Nigeria’s 2019 budget wasn’t passed until July ,3 months ago and the government is deploying very severe means to raise cash to fund it. VAT ,among other things, has been raised to 7. 5% to the utter horror of hapless citizens. What’s more, Tunde Fowler,chief tax collector, wants to tax phone calls because “Nigerians make a lot of calls”. The South East is, according to rumours, about to be fenced off by about 56 toll gates plus the endless check points mounted by Nigeria’s military.
And for some arcane reason, Mohammadu Buhari, its president, Teusday presented next years budget before a bovine national assembly.
The budget speech, as expected, is a raft of unrealistic figures, blind permutations, etc. “Despite these anomalies, I am confident that ….” Mr Buhari said in one paragraph. Although the president paid lip service to helping the poor, the reality and grim forecast show that the pains will only increase. Femi Fani-Kayode describes the rostrum thusly:“The budget speech was a flop and the budget itself is shallow, inexplicable, confusing and uninspiring.May God deliver Nigeria from @MBuhari and his @OfficialAPCNg.”
Shehu Sani, writer and former senator “You want World Bank money,You don’t want World Bank assessment.
The Budget will take us out of Sodom and safely land us in Gomorrah.”A few gaping holes.
In truth, crude oil accounts for about 90% of Nigeria’s source of income. It has based this budget on a bench mark of $60 per barrel. Well, as I write, the price has slumped to $58 per barrel and the American WTI is $53 . What this means is that heavy oil refineries will buy large quantities of WTI and a few dollops of Brent. Add to that, Nigeria is not able to pump out enough to fill its below par quota ( 2.3 million bpd). Very often, its navy collude with pirates. Today, Nigeria is not a very good salesperson even though its president says he heads the oil ministry. He has disagreed with the IMF and World Bank about their assessment of Nigeria just as he does his own Nigeria Bureau of Statistics.
Were the budget to be operational toady, Nigeria will be already deficient by $2 per barrel. And according to the IMF, Nigeria spend 50% of its earnings to service debts. Add that to a very high production cost of crude($29-$31) ,it is easy to see that Nigeria is in a hole no matter what is written in Mr Buhari’s speech.
Petrol fuel Imports.
Although the government has promised to “revive its 3 refineries and build hundreds of modular types” in addition, it has not done anything remotely resembling that since 2015. What this means is that whatever the nation earns from crude must partly pay for huge imports of petrol and allied products it lacks locally.
The government has never come clean on how much it spends on importation. Half-way through its troubled first term, NNPC, its national oil company, said it would sack middle men and import directly. It couldn’t.
Drunken Sailor. Another reason the budget will fail as those before it is that the government spends too much outside the financial outlay. For some reason, Nigeria’s Presidency see the nation as a “personal estate ” as some have said. There will be too many oversea trips, too many state sponsored funerals, it must also bail out Niger and Chad even when it can’t afford it. There will be payouts to Boko Haram lords as will be for kings of the “bandits”. At the end, the deficit will really come from very unofficial spendings.
Tax matters. For a government that prides itself as a progressive, whatever that means, its policies are very “anti-people ” ,to use a wording of its army of critics. Like I said, the only thing the government is not taxing is oxygen and it is because it has no control over that. Some bold senators have named the proposal a “Budget of Taxation”.
Today ,its citizens are taxed for saving and also pay for taking out their money. Even though post offices died more than 30 year ago, the government collect stamp duties from banks who charge their customers. People have reached their tensile strengths and the economy already in a coma will die.
Direct Foreign investment.
In the speech, the president boasted that foreign investment has “increased”. The real story is that businesses have moved to Ghana and elsewhere. Nigeria is not investment friendly. For example, the tax authorities have slammed a lien ( ban) on accounts exceeding N50 Million. You must be cleared by the Inland Revenue to access your own cash.
Below is a slice of the budget speech. You will notice that Research and Development is alien to Nigeria.
Some of the key capital spending allocations in the 2020 Budget include:
a. Works and Housing: N262 billion;
b. Power: N127 billion;
c. Transportation: N123 billion;
d. Universal Basic Education Commission: N112 billion;
e. Defence: N100 billion;
f. Zonal Intervention Projects: N100 billion;
g. Agriculture and Rural Development: N83 billion;
h. Water Resources: N82 billion;
i. Niger Delta Development Commission: N81 billion;
j. Education: N48 billion;
k. Health: N46 billion;
l. Industry, Trade and Investment: N40 billion;
m. North East Development Commission: N38 billion;
n. Interior: N35 billion;
o. Social Investment Programmes: N30 billion;
p. Federal Capital Territory: N28 billion; and
q. Niger Delta Affairs Ministry: N24 billion.
Did I tell you that you won’t find research and development? Oh yes. Now, Education and Health ( 92 Billion Naira combined) is less than 1 % of the total budget. Mr Yemi Osibanjo’s “settlement” scheme has been yanked off him and a ministry created for that. The minister has 30 Bilion Naira to waste officially on “humanitarian affairs “.
Last year, Bill Gates, at a forum in Abuja, told Mr Buhari that his economic policies were “not tailored to meet the needs of the citizens”. Mr Osibanjo told Nigerians that Mr Gates was a college drop out.
As I write, Bill Gates is joined in Lyon, France ,by presidents of Burkina Faso, Niger and Ivory Coast far charity events to raise money to combat AIDS, tuberculosis and malaria. Nigeria is inconveniently absent even though 72 of the proceeds will go to helping Africa. Mr Osibanjo is on a trip to Oslo, Norway, some say on a fool’s errand.
By the way, the budget is tagged “Budget of Continuity”. For obvious reasons ,people don’t like the ominous connotation as it seems to suggest continuing pains.
Finally and seriously though:
The budget will fail not because it came too early but because all the lies are still being told and all the excuses are still being hatched. The government still wants everyone to join it in pretending that all is well. Until a rigourous self examination and a voluntary self-awakening, Nigeria will keep groping. It doesn’t matter in which month the budget is presented. The pains can only grow worse.