly to a factory, a local Rice famer in Ogoja supplying harvested rice to the Rice Mill in Ogoja, a local Groundnut famer in Bekwarra supplying raw Groundnut to the factory in Bekwarra, a small poulty farmer in Bakassi supplying chicken to the chicken processing factory in Calabar? This is how economies grow! Producing and processing what they consume.
It is no news that Governor Ayade has over 5,000 political appointees spread across the 18 LGAs of Cross River State. 5,000 people collecting monthly salaries of over a 100,000 Naira. What this means is, every family in Cross River State is represented in Government. 5,000 people can own houses, take care of their families, own farms. Aside the economic benefit, it also reduces social tension. Also on the payroll are recently employed 18,000 people from every ward in the State. This brings the total number of persons appointed by Governor Ayade to over 25,000. Imagine this 25,000 people, which are mostly youths out there on the streets, there will certainly be high rate of crime and poverty.
As at 2019, Cross River State foreign debt stood at $192.73 million (73 billion Naira). While domestic debt is 168 billion Naira. That is a total of 241 billion Naira. This is the debt Ayade has been servicing. Salaries, subventions, contractors, pensions, MDA imprest paid regularly. Remember, Cross River can’t borrow due to the state’s level of indebtedness. Is it Ayade that plunged the state into this level of indebtedness? No! Ayade came at a time Cross River was in dire need of leadership to save the state from total collapse. So far, so good, there is light at the end of the tunnel as the future sure looks bright.