Reviewing the 2015-2017 MTEF (II)

The 2015-2017 Medium Term Expenditure Framework is suffused with a feel good recounting of government’s achievements in a period of great hardship and uncertainty for the majority of the population. Recounting “successes” in such programes as the SURE-P and its components creates the “it is well” atmosphere and attitude in government. The danger if this goes unchallenged is that the government gets the impression that it is moving in the right direction and merely needs to continue what it is already doing. But the extant government direction is not yielding results, it is not improving lives and livelihoods, it is not creating jobs; it is fuelling recurrent expenditure at the expense of capital spending. Fuel import is still the norm and there is no agenda for local refining and value addition. After spending over $20bn for electricity improvement, all we get are megawatts of excuses and apologies explaining why we should not have electricity. So, what exactly do we need to continue? If the MTEF is just about the repetition of the same cliches year after year, are we not reducing it to a mere empty ritual? Yes, the emptiness of the Nigerian MTEF is understandable because those charged with preparing the same have failed and neglected to garner alternative viewpoints outside what they know already and since their solutions are the strait jackets of one size fits all, repetition is inevitable.

The expectation is that the MTEF in an election year should be a fiscal agenda for the administration that can be presented to the electorate to show the intent of the government for the betterment of their welfare through the budgeting process. Considering that the stories about improving access to electricity is becoming endless, and the promise in the MTEF to develop clean and alternative energy as a way to extend power supply to rural areas, one had expected fiscal measures to be put in place to back up the off-grid solutions in renewable energy. However, the promise ended with the statement. The advantages of walking the talk for renewable energy include local job creation, electricity on demand with a shorter project realisation gestation period, environmental sustainability and its financial superiority over grid connections when the financial costs are amortised over the medium term of about 10 years. Apart from fiscal incentives for renewable energy, if energy is so important to development and the removal of fuel subsidy led to a shut-down of Nigeria, why is it difficult to invest a part of the subsidy savings in the energy sector especially sustainable renewable energy?

Concretely, what has the SURE-P achieved that is sustainable? Is it not time to re-examine the model of spending over N250bn every year at the federal level with little or no results? Construction of roads that are supposed to be augmented with SURE-P funds still needs alternative funding and even borrowing. This is the case with the East-West Road. And after so many years, the road is still uncompleted. When the MTEF recounted 172,690 jobs attributable to SURE-P, it did not tell the whole story about the real number of people who are still employed by the programme and whether handing out stipends to people who need jobs is the right way to go in an era when knowledge for development has become so widely available. Is it possible for the Minister of Finance, Ngozi Okonjo-Iweala, to publish the names, addresses and phone numbers of these 172,690 beneficiaries or are we to believe these numbers simply because the MTEF said so?

Under the theme “Managing Expenditure”, the MTEF states that the large number of claims for increases in salaries and allowances including pensions and other benefits will need to be curtailed as part of fiscal consolidation. But, is this possible in an economy where the political class earns scandalous and stupendous remuneration? Should it not be clear to the authors of the MTEF that as long people in government draw the unearned income coupled with corruption that has become so blatant that demands for increase in remuneration will not cease? Rather, it will increase over the years because public workers benchmark their demands of what their leaders earn. The IPPIS which has been stated to facilitate the reduction of the personnel bill has been ongoing since 2006 and nothing was said of the date when all MDAs will be fully captured under it. Have all the MDAs been captured or what exactly is happening? It seems to be a project in perpetuity. Yes, new recruits will be documented and captured but the IPPIS still needs to go round all MDAs.

The managers of the Nigerian fiscal system have created perverse incentives and rewards for criminality. We have been regaled with different figures on how much has been saved from the discovery of ghost workers. At the last count, the figures have risen to N160bn. But this scam was not perpetrated by ghosts but by humans. Who has been investigated? Who has been prosecuted? Not even one person! Just the circus of bandying figures and moving on and as usual expecting “gullible” Nigerians to be intimidated by figures that do not make meaning to their lives.

In the last 10 years, government has been repeating the mantra of completing ongoing and existing projects that are at different levels of completion. But what do you see in the budget? A cacophony of new and old projects that leads to the meagre public resources being spread so lean and achieving very limited results. Projects that were slated for completion in three to four years have been implemented for the last seven to 10 years and have yet to be completed.

On a note of caution, let the fiscal authorities and the managers of Nigeria’s economy beware of public anger. It may not be business as usual. We have already started hearing the ideas of belt tightening for the citizens in view of the reduced price of crude oil. When the price was high, the managers of the economy and the political leadership insisted on profligacy and refused to listen to good advice on projects that would benefit the majority of the people. They have been paying themselves fantastic remuneration and the remaining is frittered away through corrupt practices. What actually gets to the people is very very little. In the event of the government considering belt tightening, it should tighten the belt of those who have benefitted in the period of high oil prices. The benefits of high oil prices were not shared evenly. Only the tiny minority of government officials and their cronies captured the benefits and as such should be made to bear whatever pains that should arise from the need for belt tightening. Make no mistakes, the days are gone the fathers will eat sour grapes and the children’s teeth will feel the pain. Those who feel called upon to collect N150bn every year in the name of legislative work and those who have about nine jets in their fleet should lead the way for sacrifice. The common Nigerian on the streets has already been adjusting for a long time and any further adjustment will mean a death sentence.

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