Federal Budgets and Pullouts Archives - Centre for Social Justice

2025 FEDERAL BUDGET FRIVOLITIES

Center for Social Justice — Mon, 13 Jan 2025 15:20:17 +0000

The 2025 Budget is here. Nigeria is undergoing very serious economic and fiscal crisis. There is stagflation. Inflation rate is currently at 34.6% while food inflation is at 39.93% due to high prices of staple foods including rice, maize, yam, guinea corn, vegetable oil, etc. Economic growth is tepid at 3.46% while unemployment is at all time high. The exchange rate of the naira to the dollar at the official rate of the Central Bank of Nigeria is over ₦1,500 to $1, while the street value is over ₦1,600 to $1. The monetary policy rate is at all time high of 27.5% while interest rates from financial institutions are in excess of 30%. Over 63% of Nigerians are multi dimensionally poor and majority live below the poverty line while debt service is in excess of 45% of aggregate expenditure. Insecurity is rapidly spreading to different parts of the country, including new terrorists’ groups that were previously not in operation in Nigeria.

In the 2025 executive budget proposals, the aggregate expenditure is ₦49.740 trillion, the expected revenue is ₦36.352tn while the budget deficit is ₦13.387tn. Debt service will gulp ₦16.327tn. With this scenario, the reasonable expectation is that every available resource in the 2025 federal budget proposal should be targeted at concrete deliverables aimed at reducing poverty, creating jobs, improving infrastructure and stimulating economic growth. Indeed, frivolous, inappropriate, unclear and wasteful expenditure should be eliminated from the budget. A large part of the funding for the budget will be borrowed and it will be foolhardy to borrow and waste the borrowed funds. There are so many projects that are vaguely described and without location; a play on words using terms like empowerment and sensitization, etc.

The State House and Presidency vote is suffused with bloated routine maintenance, renovation and repair work, purchase of SUVs and vehicles in the billions of naira. These are not priorities for spending borrowed money. Service Wide Votes continue the tradition of lump sum votes for vaguely described expenditure items, which at the end of the year, cannot guarantee value for money. The vote of the Ministry of Agriculture and Food Security is suffused with projects that have no locations, class of beneficiaries and sometimes no clear deliverables. This has been the norm in agriculture budgeting over the years. The most troubling part of this proposal is that many of the unclear proposals are to be funded from debt. Borrowing and demonstrating a clear intent to mismanage the resources is economic sabotage of the highest order and should be discontinued. These votes need to be totally repackaged and nebulous expenditure proposals made clear and to be of benefit to Nigerians.

The 12 River Basin Development Authorities sit on thousands of acres of public land and over the years, get allocations for tractors, farm equipment, implements, fish and livestock replenishment, seeds and implements, etc. They should be revenue centres that remit billions of Naira to FGN instead of the current approach where they gulp money without any meaningful contribution to the revenue. The land, machinery and other infrastructure could be capitalized for collaboration with the private sector for commercial farming that will generate revenue for government. At a minimum, RBDAs should be compelled to fund their personnel and recurrent expenditure pending when they are fully weaned of public funding.

There are many new and ongoing projects proposed by the National Rural Electrification Agency without geographic location and class of beneficiaries beyond stating the name of the state or the geopolitical zone. It is imperative for NASS to verify that such projects are actually ongoing or the exact locations of the new ones before approval. The locations should be included in the approved budget. The Agency’s budget proposal is a clear example of how not to present a budget proposal. There seems to be a deliberate attempt to propose interventions in a way and manner that cannot be monitored and project locations will only be known to the Agency.
The meagre resources allocated to the Federal Ministry of Works have been so thinly spread across hundreds of projects to the extent that money will be spent without any concrete improvements in the works sector. In the interim, NASS should prune down the number of projects and focus on a few which can be improved from available resources. Otherwise, voting N100m, N200m to major road projects (even when prudently spent) will amount to a waste of resources. Some roads even got as low as N10m. This is a joke taken too far.
So many MDAs have votes in the 2025 Budget that are not in any way related to their mandate. This should be streamlined and budget approvals should be centred on mandated activities. So many MDAs are asking for money to pay for unverified debts, purportedly from contractor arrears. This should stop and arrears which ideally is part of debts should be centrally handled and verified by the Debt Management Office.

2025 FEDERAL BUDGET FRIVOLITIES (843 downloads )

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2024 FEDERAL BUDGET FRIVOLITIES

Center for Social Justice — Tue, 19 Dec 2023 09:34:28 +0000

Nigeria is undergoing an economic and fiscal crisis of monumental proportions. The currency has been devalued officially to N750 to 1USD while the street value is above N1000 to 1USD. Inflation is at all time high of 28% year on year while Nigerians living in multi-dimensional poverty is in excess of 130 million. Debt service gulps over 80% of revenue and insecurity rules the land. In the 2024 executive budget proposals, the aggregate expenditure is N27.5trillion and the expected revenue is N18.32trillion, and the deficit is N9.18trillion. Debt service will gulp N8.493trillion. With this scenario, the reasonable expectation is that every available resource in the 2024 federal budget proposal would be targeted at concrete deliverables. Indeed, frivolous, inappropriate, unclear and wasteful
expenditure should be eliminated to the minimum. A large part of the funding of the budget will be borrowed and it will be foolhardy to borrow and waste the borrowed funds. There are so many projects that are vaguely described and without location; a play on words using terms like empowerment and sensitization, etc.
The State House and Presidency vote is suffused with bloated routine maintenance, renovation and repair work, purchase of SUVs and vehicles in the billions of naira. These are not priorities for spending borrowed money. Service wide votes continue the tradition of lump sum votes for vaguely described expenditure items which at the end of the year cannot guarantee value for money. The vote of the Ministry of Agriculture and Food Security is suffused with projects that have no locations, class of beneficiaries and sometimes no clear deliverables. This is the case in over 90% of the projects. This has been the norm in agriculture budgeting over the years. The most troubling part of this proposal is that many of the unclear proposals are to be funded from debt. Borrowing and demonstrating a clear intent to mismanage the resources is economic sabotage of the highest order and should be discontinued. The vote needs to be totally repackaged and these nebulous expenditure proposals made clear and to be of benefit to Nigerians.
The 12 River Basin Development Authorities sit on thousands of acres of public land and over the years, get allocations for tractors, farm equipment, implements, fish and livestock replenishment, seeds, processing machinery and implements, etc. They should be revenue centres that remit billions of Naira to FGN instead of the current approach where they gulp money without any meaningful contribution to the revenue. The land, machinery and other infrastructure could be capitalized for collaboration with the private sector for commercial farming that will generate revenue for government. At a minimum, RBDAs should be compelled to fund their personnel and recurrent expenditure pending when they are fully weaned of public funding.
There are many new and ongoing projects proposed in the 2024 Federal Budget by the National Rural Electrification Agency without geographic location and class of beneficiaries beyond stating the name of the state or the geopolitical zone. It is imperative for NASS to verify that such project are actually ongoing or the exact locations of the new ones before approval. The locations should be included in the approved budget. The Agency’s 2024 Federal Budget proposal is a clear example of how not to present a budget proposal. There seems to be a deliberate attempt to propose interventions in a way and manner that cannot be monitored and project locations will only be known to the Agency.
The meagre resources allocated to the Federal Ministry of Works have been so thinly spread across hundreds of projects to the extent that money will be spent without any concrete improvements in the works sector. In the interim, NASS should prune down the number of projects and focus on a few which can be improved from available resources. Otherwise, voting N100m, N200m to major road projects (even when prudently spent) will amount to a waste of resources. Some roads even got as low as N10m. This is a joke taken too far. The Federal Roads Authority Bill needs to be enacted to provide other sustainable sources of road financing and management apart from the treasury.

Eze Onyekpere
Lead Director
Centre for Social Justice

2024 FEDERAL BUDGET FRIVOLITIES (521 downloads )

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2024 Budget Personnel Call Circular

Center for Social Justice — Tue, 18 Jul 2023 09:31:59 +0000

While Nigerians were busy focusing on the 2023 elections, the Ministry of Finance released the 2024 Budget Personnel Cost Call Circular. It contains instructions on how MDAs are to prepare the personnel cost for 2024 financial year. It has special provisions for the Ministries of Education and Health. Read and digest and use it to review the personnel budgets of Ministries, Departments & Agencies (MDA’s) when they are out later in the year.

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2024 Budget Personnel Call Circular (557 downloads )

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REVIEW OF CRITICAL ISSUES IN THE 2023 FEDERAL BUDGET PROPOSAL

Center for Social Justice — Wed, 07 Dec 2022 12:40:36 +0000

The 2023 budget proposal is presented as a Bill for an Act to authorise the issue from the Consolidated Revenue Fund of the Federation the total sum of N20,507,942, 180,704 (Twenty Trillion, Five Hundred and Seven Billion, Nine Hundred and Forty-Two Million, One Hundred and Eighty Thousand, Seven Hundred and Four Naira) only, of which N744,109,468,797 (Seven Hundred and Forty-Four Billion, One Hundred and Nine Million, Four Hundred and Sixty-Eight Thousand, Seven Hundred and Ninety-Seven Naira) only is for Statutory Transfers, N6,557,597,611,797 (Six Trillion, Five Hundred and Fifty-Seven Billion, Five Hundred and Ninety-Seven Million, Six Hundred and Eleven Thousand, Seven Hundred and Ninety-Seven Naira) only is for Debt Service, N8,271,882,354,405 (Eight Trillion, Two Hundred and Seventy-One Billion, Eight Hundred and Eighty-Two Million, Three Hundred and Fifty-Four Thousand, Four Hundred and Five Naira) only is for Recurrent (Non-Debt) Expenditure while the sum of N4,934,352,745,705 (Four Trillion, Nine Hundred and Thirty- Four Billion, Three Hundred and Fifty-Two Million, Seven Hundred and Forty-Five Thousand, Seven Hundred and Five Naira) only is for contribution to the Development Fund for Capital Expenditure for the year.

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REVIEW OF CRITICAL ISSUES IN THE 2023 FEDERAL BUDGET PROPOSAL

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ADVOCACY MEMORANDUM ON THE 2023 FEDERAL HEALTH BUDGET PROPOSALS

Center for Social Justice — Fri, 02 Dec 2022 11:11:52 +0000

In the 2023 health budget, the total sum allocated to the Ministry of Health out of the overall expenditure of N20,507,942,180,704 is N1,097,703,830,504 inclusive of the N47,649,312,042 provided for the Basic Health Care Provision Fund (BHCPF). This is 5.35% of the proposed budget expenditure. This is just about one-third of the 15% Abuja Declaration commitment. However, there are other provisions related to health in the budget vis, provisions for the National Health Insurance Scheme fund of MDAs (N105,797,840,669), NHIS for Military Retirees (N4,481,145,223), NHIS for Corps Members (N5,000,000,000) and GAVI/Immunisation Counterpart Funding (N69,570,142,633). These add up to an extra N184,849,128,525. This increases the health vote to N1,282,552,959,029 being 6.25% of the proposed overall expenditure. This is just 41.5% of the Abuja Declaration. 15% of the overall budget vote would have amounted to N3,076,500,000,000. The extant health vote leaves a funding gap of N1,978,796,169,496.

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ADVOCACY MEMORANDUM ON THE 2023 FEDERAL HEALTH BUDGET PROPOSALS (559 downloads )

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2023 Budget Frivolous Estimates

Center for Social Justice — Wed, 30 Nov 2022 10:41:03 +0000

An analysis of the 2023 budget. Nigeria is undergoing an economic and fiscal crisis of monumental proportions. Nigeria is snatching economic crisis from the jaws of circumstances that support an oil windfall scenario. Instead of reaping the benefits of global oil price increase, our oil income dried up and oil authorities in the Ministry of Petroleum Resources and NNPC Limited told Nigerians questionable stories of oil theft running into 700,000 barrels a day. This amounts to about $70million a day. As at August 2022,Federal Government of Nigeria’s retained revenue was N4.23trillion while debt service gulped N3.52trillion. The implication is that 83.2% of FGN’s income was dedicated to debt service .Macroeconomic indicators like inflation, interest rates, etc., are all negative.
In the 2023 executive budget proposals, the aggregate expenditure is N20,507,942,180,704 and the expected revenue isN9,725,863,745,173,and the deficit is N10,782,078,435,531.The expected revenue is 47.4% of the expenditure whilst deficit financing will take care of 52.6% of the expenditure. Debt service at N6.557tn is 67.4% of the expected aggregate revenue of N9.725tn.
With this scenario, the reasonable expectation is that every available resource in the 2023 federal budget proposal would be targeted at concrete deliverables. Indeed, frivolous, inappropriate, unclear and wasteful expenditure should be eliminated to the minimum. A larger part of the funding of the budget will be borrowed and it will be foolhardy to borrow and waste the borrowed funds. There are so many duplicated projects; projects that are vaguely described and without locations; a play on words using terms like empowerment and sensitization, etc.
Leadership should be by example. The request of annual routine maintenance of mechanical/electrical installations of the presidential villa of N7.2bn, perpetual purchase of vehicles is not the way to spend borrowed money. The vote to NASS is a bulk sum of N169bn.The elected representatives of the people should feel the pain, hunger, frustration, hardship, misery, etc., experienced by the people and show empathy, love and a sense of fellow feeling. 50% of this sum is reasonable in the circumstances. In service-wide votes, various funds which have been replicated over the years include special intervention, special intervention SDG’s 1 and special intervention SDG’s 2. Over the years, there is no evidence of the investments in terms of improvements in the living standards of Nigerians. NASS should not approve this without details that will not just be shown to NASS but published on the website of the Budget Office of the Federation like other votes.
The National Grazing Reserves under the Ministry of Agriculture and Rural Development has been attracting votes in billions every year. It is an ongoing project. Wait a minute. Where are the grazing reserves located? The Ministry of Science and Technology, the agencies and research institutes under it have so many laudable projects with very small votes that will simply be wasted if they are invested in the current format. The resources are spread too thin that they will not scratch the surface of the challenges they intend to resolve. The Ministry needs to prioritise its activities so that available funds will not be wasted. Furthermore, the research agenda should be tied to the resolution of local challenges, with clear off takers in industries, agriculture, services, etc. It should not be academic or research for its own sake but an activity tied to specific results. For instance, the Ministry should collaborate with the agencies to focus on issues under the energy transition agenda such as production of “commercialisable” prototypes of electric vehicles, long-lasting batteries, solar panels, wind energy turbines; mini agricultural tillers, planters and harvesters, food processing, reducing post-harvest losses and etc. This would generate value for money and meet policy goals rather than the current spread which is wasting energy and resources.
After the completion of several rail tracks by FGN, it is imperative that the private sector be brought in to buy and run the coaches and wagons in a commercialized environment and pay the requisite fees to government which will be used to maintain the rail tracks and other relevant rail infrastructure. It is not financially prudent for government to borrow to lay the tracks and keep subsidizing rail transport thereafter. The relevant laws and policies should be amended to facilitate this. The insistence by the Ministry of Aviation to establish a national carrier is mind-boggling. The current votes will be wasted inclusive of previous votes to this white elephant project. Where is the diagnosis of the failed Nigerian Airways? Has anything changed since then?
The continued public funding of distribution and rural electrification projects is of doubtful legal validity considering the privatisation of the distribution subparts of the electricity value chain. The scenario is like this: FGN through the Ministry and National Rural Electrification Agency invests heavily in distribution infrastructure and extending electricity to rural areas including providing/replacing transformers and as soon as this is done, the DISCOs move in to start collection of tariffs. A clear case of DISCOs reaping where they did not sow. Even if FGN still partly owns the DISCOs, it should take inventory of its commitments post-privatisation and factor it into the ownership structure and profits of the DISCOs. There is a contradiction in continued investment of public money for private profits, especially when the bulk of the funds are borrowed.
The 12 River Basin Development Authorities sit on thousands of acres of public land and over the years, get allocations for tractors, farm equipment, implements, fish and livestock replenishment, seeds, processing machinery and implements, etc. They should be revenue centres that remit billions of Naira to FGN instead of the current approach where they gulp money without any meaningful contribution to the revenue. The land, machinery and other infrastructure could be capitalized for collaborations with the private sector for commercial farming that will generate revenue for government. At a minimum, RBDAs should be compelled to fund their personnel and recurrent expenditure pending when they are fully weaned of public funding.