“For 2018, the Federal Government part of it has been concluded with hope that it will be submitted to the National Assembly in January.”
Aso Vakporoye, Deputy Director, Economic Growth, Ministry of Budget and National Planning.
Aso Vakporoye claimed to be speaking for the Minister who, naturally, was unavoidably absent to deliver the bad news himself. But, is it possible that Vakporoye received the wrong script from the Minister’s office? We waited for three days for a disclaimer but none came. So, it is a fact that the 2018 budget will be delivered late. After the very late passage of the 2017 budget in late May this year, and the adverse consequences still unfolding, economic policy observers would have thought that the Federal Government will not be the cause of any delay in getting another budget passed on time in 2018. We were wrong.
Just as you think that Buhari’s Economic Management Team, EMT can sink no lower than they have, they spring another unpleasant surprise. It has been a series of mishaps right from the first 2016 budget prepared by the Buhari administration in 2015. That was when the entire world was treated to the theatre of the absurd about “Missing Budget”. How on earth a document which was circulated to over 1500 stakeholders before it was presented by the President to the National Assembly, NASS, could be missing has remained a mystery till today.
That absurdity was soon superseded by the allegation of padding with government officials talking from two sides of the mouth at once. Two Ministers swore the budget could not be padded. The President insisted that it was and vowed to punish the culprits. Till today nobody had been indicted or punished for padding the 2016 budget.
When everybody expected the FG to have learnt some lessons from the debacle of the 2016 budget, the EMT was there again to astonish us with more unwanted surprises for 2017. The 2016 budget was a signal failure. Instead of 2.36 per cent Gross Domestic Product, GDP, growth promised, there was a recession – which was predicted by most economists but the dreamers of Aso Rock. One variable alone accounted for most of the negative variance between budget and actual. There was significant shortfall in total revenue budgeted and what the government eventually collected. And, one commodity alone accounted for ninety per cent of the revenue shortfall – crude oil. Nigeria earned far less than was budgeted for 2016.
Again, financial budgetary experts would have expected the EMT to learn from that experience when preparing the 2017 budget. A glance at the 2017 budget and the revenue estimates reveals that the FG has fallen into the same trap as in 2016. With nine months gone in 2017, there is gross revenue shortfall once again. And, revenue from crude oil is once again the major culprit. The budget promised more than 2.6 per cent GDP growth this year. FG is faced with -0.91 and 0.55 per cent GDP growth in the first and second quarters respectively. Cumulatively, by half year 2017 we are still in negative growth territory.
After the self-deceptive euphoria generated by the announcement of 0.55 per cent growth last month, FG officials are now dialing back preparatory to the release of the third quarter result. The Governor of the Central Bank and the Minister for Budget and National Planning have issued statements warning that the “economy is still vulnerable to shocks”. The drummers have stopped beating and are asking those who foolishly jumped up to dance in September to go home. Independent economic forecasters have already finished their own work for 2017.
The International Monetary Fund, IMF, predicted 0.8 per cent, PriceWaterhouseCooper, PWC, announced 0.7 per cent. We think it will be closer to 0.6 per cent. The FG itself had reduced the expectations to 1.9 per cent earlier in the year. Given the stream of mostly negative data coming in since the Q2 result was announced, even the FG must doubt its own estimates. Even 1.9% if achieved will impoverish us more.
It is against the background of all these colossal failures that we must view the announcement about budget being submitted in January 2018. Obviously, there is nobody at the top of the EMT who understands that time is also an economic resource – ranking in every respect with funds, human resources and capital. That is why they waste it prodigiously. The attitude to time was inherited from the President – right from the time he was selected as the candidate of the All Progressives Congress, APC in 2014. Anybody running for President or Prime Minister of the country lays out an economic programme starting with his view of the economic situation as it is; the direction it is going, whether good or bad; what he intends to change and why; and the best would even put a price tag on the economic programme. Buhari did none of this. He would wait until he became President; he did and still waited.
Benefiting immensely from the nation’s disenchantment with Jonathan, he and his party promoted a vague “Change Agenda” totally devoid of any economic blue print for governance. I can state this categorically because of two trips made to Abuja at my expense to get the APC Presidential candidate to allow us to update the Economic Blueprint which was developed for him, largely at my expense, when he was the candidate of the Congress for Progressive Change, CPC, in 2011. In 2011 as in 2015, I discovered to my sorrow that we have a candidate who does not give a damn about economic development; who is confused by economic principles and cannot apply them…..
To be continued…..