Can Nigeria recover with 2016 budget?

Minister of Finance, Mrs. Kemi Adeosun

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Nigeria has had promising fiscal budgets and monetary policies in the past but implementation has always been the major hindrance. Consequently, trillions of naira had escaped our coffers while our legislators slept off on their oversight functions. This sad development is also not unconnected to wasteful spending and financial recklessness by government functionaries, particularly the executive and legislative arms of government. So, while President Muhammadu Buhari was addressing the joint session of the National Assembly during the presentation of the 2016 budget, he highlighted that his administration was enhancing the utilisation of the Government Integrated Financial Management Information Systems with a view to improving financial management of the proposed N6.08tn, having established the Efficiency Unit across the MDAs.

Buhari also said that the budget was designed to revive the economy through inclusive growth and jobs creation. This necessitated the increase in the capital expenditure from N557bn in the 2015 budget to N1.8tn in the 2016 budget, representing 30 per cent of the total budget of N6.08tn. However, as brilliant as this may seem, financial experts have expressed divergent views, particularly in the area of our deficit cum debt portfolio. This is not unconnected to the N1.84tn for both domestic and foreign borrowings. It is illogical to borrow money for consumption at the expense of capital expenditure that would rake in significant returns.

Apparently, the present structure of the government is unnecessary extravagant in their expenditures. It is incongruous with reason that state governments are kicking against an upward review of the N18, 000 minimum wage of their workers, yet they keep on increasing the cost of running government at the expense of the common man. It is equally absurd that despite the preposterous allowances being grabbed by our lawmakers, the sum of N47.7bn is being allocated for the purchase of new vehicles by the National Assembly in the 2016 budget, a situation the President has shown displeasure to. 

Although Mr. President has expressed his gritty determination to run a lean government as he pursues significant and judicious implementation of the 2016 budget, the quota that is habitually being consumed by recurrent expenditure is disturbing. Even though he has equally assured Nigerians that his administration will devote significant portion of the recurrent expenditure to institutions that provide critical government services, concerned Nigerians have also expressed fears on the margins. Nonetheless, the President is convinced that the newly injected leadership at the helm of affairs of revenue generating agencies with revenue projection of N3.86tn is a key factor in realising and maintaining the desired stable macroeconomics, while inflation will also be prudently managed.

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Another key item that is central to the budget is the oil benchmark price of $38 per barrel with production estimate of 2.2mbpd. Apparently, the oil benchmark price is the lowest in the history of our fiscal budget. This development is not unconnected with the volatile situation in the global oil market. In the past, non-remittance of revenues into the federation account has been a major factor militating against the implementation of fiscal budgets. So, in order to block those loopholes which give stimulus to reckless squandering and siphoning of public funds, Buhari introduced the Treasury Single Account with a view to harmonising government generating agencies accounts and cash flow. Interestingly, according to the President, N1.5 trillion had been recovered to the TSA.

Nigeria has suffered colossal loss by the invasion of the “Amalekites” over the decades. It was melodramatic when Buhari broke down in tears while winding up his campaigns for the 2011 Presidential election, having lost in 2003 and 2007 elections respectively. He did not weep because he was a loser. Rather, he wept for the extremely poor and vulnerable Nigerians, whose “Ziklag” (national treasury) has been ruthlessly looted, while its institutions are left demoralised. The 2016 budget is a litmus test to test the economic prowess and political sagacity of the APC led-Federal Government.

Even though the Trade Union Congress has foretold a tougher economic situation in 2016, the budget is a good start for the new government to bring our economy out of the woods. The President may not have all the technical know-how, but we cannot deny the nerve he has got to pursue the “Amalekites”. However, it will take concerted efforts, especially the judiciary, to overtake those “Amalekites” and recover all the loot. Those looters must be legally arrested, transparently prosecuted and lawfully jailed, while the loot is being recovered.