2015 federal budget: A call for action

The 2015 federal budget is aptly tagged a “Transition Budget”. The idea of transition implies a change and a movement to the next level. 2015 is a year of transition in the sense that we will be holding federal and state elections. But beyond this sense of transition, it is imperative for the transition to include new ways of doing things and for Nigeria’s budgeting system to transit from the yearly rudderless ritual to a system of managing public resources to achieve results for the public good. These results referred to in this discourse are already agreed indicators of improvements in the Nigerian human condition as expressed in high level policy documents; ranging from the 1999 constitution to laws policies and directives, etc. Budgets are expected to contribute to development: Can anyone in good conscience show Nigerians the results of the implementation of previous yearly budgets beyond announcement of awards of contracts and payment of salaries and emoluments?

Considering the dwindling revenue of the Federal Government, the expectation was that the austerity measures announced by the Minister of Finance, Dr. Ngozi Okonjo-Iweala, will apply to all. The minister in the overview of the 2015 budget proposal stated that the Federal Government was cutting down international travels and training for all Ministries, Departments and Agencies by 50 per cent while administrative expenditures for building, equipment, supplies etc will also be drastically reduced. But it appears that the reduction in expenditure will not apply to all the MDAs or arms of government. For instance, the National Assembly still has a vote of N150bn, an indication that nothing has been added or reduced from its annual vote in the last four years. This vote of N150bn has been heavily criticised in the past as unduly high by a broad spectrum of Nigerians considering that it is a vote meant for the Senate and House of Representatives members and their supporting bureaucracy. Continuing with this vote of N150bn during a period of dwindling national income is not only insensitive but outright contemptuous of the suffering masses of the Nigerian people. In view of the fact that the National Assembly vote is a statutory transfer, it must be released to the legislature as it takes priority over other non-statutory expenditure. Thus, as our budget has been prepared with $65 per barrel benchmark and crude oil currently sells at about $45 per barrel or even lower, the N150bn will take precedence over the capital budget and other non statutory expenditure. So, where is the transition? Maybe, from budgeting as if the people do not matter to a budget for the elected officials and their bureaucracy and nothing more.

The 2015 budget still contains line items such as N1.142bn as welfare packages; N295m for purchase of security equipment; N100m for computer software acquisition – all for the office of the Secretary to the Government of the Federation. This is replicated with lower sums across the MDAs. Pray, what is the basis for the provision of welfare packages in an office where staff emoluments have been taken care of? In the same SGF office, the amount of N1.2bn was requested in the 2014 budget for welfare packages. In the Presidency/State House, there is a vote of N826m for the rehabilitation and repairs of buildings and the same subheading got a vote of over N2.6bn in the proposal for last year; purchase of canteen and kitchen equipment for N174m; purchase of “crested cockery” for N54m. Indeed, the entire federal budget seems to be a process of filling out blank spaces in the New Year based on last year’s expenditure heads. This lacks innovation and implies that new developments do not arise. It is just the same old way of doing things. Yes, indeed, this is a budget of transition.

Nigeria is still funding the National Hajj Commission and the Christian Pilgrims Commission for what is just a private religious expression. Our constitution forbids the adoption of state religion and we are insistent on using state resources to promote only two out of the many religions in Nigeria. This is discriminatory against adherents of other religions; it is unconstitutional. But we insist on doing this year after year. The Ministry of Agriculture continues its yearly traditional play on words in its budget. Words like access to fertiliser, inorganic fertiliser, organic fertiliser, fungicides, herbicides, improved seeds, agro processing facilities, crop development appear over six times in the budget. Some of the items are repeated over ten times. Crafting a budget in a way and manner that confuses the public and can only be understood by the “crafter” is the surest guarantee for abuse of public resources. Best practices demand that a budget be clearly written in such a way that the public can understand its provisions and be able to track expenditure.

The capital budget (inclusive of SURE-P) has a vote of N633.53bn, which is 14.2 per cent of the overall expenditure. According to the Minister of Finance, the capital budget will be augmented with external long term concessional borrowing for infrastructure projects such as $100m from the World Bank for the Clean Energy Technology project; $800m for the East-West Road from the African Development Bank and the Islamic Development Bank; and $4.8bn for the Mambilla Hydro Electric Power Project from China Exim Bank. The minister further stated that the Chinese have also invited Nigeria to negotiate a credit of about $12bn for the Coastal Rail Project to be given in six tranches over a six-year period. The implication of this statement is that the above are not all the capital projects to be supported from external borrowing; there are more and the minister merely gave examples. The second is that budgeting for capital projects of this nature has not been done in a comprehensive and integrated manner. These funds especially the parts that fall due for drawdown this year are not part of the capital budget being considered by the National Assembly. They are being considered separately under the borrowing plan.

This is ridiculous because when repayment of this debt will be done, the debt service sums will be part of the budget. These loan figures should have been part of the capital budget funds after they have been fully negotiated and due for drawdown in the year. Even governments contributions to capital projects executed through public private partnerships should be recorded in the budget. This will guarantee comprehensiveness of the budget. Many posers arise from a project like the East-West Road which has gulped over N100bn. It is getting an additional N134bn ($800m converted to the naira at the official exchange rate N168=1USD). How much will the East-West Road require for completion? What are the original cost and the reviewed cost of the road? What is the basis of the reviews or price variations? Is the road a project in perpetuity?

A loud and clear call is therefore sent to the National Assembly to right the wrongs in the budget starting from cutting down its expenditure by not less than 50 per cent. A good part of the votes are not in tandem with the aforesaid philosophy of cutting down waste and austerity. The second call is to the political parties in opposition. What are you waiting for? What are your alternative views on the budget? Let Nigerians hear them. The final call is to Nigerians of all shades of opinion. If you prefer to stand aloof and watch your budget become an engine of oppression and mischief, so shall it be!

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