That The 2016 Budgets Have Been Passed
Thank God that the long awaited federal budget has been passed, though Mr. President demands for details before he accents to it! With this development that the federal and states budgets have been passed by the national and state assemblies and accented to by the state governors, the ground is set for democratic governance for the Nigerian people. But I am constrained to query the local government in this regard because their fiscal expenditures have been shrouded in secrecy; most times they operate without budget or constitutionally approved budget.
I think the local government is the third tier of government with its legislative arm whose members are called councilors. Is it that the laws do not demand publicity of their budgets like the federal and the state or that the press does not give proper coverage of this important tier which is supposed to be the closest and most effective to the people? Something very urgent and demanding must be done to maximize the effectiveness of local governance.
Investigations have shown that while high budgets by states have not translated to the betterment of the people and infrastructural development in the past, some states with very low budgets have performed optimally. This has largely depended on the frugality with which some of the state governors have managed their limited resources. Is it going to be different in this new regime where the leadership of the ruling party is singing the best music of today? Change! Change!! Change!!! Will these huge budgets touch our collective wellbeing?
What mechanism must be put in place to ensure that these monies reach the Nigerian populace who constitute the larger percent of the entire population? Can our roads, our hospitals, the power sector, our educational system, our transport system, our food security, job creations, our agriculture, our image and other life provisions, some of which are in battered conditions, get anything meaningful from these budgets?
Our checks found Lagos state to have maintained the lead of states with huge budgets with 662.5 billion naira estimate for 2016. It is followed by Akwa Ibom state-426 billion, Rivers state-370 billion, Cross River state-350 billion, Kano state-275 billion and Delta state with estimate of 266 billion naira. On the other hand, some states have budget lower than100billion naira for 2016. Such states include Ekiti state with 67 billion, Taraba state-68.8 billion, Niger state-74.7 billion, Kogi state-75 billion, Nasarawa state-77.9 billion and Yobe state with 80.6 billion.
Three things that have thrilled me, nay many Nigerian patriots, about the 2016 federal budget are clear indications that the positive change Nigeria requires in financial management for growth is quite in sight. The budget exposed those paddlers who have, for the past 16 years been feeding fat from it. Kudos to President Muhammadu Buhari for identifying and subduing these financial criminals. Yet, the punishment meted on them seems inadequate: demotion, intra-ministerial transfers and possible refund of the loots. Maybe the Kuje prison should be expanded. But Mr. President has promised thus: “We were all in the process of taking over at a time of national budget.
So, imagine the volume of work and with what happened in the National Assembly, the padding, it would appear that below the Permanent Secretaries, there are still a lot of bureaucracies that are still with them. So, you have to appreciate the position we are in”, he remarked when addressing the All Progressives Congress (APC) National Executive Committee (NEC) meeting in Abuja on March 24, a day after the 2016 budget was passed by the National Assembly.
Another interesting thing is that for the first time in the history of Nigeria a budget is reduced by 17 billion naira. The lawmakers trimmed down the budget from 6.077 trillion naira which Mr. President presented in December 2015 to 6.06 trillion naira on an oil benchmark of US$38 per barrel and crude oil production estimate of 2.2 million barrel per day. The budget was also based on an exchange rate of N197 to US$1.
More interesting, also for the first time, is the reduction of the National Assembly budget from about 150 billion naira to something around 115 billion naira, a reduction though laudable, some citizens still believe is on the high side. Kudos to our lawmakers for accepting to relinquish some of their entitlements in the spirit of patriotism and compassion for the suffering poor Nigerians. But how does this reduction translate to uplifting the poor masses when the constituency allocations to the lawmakers are believed to be grossly underutilized, even abused.
Furthermore, the delay in the passing of the budget was part of the causes of the hardship Nigerians passed since January. I am assured that Mr. President would not start spending a budget that is not passed, as required by the laws of the land, by the National Assembly. Every average Nigerian is feeling this hardship as high inflation has jerked up the price of commodities in our market. For the first time, the rich cried out; those who have touched monies from government welled highest.
With the terrible revelations coming from the corrupt Nigerians currently on trial, those who thought that all was well with Nigeria are biting their tongues. This budget, therefore, has come for equity, fairness and justice. Besides, if the budget must work, though I trust our President, enough powers must be given the Economic and Financial Crimes Commission (EFCC) to force all government parastatals, agencies and commissions as well as individuals on strict compliance and implementation.
Howbeit and on a lighter note, it is difficult to convince any patriot that any Ghana-must-gobag exchanged hands in the course of passing the federal budget. For the states, there can be no guarantee that the lawmakers, business as usual, were induced. Unless this claim is countered, past experiences indicate that it is often hard for budgets to be passed without their executives playing along with their state legislative chambers. And if this is done, the assemblies lose control of the executive, just like the electorate cannot hold the politicians accountable after collecting insignificant payoffs before elections.
Nonetheless, after a long delay spanning from December to March when the budget was debated in the two chambers of the assembly, it was passed on Wednesday March 24. This delay which partly stiffened national economic progress, some analysts claimed, was not unconnected with the ordeal of the senate president at the code of conduct tribunal. If it were in well established climes, national budgets are not subjected to individual whims. Rather the interest of the people, as democracy itself portrays, is paramount.
The senators and honourable members, though with mixed feelings, seem satisfied with the budget. A group led by deputy senate president expected that the shortfall in personnel cost – being part of the reduced 17 billion naira – should have been addressed. This argument brings to fore the minimum wage of Nigerian civil servants who would work for a month for a paltry wage, as juxtaposed to the amount every lawmaker smiles home with every month. This is in addition to allowances and constituency allocations. And as revealed in a national daily, each aide to the principal lawmakers smile home monthly with between seven hundred thousand to one million naira. Recall that each principal lawmaker has a huge cluster of aides. This calls for a national debate and the publication of the actual budget of the national assembly for public examination.
As for the senate committee chairman on appropriation, Senator Danjuma Goje who explained that the reduction of 17 billion naira was from the recurrent expenditure, the controversies that challenged the budget were enough not to argue further on it.
According to the Financial Watch, the budget comprises of a hefty non-debt recurrent expenditure of 2.65 trillion naira and capital expenditure of 1.8 trillion – representing 30 percent of the budget. Under the spending plan, 1.36 trillion is provided for foreign and domestic debt service; while 113 billion is to be set aside for a Sinking Fund towards the retirement of maturing loans.
The budget is based on projected revenue of 3.86 trillion naira, with oil related revenues expected to contribute 820 billion, while non-oil revenues, comprising company income tax, Value Added Tax (VAT), Customs and Excise Duties and Federation Accounts levies, are projected to yield 1.45 trillion. Government estimates to realize about 1.51 trillion from independent revenues.
Other parts of the breakdown shows a huge deficit of 2.22 trillion naira to be financed through domestic borrowing of 984 billion naira, and foreign borrowing of 900 billion, totaling 1.84 trillion naira. The deficit is equivalent to 2.16% of the country’s Gross Domestic Product (GDP) growth rate projection of 4.37%.
Also, a significant portion of the recurrent expenditure has been earmarked to institutions offering critical services, including works, power and housing 433.4 billion; education 369.6 billion; defence 294.5 billion; transport 202.2 billion, health services 221.7 billion, and interior ministry 145.3 billion.
20 billion naira is proposed for the Presidential Amnesty Programme, another 20 billion as sinking fund for infrastructural developments, and 200 billion for special capital projects. A nine per cent reduction in non-debt recurrent expenditure, from 2.59 trillion in the 2015 budget to 2.35 trillion in 2016 was proposed. Furthermore, 300 billion naira was proposed for special intervention programmes, taking the total amount for non-debt recurrent expenditure to 2.65 trillion naira.
With all these proposals, one would think that the federal ministries will make best utilization of their allocations to effect visible changes as they promised when they took over. According to them, they were ready to drive the change agenda with jealousness by harnessing available resources, improving their ministries, creating jobs for the teeming Nigerian youths, engineering the private sector partnership and ameliorating the difficulties faced by Nigerians in all the sectors of the economy.
What will this budget give us in the midst of the organized looting in the country, despite concerted effort by the President Buhari-led government to defeat corruption? Why have some Nigerian politicians, elected and appointed, refused to resist the temptation of looting our commonwealth? It may be because the treasury looters are sure of abridged justice at our courts. There is need for speedy trials and convictions. A situation where these looters are granted bail and it takes too long to conclude their trials has been a setback in the fight against corruption.
Many Nigerians believe that the hardship they have faced in the past few years will end with the passing of the budgets. At least, contracts would be awarded and executed, thus money will begin to circulate. If, peradventure, these huge budgets are well utilized, then by the end of 2016 all sectors of the economy at the federal and state levels will be in better condition. That is what I dearly wish my country.
Muhammad Ajah is a writer, researcher, advocate of humanity and good governance based in Abuja E-mail: [email protected]