With the inclusion of our current condensates production of 400,000 to 450,000 barrels a day, we have been able to produce more than two million barrels a day at some period this year.” Senator Udo Udoma, Minister of Budget and National Planning. July, 2017.
If there is need for more evidence that the Federal Government of Nigeria under President Buhari is one in which one hands knows not what the other is doing, the Minister of Budget presented it as he also unveiled the proposed 2018 budget in Lagos in the last week of July, 2017. According to the Minister, the 2.3 million barrels per day used as the foundation of the budget is achievable. And he gave the reasons above. It was disappointing in many respects. Given that this is the third budget the Minister would be presenting, it is perhaps pertinent to review his track record with respect to budgeting crude oil volumes.
The 2016 budget presented was based on production and export of 2.2 barrels a day. Incidentally, the same figure was used from 2012 to 2015 by Dr Ngozi Okonjo-Iweala, Minister for Finance under Johnathan and not once in four years was the target achieved. Ordinarily, that should have cautioned anybody else charged with preparing Federal budgets to take a critical look at that figure with a view to finding out why government failed each and every time. Doing the same thing over and over again and expecting a different result is pure sanity according to the Chinese. But, Nigerian leaders never learn from the mistakes of others or their own.
The Minister was warned when the 2016 budget was based on the same figure. Then as now, he insisted the estimates were achievable. They were not achieved and that was partly responsible for the huge deficits generated. Surprisingly, the Minister again repeated the same figure for the current year. July has ended and in no single month was it possible for Nigeria to produce and export up to 1.8 million barrels per day – despite the exception granted to the country by the Organization of Petroleum Exporting Countries, OPEC. The average this year is closer to 1.7 million barrels than 2.2 million with five months left. Call it what you want, it is not realistic to expect average of 2.2 this year.
The statement credited to the Minister above merely shows what happens when officials of government are wedded to fantasy instead of facts. From figures available at OPEC headquarters in Vienna, and easily obtained by anybody diligent enough, Nigeria has not exported 2.2 million in any month this year. At any rate, even if the country produced “more than two million barrels at some point this year” as the Minister claimed – which is disputable – does that represent the average. Chioma Ajunwa collected gold medal for a jump she had never again achieved. Would anybody bet she will do it everyday?
At any rate, two important facts argue against the estimates the Minister presents for 2018. Both are easily verifiable – unlike the wishful thinking that underlies the budget proposal. First, the same OPEC which exempted Nigeria from production cuts in the past has changed its mind. At its fourth meeting in St Petersburg, Russia, OPEC has pegged Nigeria’s exports at 1.8 million per day. No Minister of Budget in any OPEC country can seriously propose a figure higher than that for his country without risking painful repercussions. So, why is Senator Udoma proposing and defending a figure rendered unrealistic by OPEC’s collective decision. On that alone, the National Assembly should simply return the budget proposal to the Presidency for review; or throw it into the waste bin.
Second, Sen Udoma apparently works for another government other than the Federal Republic of Nigeria. Buhari’s government like others before it has been making a lot of noise about reducing our dependence on crude oil. But, here in the 2018 budget proposal, the Minister is increasing the addiction to crude revenue simply because the Federal Government lacks the will and wisdom to collect the taxes which could provide more revenue than oil any time. The Nigerian Ports Authority and the Federal Internal Revenue Service are so porous as to allow immeasurable amounts, in dollars, go uncollected each day which could fund the budget without borrowing. Serious-minded Nigerians must ask themselves if we can continue to be insulted by annual budgets promising 2.2 million barrels per day when the target had not been attained in six years and, bearing OPEC in mind, will certainly not be reached in 2018. So, why is the Minister allowed to repeat the same mistake at our expense? The whole thing reminds me of that excellent observation by a former US Secretary of the Health, Education and Welfare, John Gardner who said: “An excellent plumber is infinitely more admirable than an incompetent philosopher. A society which scorns excellence in plumbing because it is humble activity and tolerates shoddiness in philosophy because it is a exalted activity will have neither good plumbing nor good philosophy. Neither its pipes, nor its theories will hold water.”
We continue to delude ourselves that Nigeria will grow to become one of the economic giants of the world. But, we also continue to tolerate shoddiness in governance. As far back as 2009, late President Yar’Adua had admitted that no budget had been fully implemented from 1999 to that year. We can now add all the years in between to our years of failure to execute budgets which were defective from day one. Now, we are being called to “Town Meetings” to be told the same tired story about exporting 2.3 million barrels of crude oil per day. We tolerate shoddiness in budget preparation. Nothing good can come out of them.
Depend on it.