Nigeria: 2012 Budget and Matters Arising

By IndepthAfrica
In Article
Oct 20th, 2012
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By Kabir Mato, Daily Trust
opinion

Last week, President Goodluck Jonathan presented the 2013 budget estimates before a joint session of the National Assembly even in the hill of protests by the parliamentarians that less than 30% of the 2012 estimates have so far been implemented.

The lesson is that it is still not yet uhuru. Budget is still a national calamity in Nigeria more than 12 years into civil democratic dispensation. The political class especially at the center has failed deliberately to imbibe the culture of democratic prudence and subordination to the aspirations of the citizens through the parliament.

The three governments that have come, at the end of every financial year, exhibited stack disrespect of the constitution by either deliberately interpreting simple provisions relating to powers of appropriation or outright refusal to implement the budgets as approved by the National Assembly.

Many reasons have been advanced as responsible for this democratic disaster among which was the over reliance on the term and phrase ‘nascent democracy’ in the first eight years of Obasanjo and hang over of military dictatorship where the budgets were merely approved by the Armed Forces Ruling Council and other such bodies.

Unfortunately again, coupled with the military hangover, was the ascendancy of Olusegun Obasanjo, a retired military Head of State and a renowned hardliner as president. From the Obasanjo days, the National Assembly was despised by the Executive and deliberate propaganda through massive deployment of resources was began to pitch the people against the parliament.

That was reasonably achieved and, henceforth, typical of Nigerians, the legislature was portrayed in bad light and the Executive had the audacity to cry foul whenever the parliament decided to play its constitutional role of defending the people and democracy.

The latest of such was the resolution of the House of Representatives before it went on recess a few months ago to the effect that the president was called upon to either implement the 2012 appropriation as passed or face the wrath of the legislature. The simplest punishment for constitutional breach is impeachment and that was what the House said.

Now, the 2013 estimates have been presented to the Assembly. Again, certain fundamental infractions were noticed right at the level of presentation. One was the low benchmark set for crude oil. $75 to a barrel was short of what ought to be. Raising the benchmark to $80 to a barrel would give the opportunity to reduce internal borrowing to fund deficit.

The government would prefer to borrow than deploy excess received to fund shortfalls. I don’t know what the explanation of the executive is but clearly there seem to be high desperation to get the proposal down the throat of the parliament.

The explanation by the Minister of Finance that Nigeria has the highest benchmark among OPEC members in my view over simplifies the issues. I don’t know yet which country among the members of OPEC is suffering acute fiscal and budgetary indiscipline as Nigeria. I am not also aware of any other country where the rate of pilferages and leakages in the economy in general and oil sector in particular is as preponderant as the case in Nigeria.

To use what obtains in disciplined climes as the basis of taking decision in a country where up to equal quantity that is officially produced is stolen on a daily basis in my view does not stand the test of simple logic and reality and as such a fallacy.

I want to share the view of the House of Representatives especially that the benchmark must be left at $80pb giving the opportunity to use the $5pb to fund the deficit in the 2013 budget. This makes more sense because it refuses the rate of internal borrowing which is more harmful to the economy.

Another major flaw in the proposal is the failure to capture revenues to accrue for the gas sector. Why? Could this be an honest mistake or a deliberate desire on the part of our economic planners cover our eyes so that more of our resources go down the drain especially as the battle for 2015 draws near?

I see this as a deliberate omission and there is no way such a ‘brilliant’ coordinating minister for the economy could commit such a mistake. My take on this is that the legislature must forecast what likely is the expected revenue from gas sources and include it in the budget so that right things are done.

Again, an annual appropriation that is recurrent more than twice the value of capital provision in my view is a weak estimate. Nigeria will use more than N3 trillion to implement a capital budget of a little over a trillion Naira. There is a fundament gap here that must not be tolerated. Huge sums dedicated to the cost of running government in the executive arm in my view is unacceptable and clearly shows the thick contour separating the rulers form the ruled.

From a political economy point of view, the budget is seriously deficient and does not address the root cause of Nigeria’s national disaster. Police and defense alone took more than N800 billion in the estimates, while critical sectors like agriculture is only proposed to take about N80 billion. What that means is that more guns, armored tanks and other coercive instruments would be procured to address insecurity whose real cause is social disequilibrium.

The legislature must tilt the budget on the side of growth and development. I want to see provision made for the construction of gas pipeline from the South across the north so that the industries as local as they may be are given the power base to restart. These are some of the heavy investments that are required to stimulate the economy into production and employment so that young people are gainfully engaged. This to me is more important than buying guns or recruiting more police and soldiers.

Is the government really ready to make Nigeria safe? This estimate does not suggest so. My prayer is that the parliament must correct this weak links so that social crises are addressed though proactive social policies. The examples in our hands if they are anything to go by should have been the lessons to learn from.

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