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Budget: An Annual Ritual Of The Ruling Elites



Nigeria's budget

By Ali Abubakar Sadiq

The High priest is escorted down the Isle by stern looking men as he made his way across the sacred shrine towards the sacrificial altar. On the podium he paused and surveyed the chosen apostles in attendance representing every coordinate across the 360 degree swathe of the holy land. Excitement hung over the rotunda as all eyes riveted on the high priest in palpable expectation. The high priest in his late seventies looked down at the scripture in his hand, cleared his throat and begin to read the sharing formula verses out of the booty chapter, which has been an annual ritual drawing the blood of the sacrificial lamb to sprinkle and bathe the distinguished priests of this hallowed congress: Invoking strength and immunity for the next twelve moons.

You might easily think the above is culled from an ancient literature or scene from a historical Hollywood movie, right? Far from it.

The above scene is actually saritization of 2021 budget presentation by President Muhammadu Buhari to the joint session of our national assembly. A worn out ritual bequeathed to us by the present 4th Republic since 1999 that is increasingly becoming monotonous without meaningful impact to either society or economy.

Today as a country, our biggest setback is being a divided nation along the label of either/or, with regard to all our socio-political existentialities. Most of us consciously and subconsciously divided ourselves as Hailers and Wailers, thus killing off any chance of a hybrid label of hailer/wailer. For a nation to succeed, majority of its citizens must be hailer/wailers so that they may applaud the good policies and stand against the bad ones. Every government needs sincere and constructive criticism laced with credible analysis, if it is to function successfully.

For my analysis on our budgetary system, I hope for once, rather i beg please, that we will discard the hailer or wailer label and dorn the hailer/wailer garb in scrutinising the argument objectively.

In the 2021 budget the Federal Government proposes the sum of 13.08 Trillion Naira (the highest so far in our history) despite the slowdown in economic activities due to corona pandemic. Out of this hefty sum the first glaring irresponsibility of the budget is contravening the 2007 Fiscal responsibility act by allowing a deficit of 5.21 Trillion Naira which clearly went above the threshold of 3% pegged by the act. At $447 billion dollars GDP in 2019 the current deficit amounts to over 3.5% and it is almost certain that the projected GDP in 2020 will fall sharply, due to the pandemic, thus the deficit will even be higher than projected.

The biggest lump of the budget goes under recurrent expenditure which will gulp 5.65 Trillion Naira, amounting to 43% of the budget to cater for the running of the three tiers of government: civil servants, political office holders, the over 40 MDA’s with their over 400 hundred parastatals, nonetheless an insignificant percentage out of the over 200 million Nigerians.

When Sunusi Lamido cries foul way back in 2012 about the unsustainability of our recurrent expenditure vis a vis national development, he was almost crucified. Around that time too, the Professor Anya. O. Anya committee report, also pointed out that the federal bureaucracy is unsustainable.

A report released by the Federal Ministry of Finance then, shows that of the 16.44 Trillion Naira disbursed from the federation account, over a period of 8 years, 5.2 Trillion (32%) was spent on just 17,474 people in government (mere 0.0001%) out of the 180 million Nigerians at that time.

The worst fraud under the recurrent expenditure is what was termed capital recurrent expenditure. For example in 2010, budget provision approved 1.19 million for the purchase of canteen and kitchen equipment in the villa and the same item was approved in the following year’s budget at 489 million.

I believe we couldn’t forget how Aso Rock clinic, after having gulped 11 billion, yet the First lady claimed there were no syringes and the X-ray machine wasn’t functioning. It is also fresh in our memories during the NDDC corruption saga when the threat of exposing conniving legislators, resulted in suspending indefinitely the hearings and an officer of the NDDC claims on national TV that a contract could be awarded twenty times, monies collected but never to be executed.

Obasanjo tried to implement the monetization policy way back in 2004 which operates for only two years, before Babagana Kingibe, the SGF under Yar’Adua, reversed the policy which could have seriously reduced the recurrent expenditure through stoppage of provision of vehicles for 996,744 civil servants, 1,448 political office holders, 469 Federal legislators and 1,152 Judicial officers, among others.

When Buhari came to power we jumped and danced in joy full of expectations that nigh comes our savior. The first signal that further strengthened that belief was the implementation of TSA which the previous administration concieved but failed to implement. Buhari’s first budget, in 2016, wasn’t much different from previous ones though that was excusable considering he just came on board. The 2016 budget as usual credited 65% towards financing the extravagant lifestyle of those in governance (recurrent expenditure 43%) and of their foreign masters (in debt servicing 22%).

Out of the remaining balance, capital expenditure, which also mainly serves elites interest in contracts of projects between contractors and government oficials gulped 29%. Virtually the larger society benefitted next to nothing as many of the projects under capital expenditure were not executed either under the same budget or entirely. Capital projects that are likely to see the end of the day are usually like the ones i gave example above (Aso Clinic etc) which naturally found their way into the pockets of contractors and government officials.

The following year in 2017 our hope risen as the new budget saw decrease of 3% in recurrent expenditure and sharp increase of capital expenditure to 31% in a budget of 7.29 Trillion. Our Lords share in that budget dropped from the previous 65% in 2016 to 62%. That is very encouraging, right?

Despite the economic downturn due to oil price plummeting, Nigerians are resolute in their hope for the future and the Buhari government cemented that resilience with the 2018 budget of 9.12 Trillion and despite the padding brouhaha and hostile relationship between the legislature and the executive, the budget, after long delays was passed, though surprisingly the percentage of recurrent expenditure and debt servicing combined, surged up once again to 64% of the total budget.

2019 was no different as that year’s budget saw a significant rise in recurrent expenditure and debt servicing, becoming the highest since the inception of the administration at 69%.

The biggest surprise came in the 10.3 Trillion Naira 2020 budget with a whopping 73% dedicated to our Lords within and without. Unfortunately the outbreak of Corona pandemic came knocking but guess what? The government reviewed the budget. One would expect a downwards review due to the lockdown, glut in the oil market and disruption of distribution chain. But no, it was reviewed upward to 10.8 Trillion in the middle of a pandemic.

In the last five years of this government’s budgetary allocations, the sum of 44.07 Trillion Naira was budgeted and out of that amount 71% of it goes the usual way of recurrent expenditure (18.07 Trillion) and debt servicing (that would gulp 13.5 Trillion) making a total of 31.5 Trillion.

Out of the 44.07 Trillion budgeted only 12.5 Trillion is set aside for capital expenditure. Can anyone point us infrastructures across the country commensurate to half of that figure?
This government resurrected one of the most important infrastructural project ever envisioned in this country which had been in limbo for 40 years, the Mambila Hydro power plant.

This project could change lots of narratives in this country and it was signed in 2017. The lifespan according to the contract is 6 years. It was one of the cheapest project considering Nigeria will only provide 850 million dollars out of the 5.7 billion dollars the Chinese are bringing as long term loan into the project.

Since 2018 this project consistently appear in this country’s budget, including the recent 2021 budget but it has not taken off yet and this administration has 3 years left. My question is, is mere 300 billion (a little over 1%) out of the last three year’s budget of 28 Trillion too difficult to be committed in favour of such meaningful project?

The most worrying issue, beside budgeting mispriority, is our rising debt profile which in the first quarter of this year reached 33 Trillion (87 billion dollars) under this administration from 2015. Does the reality on the ground in our quality of life, infrastructural development and income disparity correlate with such amount?

There is nothing wrong in taking loans to fund budgets (every country does) but we took loans year in year out but the reality on the ground doesnt reflect the humongous amount. Look at Lagos-Ibadan rail, which has been on going through four budgets, Abuja-Kano highway is entering it’s third budget, Mambila it’s fourth, 2nd Niger bridge it’s fourth, so are Baro, AKK pipeline etc. None of these projects lifespan exceed 6 years in their contracts. What is happening?

The rising debt portfolio has an adverse effect on our economy as the domestic debt keeps our lending rates (personal, corporate and mortgages) perpetually on double digits which slows economic growth and the foreign debt will also continue to exert perpetual pressure on our currency to remain weak against major currencies and hovers on devaluation. Yet we still believe things are working for the better in this country?

Despite all these extravagance, mispriority and nonchalance to real development, government is imposing taxes left, right and center on ordinary Nigerians at a time when others are cancelling taxes and doling palliatives to support businesses.

Hypocritically, the more severe this government austere measures deepens the impoverishment of the masses as borders are closed without commensurate agricultural policies, fuel and energy hike (back to back) leading to more job losses as farmers in agricultural hubs of the country are too insecure to farm, yet our ruling elites are becoming more ostentatious as they increased budgetary provisions for themselves without any effort whatsoever in curbing their extravagance and indulgence.

They allocated 582 million for food and refreshments alone in the presidency (though at least the 72 billion budget of the presidency is more transparent than the opaque 128 billion of the National Assembly).

No country ever succeeds without equitable distribution of wealth, as that is what unleashed the potentials of its youth and it’s small scale industries which are the engine of economic growth. Education is usually the number one priority of committed governments but here government operates as if it is the enemy by starving it of funding.

My dear reader everything is wrong with our policies and economy, our budgeting system is a sham and fraud across federal, state and local governments and it didn’t start with PDP though they exacerbated it, as is obvious APC is continuing the legacy.

If we are going to budget half of what we used to and judiciously channeled it towards the majority of Nigerians, not the exclusive 5% of our elites, we will definitely see positive changes in few short years (what we expected this government to have done in these 5 years).

Make no mistake, our dream will continue to be an illusion unless we decide to discard the hailer and wailer mentality and embraced the hailer/wailer hybrid for our common good.

We must realize that budget in Nigeria is no more than a ritual that sacrifices common man’s interest and accentuates the raping culture foisted on us in the name of democracy by election of the elites, by the elites and for the elites.

Ali Abubakar Sadiq writes from Kano

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