“The more things change, the more they remain the same” — especially in Nigeria. No single budget was fully implemented since 1999. In 2016, a new twist was added to budgetary lawlessness. Funds from 2016 were authorized to be spent until the end of April 2017 by the Accountant General of the Federation. The Buhari administration had taken executive lawlessness a step further than its predecessors. By not protesting or even vetoing that measure, the National Assembly, NASS, had allowed an unhealthy precedent to be established which might soon become the new normal. We were treated to an early warning of this possibility last week.
On Tuesday October 3, 2017, the Senate Appropriation Committee headed by Senator Danjuma Goje in a meeting with the Minister of Budget and National Planning as well as the Minister of Finance were bewildered when the Finance Minister told them that all the nation can expect for capital appropriation for the balance of 2017 is a mere N100 billion. That will bring the total for this year to N450 billion compared to the budget which stood at N2.36 trillion. In plain language, it means that only 19.6 per cent of the capital budget will be available this year. The Ministers were, of course, quick to announce that the projects which will not be funded this year are not lost as the funds will be made available next year once the Senate approves the loan requests made by the Executive branch. Altogether about 60 per cent of this year’s capital expenditure will be made in 2018 – raising the possibility that the Accountant General might again unilaterally extend spending on 2017 to June or July next year.
That possibility prompted one of the Senators to express concern that the way things are going, we might lose an entire budget year. He was only half right. In fact, what should concern all of us is the total and willful disregard for the Appropriation Bill which is a law with an expiry date. Every budget approved to run from January to December should be terminated on December 31 every year. Any expenditure not made or projects not delivered should be regarded as part of the failure of the year’s budget. To spend money in March or April and backdate the expenditure to a time in the previous year makes a mockery of public accounting and it is ridiculous and probably illegal as well. Nigerians expect any government to think carefully about the budget presented to the NASS – the revenue and expenditure estimates. In 2016 and 2017 the Buhari administration has demonstrated an uncanny ability to over-estimate the revenue expected; to under-estimate the debt burden; to promise lower exchange rate than what eventually prevails; to promise more GDP growth than can ever be delivered and to end up in the fourth quarter revealing that most of the promises made in the budget were based more on politics than on economic realities.
The unfortunate aspect in all these is the fact that in all cases to date, there have been those who have drawn attention to the shortcomings in the budget as presented. They have been ignored until irrefutable facts destroy the fantasies that underlie the government’s proposals. Two issues should help illustrate the point.
Most of the loan requests before the NASS are not accompanied by any specific stream of revenue that would help repay the loans. In fact, some of those requests seek to raise new loans to help repay old debts and to borrow more. A good chunk of the loans will fund government’s Social Intervention Programme, SIP, which would have gulped 12.5 per cent of the budget without returning a kobo to the Treasury. It requires no great intelligence to understand that for a poor nation, borrow-and-spend policy while popular with politicians is a sure path to economic destruction.
Lethargy in pursuit of revenue generation is also very much evident. Re-establishing toll gates – which should have occurred as early as 2015 – is just receiving attention now and very slowly as if Nigeria has all the time to generate funds. The same is true of the Value Added Tax, VAT, review which has taken for ever. Had toll gates been re-introduced by January 2016 and VAT, especially on luxury goods, increased this country could have earned close to N500 billion more than we did. That also means that we could have had more of our own Internally Generated Revenue, IGR, to spend and that much less to borrow.
Perhaps the most painful programme for Buhari and the All Progressives Congress, APC, to jettison or reduce in scope is the SIP. Because it was a vote-catcher for them, politicians are reluctant to drop a promise even when it is obvious that it has become a heavy burden and impossible to discharge. Thus, in his October 1, 2017 address, Buhari mentioned the SIP and the N500 billion budgeted each year in 2016 and 2017, but he deliberately omitted to mention how much of the N1 trillion promised in 2016 and 2017 had been released. As one with a great deal of integrity, he could not tell an outright lie. As a politician, he could not tell the truth – that less than 20 per cent of the funds for SIP had been released. Consequently, the programme is being implemented in bits. Most school children have been fed for only one month. It makes no sense. So, why continue it?
What is the definition of failure under the circumstances?