By Jaye Gaskia
Let me begin
with a confession; I am no economist, so some of the ways of budgeting may indeed
be strange to me. Let me use as an example here, the way some countries,
including ours, who are eager to please their people and show some progress
dish out new studies which invariably suggests that at the current trend, such
economies will overtake and leapfrog other economies in two to three decades
hence!
The latest
example here is Britain, where some think Tank have just released a study
showing that by 2028 the UK will become Europe’s biggest economy, overtaking
France, and leapfrogging Germany! Ofcourse the assumption is that the other
economies will not grow as fast as the UK economy, and that the other ruling
classes are not competitively lowering the cost of doing business and
increasing the burden of being working class and poor!
Not to be
outdone in this business of ‘ceteris pari bus’; our own treasury looting ruling
class is engaged it its own game of self serving economic deception. The
Nigeria Bureau of Statistics [NBS] has all through 2013 been engaged in the
process it calls ‘rebasing the GDP/economy’. And it has been gleefully hinting
us that by the time it concludes the exercise early in 2014; Nigeria’s economy
with a current market size of $75bn will have suddenly frog leaped South
Africa’s economy with a current market size of $ 680bn to become Africa’s
largest economy!
This is not
just a season of festivities, being also the Xmas season; it is also apparently
a season of miracles! This is indeed the season of voodoo economics!
Now let us
get back to the reason for this commentary, that most explicit manifestation of
voodoo economics in our national life; the budget process! It is the season of
budgets again, when executive arms of government prepare and present to the
legislative arms, budget proposals for the coming year.
A number of
issues need to be raised and addressed before we go into some preliminary
analysis of the figures presented! First, every year we go through the ritual
of presenting the new budget proposals for the new year to the legislative
assemblies; and always against the background of the non or poor performance of
the current, soon to be previous budget!
So for
instance at the Federal Level, at no time since the return to civilian rule in
1999, has the budget performed above 60% in any one year. Usually budget
performance is far below 50%! Additionally the component of the budget that
usually grossly underperforms is the capital vote! The recurrent budget nearly
always performs between the 95% and 100% range! This disparity in performance
is very instructive, because the component of the budget that funds
infrastructural development is the capital vote; and it is the component that
has repeatedly and serially grossly underperformed. It is perhaps the reason
why between 2000 and 2012 there were well over 12,000 abandoned projects
littering and cluttering the country’s landscape; projects valued at more than
a whooping N7.7tn and with more than N2.2tn already expended in mobilizations fees! Mind you, we are here speaking of already abandoned projects alone!
Confirming this trend of wastefulness, a recent presidential monitoring report
on NDDC projects submitted early 2013 also affirmed that nearly 40% of NDDC
projects have been abandoned; with only less than 20% projects awarded ever
completed and commissioned. Now this is equally very instructive; to complete
and commission a project, as we all know in our national experience is not the
same thing as delivering a quality and long lasting product! Boreholes without
water have been sunk and commissioned courtesy of tanker fetched water
hurriedly poured into the borehole and its overhead tanks, the night before the
grand commissioning ceremony! The remaining 40% of projects are in various
stages of completion, none exceeding 50% completion stage, and no one is sure
whther they will ever be completed!
President
Goodluck Jonathan has himself attested to this very sorry state of things while
recently inaugurating the new board of the NDDC!
But what is
even more worrisome, apart from the fact that the victim of budget
underperformance is invariably always the capital vote; is the fact that no one
bothers to do an analysis of why the budget has serially underperformed, and
why it is incapable of performing in order to fix the problem. Is it a capacity
problem? At various levels? How are budget estimates arrived at? What skilled
and competent human and material resources are available for making this
estimates and implementing the budget? And what is more?
No one ever gives the
reason for this underperformance nor makes any returns to the treasury with
respect to what was not spent! What percentage of the previous year’s unspent
budget is rolled over into next year’s budget proposal? How many of us the
unwary electorates know for instance that in the 2013 Federal Budget, apart
from the N1bn budgeted for food in the presidency, that there was budgetary
provision for 2,399 constituency projects for the constituencies of each of the
360 HoRs members and the 109 Senators?
How many of us know that constituency
projects which ought to be visible in our constituencies had cost our country
more than N900bn since 2000? And that is excluding the cost of the 2,399
projects in the 2013 appropriation act!
Now to the
2014 budget proposals! The FGN through the Federal Minister of Finance, and
Co-ordinating Minister of the economy [invariably the Prime Minister]; has laid
before the NASS, a budget proposal for 2014 of N4.6tn. Of these, the Capital vote is N1,1tn [27% of
the budget]; while recurrent expenditure is N3.5tn [73% of the budget]. Now
this capital vote which constitutes 27% of the proposed budget is 4% decline
from the 31% of the 2013 budget that it constituted!
This N1.1tn,
which is the size of the proposed capital vote is less than the Personnel cost
[read salaries, allowances and emoluments] component of the recurrent
expenditure which stands at N1.723tn in the proposed 2014 budget; leaving
N2.43tn for recurrent non debt, and non personnel cost [read overheads]!
There ought
to be something significantly wrong with the budgetary process and with the
managers of the economy; otherwise why would personnel costs component of the
recurrent expenditures alone far outstrip the entire capital vote by over N640bn?
This amount by which personnel cost outstrips the entire capital vote is more
than 50% of the capital vote! What makes this even more counter productive and
under developing is if we put this in proper perspective. If we as we know from
the report of the Adamu Fika committee which looked into the cost of governance
in 2012, the country spends averagely on an annual basis the sum of N1.3tn on
the salaries and allowances of only 18,000 top Federal government officials;
then it means that of the N1.7tn personnel cost, 18,000 [very likely
unnecessary and redundant political hangers on] top Federal government officials
receive N1,3tn leaving N0.4tn to the several hundreds of thousands of junior
and middle level Federal Government Officials to share!
There are still
more incongruities to come! Contained in the 2014 budget proposals is the clear
and manifest anomaly; the combined budget proposals for the Federal Ministry of
Agriculture and Natural Resources at N67bn [it was N70bn in 2013 and a mere
1.6% of the budget contrary to the agreement entered into in the Maputo
Declaration of African Leaders to commit not less than 10% of annual budgets to
agriculture in order to achieve economic growth rates that can enable poverty
to be halved]; and the Federal Ministry of Science and Technology at N31bn; is
less than the budget proposal for the Niger Delta Ministry at N111bn!
The N31bn
budget for the Ministry of Science and Technology is actually less than the
N37bn budget for the National Intelligence Agency [NIA]; and some still think
the allegation of training snipers and putting over 1,000 people on a security
watch list is spurious?
Furthermore
the N20bn budget proposal for the office of the National Security Adviser is
just about 66% of the budget of the Science and Tech Ministry budget, and just
about 33% of the budget of the Agriculture Ministry! Furthermore the N3.6bn
budget for the Directorate of State Security [DSS] is more than the N2bn
Federal Government counterpart budget for its much trumpeted North East Development
Initiative! We could also compare the North East intervention budget at N2bn
with the Niger Delta intervention budget at N111bn! All in all, the total vote
to the secret service agencies; DSS – N3.1bn + NIA – N36.9bn + DIA [Defence
Intelligence Agency] – N7.4bn + ONSA [Office of the National Security Adviser]
– N20.2bn is just about equal [N67.7bn] to the budget proposal for the ministry
of agriculture at N67bn! Yet agriculture contributes 33% of the GDP and employs
60% of the productively engaged labour force!
This 2014
budget proposal by the way also includes nearly N900m as cost to fuel
generators for the Presidency and the MDAs; with the Presidency and Federal
Ministry of Finance being allocated N33.5m and N77m respectively for fueling
generators in 2014! The same year we have been promised a minimum of 18hours of
light daily?
The 2014
budget proposals also include a fiscal deficit of N912bn, almost the size of
the capital vote at nearly90% [for a nation with External reserves of $43.9bn
as at Dec 2013; a drop from $ 49bn as at December 2012]? As well as a Debt
servicing component of N712bn, more than 60% of the capital vote!
And as a
yearly ritual, the budget also includes N150bn allocation to the NASS [360 +
109 + 3,000 (max in support staff)]! Now to put this in perspective, this
amount of N150bn is more than the annual budget proposals of Kogi [N129BN];
Kwara [N126bn]; Enugu [N93bn]; Niger [N99bn]; Ekiti [N104bn]; or Bauchi
[N133bn]!
This is by
far only just the tip of the iceberg, for the full details of the budget
proposal are just coming out. Who knows how much will be budgeted for Feeding
alone in the Presidency in 2014? Given that 2014 is a year when we expect a lot
to happen in and around the presidency; this allocation may very well be doubled
from its annual ritual of nearly N1bn!
And ofcourse
Fuel subsidy, with a budget allocation of N971bn continues to be a readymade
cow to be continually milked at the will of the Presidency. This is more than
the size of the fiscal deficit, and is also even closer to the size of the
capital vote that the size of the fiscal deficit. What progress have we made
with respect to improving domestic refining capacity? How many million liters
per day of petrol are now locally refined? Have we been able to scientifically ascertain
the true daily consumption rate for PMS? What is this figure? 25 million liters
per day? 30 million liters per day? 35 million liters per day? How was this
figure arrived at? How much of this is locally refined? And how much is imported?
What should our realistic and true subsidy burden be?
This brings
us quickly to the supposed subsidy savings and the SURE-P scheme. What is the
current landing cost of imported fuel? What is the average landing cost for
2013? It is only if we know the answer to these two questions that we can
definitively determine whether any subsidy savings have been made or not.
Because if as we suspect landing costs have progressively increased since
February 2012, then it stands to reason that the size of the so-called subsidy
savings would have been progressively diminishing since the N32 per liter that
it was in February 2012. The reason is simple; the most decisive factors in the
pricing of imported refined fuel remains; the value of the Naira in relation to
the dollar! For as long as we import, and as long as the value of the Naira
continues to decline against the dollar, for so long will the cost of refining
and transportation, and therefore the landing cost of imported refined fuel
continue to rise!
Let us end on
a somewhat tragicomic note: according to the JTF [Joint Military Task Force],
it arrested 1,857 oil thieves, and destroyed 1,951 illegal refineries in the
Niger Delta in 2013! What a feat!
Nevertheless crude oil theft increased from
barely 200,000 barrels per day in 2012 to just about 400,000 barrels per day in
2013! Does this have anything to do with the fact that the JTF has been chasing
the shadows? Curing ringworm while leaving leprosy? The 1,857 oil thieves
arrested and the 1,951 illegal refineries destroyed work out to almost 1
illegal refinery destroyed per 1 oil thief arrested! The only charitable
deduction that we can make from this is that these are small scale thieves
trying to make a living; resorting to small scale oil theft [scooping of crude
from broken pipelines or spills], and refining same as a means of livelihoods.
These are not the owners and sponsors of the sophisticated grand criminal
empires and enterprises with state of the art equipment, large barges and large
tankers; who are responsible for the daily loss of 400,000 barrels per day; the
annual revenue loss of near $18bn per annum; and the daily crude oil spill of
nearly 40,000 barrels per day into the fragile Niger Delta Environment!
On this note
let me wish you all complements of the season. And let me express the wish and
the hope that we shall collectively determine to make 2014 a more decisive year
for our wellbeing, by resumimg from where we left off the tasks and the agenda
of the January Uprising of 2012. And mark my words, there will be plenty
opportunity in 2014 to Reclaim our Country, and Take Back Nigeria! We do have
to be prepared though.
(Follow me on Twitter:
@jayegaskia & [DPSR]protesttopower; Interact with me on FaceBook: Jaye
Gaskia & Take Back Nigeria)
