2019 Budget Proposals: Plan, Policy, Budget Continuum

Budgets are not made in a vacuum. They are made within a context, being the context of implementing laws, plans and policies. They are also made with development and societal transformation in mind. Budgets are expected to be in tandem with high level national and international standards. Thus, budgetary activities, projects and programmes do not stand alone, but they are expected to fit into the larger developmental agenda. This establishes the plan, policy and budget continuum. How linked is the 2019 federal budget to the bigger policy and plan continuum? This discourse reviews some issues in the 2019 federal budget proposals and their link with extant plans and policies.

The reports of the Nigerian Extractive Industries Transparency Initiative indicate that because the federal government has failed to review the Petroleum Production Sharing Contracts with oil companies, we are losing about $1.6bn (N576bn) annually. This recommendation has been in the public domain for years, but the authorities seem not to be interested in this review, which will earn more money for the Federation Account.

Again, Nigerians suffer stamp duties deduction from their bank accounts for virtually every financial transaction. For years, this has remained unaccounted for and attempts by active citizens to get the details of what is happening to the money has met stiff resistance from the financial authorities. Just a set of story-telling that fails to answer the basic question: how much has accrued to the fund? The government is saying nothing and no one is accounting for the money. Yet, we claim we need resources to fund the budget and will rather borrow, instead of accounting for what is available.

The Petroleum Industry Reforms in the Petroleum Industry Bills (governance, administration, fiscals, community issues, etc.) have been demonstrated as having the capacity to bring in more resources from oil and gas mining. Other nations, who just discovered oil less than 10 years ago, have reformed their operations. Successive national plans have provided for petroleum industry reforms. The administration prefers the status quo. Where are the executive bills on the reforms? The Petroleum Industry Governance Bill passed by the National Assembly was met with the “say no” attitude. The President takes no initiative, waits until the legislature finishes spending tax payers’ money, but enjoys the fun of refusing assent to the bill. Yes, the Executive needs resources to build infrastructure, finance education, health, etc. However, it takes no steps to get the money in.

Now, to the expenditure side of the story. In the power sector, we are still voting money (N17.5bn) for the National Rural Electrification Agency at a time we have privatised the Distribution Companies and given them exclusivity in their areas of operation. The mandate of this Agency is now of doubtful legal and policy validity, considering the mandate of the privatized DISCOs. It is not proper that government will use public funds to continue putting up infrastructure and thereafter, DISCOs immediately begin to charge fees and collect tariffs from Nigerians. Clearly, this is a case of DISCOs reaping where they did not sow.

DISCOs should invest to expand access to electricity. Even the idea of a Rural Electrification Agency being centralised in Abuja with a mandate to electrify remote far flung communities is repulsive in a federal structure of governance. If government must continue investing in rural electrification, this money can be given to the states and local government councils to undertake the assignment.

Yes, we all know that the DISCOs are broke and have no capacity to invest to improve their areas of operation. They are even not in a position to provide meters, to collect due tariffs and debts and remit same to fund the electricity value chain. The solution should not be in continued government use of public funds to shore up a bottomless pit that has no foundation to hold the new materials being poured in. If, as it has turned out, the DISCO privatisation process has failed, it is time to acknowledge that it has failed and find lasting remedies through a re-engineering process involving all stakeholders. Any more public investments in a failed experiment will increase the quantum of waste.

In the housing sector, the overall policy plan is to let the private sector drive investments in housing and funds are pooled through the National Housing Fund for onward disbursement to beneficiaries through the primary mortgage banks. However, the 2019 budget proposes N30bn for the “Federal Government National Housing Programme Nationwide”. Thus, Nigeria has moved from the private sector-led housing model to voting huge sums for housing. This is not sustainable either in the short or long run.

The National Housing Fund should be revitalised so that contributors can benefit from their contributions through affordable mortgage finance. We have travelled this route of government funding the construction of housing units across the federation and it ended in being a drain pipe that fueled corruption without delivering affordable housing to majority of Nigerians. Why are we insisting on redoing a failed experiment? Why has the Minister failed (after four years of being in the saddle) to present a plan for the revitalisation of the National Housing Fund?

The Ministry of Transport plans to invest about N36m in the provision of a transit hotel at Murtala Muhammed International Airport in Lagos. This expenditure head also received a vote in the 2018 approved budget. But building and running a hospitality business like a hotel is clearly the business of the private sector and government has severally failed in its attempt to manage such enterprises in the past. Again, the Ministry requests N200m as consultancy for the establishment of a national carrier; establishment of a national carrier (appointment of transaction adviser and others) at N500m; and working capital for national carrier of N8bn. These raise so many posers. Why did we liquidate Nigerian Airways, if we want to float another carrier? What has changed or what lessons did we learn from mismanaging Nigerian Airways? After the misadventure of 2018 and the resources that were wasted in that year chasing the shadows of an imaginary airline, these requests are simply insulting to the sensibilities of decent tax payers. Again, another sum of N700m has been voted for “strategic partners for public partnership projects in the aviation sectorroadmap”. What exactly is this vote for within the context of the votes for a new airline?