The Nation Newspaper

Tag: Budget 2019

  • Budget 2019 at last

    •Time to end the executive-legislature annual bickering over the bill in Nigeria’s interest

    ON  May 27, President Muhammadu Buhari signed the 2019 Appropriation Act. The legal document, which should guide the 2019 fiscal year, came five months into the year. The President had presented the appropriation bill before the National Assembly on December 19, 2018, and it took the lawmakers about five months to pass it as law. Significantly, the 2018 Appropriation Act was signed on June 6, 2018; in both instances after much bickering between the executive and the legislature.

    Indeed, at the presentation of the 2019 Appropriation Act, the President was heckled by the lawmakers, especially members of the opposition party. In their post-presentation comments, the lawmakers accused the president of lethargy in preparing and presenting the appropriation bill, while the presidency laid the blame for the unruly conduct at the budget presentation on the lawmakers who lost their tickets to contest in the last general elections.

    While the two arms bicker, the national economy is at the receiving end of the unpredictable fiscal policies of the government. Between 2015 and 2017, Nigeria suffered a depressed economy. While technically the nation is out of depression, the margin of indices shows that we could regress, if common sense and patriotism do not prevail in dealing with the budget.

    Luckily for President Buhari, he has another chance to start afresh, when new leaders and lawmakers emerge in a few days’ time. In his parting shot at the Senate President, Bukola Saraki, and Speaker Yakubu Dogara, the President accused the duo of less than stellar performance in office. He blamed the late passage of the budget on their lack of patriotism. While denying the accusation, Speaker Dogara accused the President of late presentation of the bill, very close to the end of the year, since he took over in 2015.

    The legislative arm also laid the blame for the delay on the refusal of the ministries, departments and agencies (MDAs) of government to come before relevant committees to defend their proposals. Another issue that has caused friction between the legislature and executive is about who has the final say on what comes out as the Appropriation Act. In 2018, President Buhari nearly refused to sign the act, accusing the legislature of padding the bill sent to them, with the so-called constituency projects.

    With both parties not willing to approach the courts to determine the spheres of influence and constitutional authority over the making of appropriation act, the bickering over constituency project may again rear its ugly head. However, we hope the fear of the consequences for such unnecessary braggadocio, which could result in another recession, will compel the disputants to collaborate in the national interest.

    As the nation awaits the election of new leaders for the ninth National Assembly, the President can lobby for the emergence of people he believes to be credible leaders. It will not be acceptable to be lax and merely blame the legislature at the end of the day. On their part, whoever emerges as Senate President and  Speaker of the House of Representatives must realise the urgent need to provide the legislative framework for the executive to provide employment, security and national cohesion.

    The Appropriation Act provides the bedrock for the progress of the nation in all spheres. The executive and the legislature must therefore collaborate to provide a timeous and effective framework for national survival and progress. The promise of next level by the All Progressives Congress (APC) -led Federal Government must manifest in early submission of the appropriation bill, and passage before the end of the preceding year of the budget.

    We should return to the budget cycle of January to December.

  • Budget 2019: Fowler and Ali as metaphor

    In political circles, the common saying is that “money is for spending”. Nothing confirms this again than the action of federal lawmakers and their counterparts in Lagos few days ago. In passing their budgets – albeit belatedly – at separate sessions in Abuja, the legislators unilaterally topped up the budget estimates submitted by the executive branch.

    Whereas the federal budget was raised by almost N90 billion, N21 billion was added to that of Lagos. The Abuja lawmakers were more forthcoming on why they hiked the federal appropriations bill. The reasons, we were told, include provision for the severance pay for lawmakers and legislative aides as well as a special intervention of N10 billion in Zamfara due to the ongoing security operation there to curb the upsurge in criminality.

    Well, that is the easy part. Budgeting as we already know is merely a declaration of intent to spend. The real challenge is how to generate cash backing for the huge figures appropriated.

    Looking ahead, experts are agreed on very modest growth forecasts in the global economy in this financial year. One, the mammoth production lines in places like China are yet to return to the high levels recorded few years ago. The implication for mineral-dependent countries, therefore, remains at best tepid.

    Since President Muhammadu Buhari came on board in 2015, there has been heightened effort to reduce the country’s over-reliance on oil by formulating deliberate policies to boost agriculture. But the truth of the matter is that it takes a fairly long time for the seed of reforms in agriculture to mature into visible fruits. It certainly requires not only coherence but also consistency of a whole range of policies to make the magic happen.

    To be honest, the Buhari administration has been getting less accolades for not only navigating the national economy from perhaps the worst recession in a generation within two budget cycles without an oil windfall, but also getting the leadership mix right in some revenue-yielding agencies such that returns from such organizations have risen astronomically.

    Perhaps the most dramatic has been the Joint Admission and Matriculation Board (JAMB) which, for the first time in its more than 40 years of existence, remitted a record N5 billion to the national treasury.

    So, by and large, the performance of the budged passed by the National Assembly will still largely depend on how far the big “cash cows” are ready to up their game. Coming on the heels of the increase in minimum wage from N18,000 to N30,000, the times ahead will certainly tax the financial creativity of governments at federal, state and council levels.

    To meet the challenge, the agencies that readily come to mind are, of course, the Federal Inland Revenue Service (FIRS) and the Nigerian Customs Service.

    With the no-nonsense Colonel Hammed Ali (rtd) calling the shots at the Customs, the revenue threshold of N1 trillion was crossed for the first in 2017. And the figure for 2018 is also in excess of N1 trillion.

    In 2011, 2012, 2013, and 2015, Customs had generated N741.8billion, N850.8 billion, N833.4billion and N904 billion respectively.

    While the figures of the last three years may appear handsome, some experts however believe the full potentials of the Customs are yet to be fully tapped. If the ports operations can be made more efficient, the income accruable to the Customs will only increase.

    For instance, access to the nation’s premier port – the Apapa ports – has remained a nightmare while the cargo-clearing process is, at best, still problematic.

    But much more spectacular is the Federal Inland Revenue Service, FIRS. In the last three years, the revenue generated by the tax board has grown exponentially. From the N3.3 trillion generated in 2016, the tax board achieved N4 trillion in 2017 and raised it further to N5.3 trillion in 2018. Why this growth has been described as very impressive is because it came at a time when the national economy was supposed to be contracting as a result of the recession that befell the country in 2014/2015.

    Industry experts are optimistic that the figures could, in fact, double within the next two or three years if the management of the FIRS under Mr. Tunde Fowler is hard-nosed enough to sustain its current bouquet of reforms.

    Part of the challenge, therefore, is to continue to explore means to synergize with state authorities through the Joint Tax Board under Oseni Elamah as the executive secretary for better results. For, higher return by FIRS simply means there is a bigger pie to share between the federal government and the states at the end of the month.

    Already, there has been a raging debate on the feasibility of raising Value Added Tax (VAT) to boost revenue at this point. But the preponderant view is that raising VAT shortly after a “token” wage increase will only impoverish the vast majority of the populace.

    What is, therefore, recommend is rather to widen the tax net such that more and more people – particularly the hitherto elusive super affluent – are not only captured but also made to henceforth pay rate commensurate to their wealth.

    Here, Fowler has undoubtedly brought his rich experience in Lagos to bear to grow FIRS’ revenue. As the chairman of the Lagos revenue board, he was credited as helping to grow the state’s IGR from a miserly N600 million at the inception of the Bola Tinubu administration in 1999 to around N8 billion by 2007. Under Fowler’s watch, the figure grew further during the Fashola administration to over N20 billion by 2015.

    It is quite instructive to note that today, roughly 70 percent of the revenue FIRS has generated in the past three years comes from Lagos. The good news is that more durable structures are being erected to institutionalize the process such that in the nearest future the system is no longer man-driven but system-propelled.

    Already, the Voluntary Assets and Income Declaration Scheme (VAIDS) the board floated last year has started bearing fruits as many folks have decided to take advantage of a unique official window to regularize the titles or the names on assets hitherto disguised. In any case, with FIRS working closely with financial institutions like banks, there is really no more hiding place for the affluent who would rather not pay taxes.

    To bring such high-net worth individuals into the tax net, the board has had to intensify its engagement with them to mutually agree on the terms of compliance. With more and more of such quiet interactions ending happily, it is believed that FIRS will announce more fantastic figures in the new financial year.

    Even more beneficial has been the deployment of technology to substantially automate the processes and ensure more efficiency in operation and cost. The old tax auditing system has been abolished in line with global best practices. Duplication or multiplication of taxes is eliminated by unifying the process for all taxpayers across the country. Another innovation is the electronic tax pay solution, a self-service channel available on all commercial banks internet banking platforms to ease the cumbersomeness associated with the existing manual method.

    Also noteworthy are the administrative reforms which have ensured that the cost of operation is drastically reduced. Gone are the days when heads of hundreds of FIRS offices across the country received a lump sum monthly over which they had discretion to spend on petrol, diesel and ancillary matters. Audit by the management after assuming office in 2015 had revealed a pattern of abuse which, in fact, impeded productivity rather than aiding it. Revenue officers who failed to meet target had a ready excuse: lack of petrol in their vehicles or blackout in the office because of lack of diesel for their generators.

    To check that, what Fowler did was to introduce a new inventory system such that officials are now only required to sign off a voucher to have their operational vehicles fuelled at designated filling stations across the country.  At the end of the month, the filling stations compile the vouchers and forward directly to the FIRS for payment. The result has been astonishing: operational costs have fallen by more than 60 percent.

    More of such creative measures are surely required to further grow the FIRS’ revenue in the times ahead.

     

    • Dr. Cyril Okafor, a financial analyst, is based in Port Harcourt.

  • Our hopes, fears on Budget 2019, by manufactures

    THE National Assembly yesterday passed the N8.916 trillion 2019 Budget.

    But stakeholders in the Nigerian economy say the passage of the bill came rather late, especially, when government was already winding down.

    They reacted to the passage of the bill, which was increased by N90 billion by the lawmakers to accommodate some expenses that were not captured in the proposal presented to them for approval by the executive on December 19, last year.

    Managing Director, APT Securities & Funds Limited, Mallam Kasimu Garba Kurfi, said the delay in the passage of the budget has detracted from its central role, given that ministers will vacate offices in the next few weeks.

    “It is late on arrival but better than none,” Kurfi said.

    Chief Dealer, Globalview Capital Limited, Mr. Aruna Kebira, said the passage of the budget, and if eventually assented to by President Muhammadu Buhari, will stimulate the economy.

    “Things will begin to take shape. Government expenditure has the most multiplier effect. In reality, government expenditure also has the greatest multiplier effect on the economy.

    “But there is limit to which the government can spend, extra budgetary. So passing the budget will give the government the needed liberty to embark on spending, hence the economy will be bubbled. Government expenditure will also create liquidity in the system, which is much needed to advance the economy, in both public and private sectors,” Kebira said.

    He said the passage of the budget will lead to the creation of more employment, savings and investments, which should impact positively on the capital market.

    “Secondly, foreign portfolio investors can begin to come into the capital market as the passage of budget will signify the readiness of this administration for the fiscal year,” Kebira said.

    The Chief Executive Officer, Sofunix Investment and Communications, Mr. Sola Oni, said a higher capital component in the newly passed budget signals the Federal Government’s resolve to invest in infrastructure.

    “But there are two issues that can call for deep thoughts: the passage is belated and there has always been a gap between policy pronouncement and implementation in Nigeria,” Oni said.

    The Director-General of the Lagos Chamber of Commerce & Industry (LCCI), Mr. Muda Yusuf, described the passage as a welcome development.

    He, however, urged President Buhari to sign it expeditiously to make up for the lost months, warning  that any further delay will impart negatively, especially on capital projects.

    He expressed the hope that there will be no major reason or area of disagreement that will make the president not to sign the budget as soon as possible.

    The LCCI chief urged policy makers to imbibe the discipline of the budget circle of January to December.

    He said: “If this budget circle is encouraged, it will enable the country to achieve expected outcomes which will guarantee robust outcome for the overall development of the nation.

    The beauty of the budget is that the capital outlay far outweighed the recurrent which is good for development.”

    A former President/Chairman of Council, Chartered Institute of Bankers of Nigeria (CIBN), Mazi Okechukwu Unegbu, said that getting the President to sign the Appropriation Bill into Law by the President remains one of the most important step.

    According to him, this year’s budget is coming earlier than those of the previous years, adding that the President may not sign if there are discrepancies in it.

    Unegbu said that once Buhari signs the budget, the next phase will be its implementation.

    The onetime CIBN chief said: “I have decided not to talk about the Nigerian budget, because the implementation is always the problem after passage. Now, once the president signs the budget into law, the next phase is implementation. And I hope he signs, so that we move to the implementation phase where I expected more commitments to be made to the capital expenditure.”

    According to Unegbu, the high rate of unemployment, interest rate, poor access to credit, and poor investment in research should be given a priority.

    Chika Onuegbu, former Rivers State Chairman, Trade Union Congress of Nigeria (TUC)), said although, it came very late, the passage of the 2019 Appropriation Bill of N8.916 trillion was “good news.”

    Onuegbu, who is also the immediate past National Industrial Officer, Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), however, decried the shoddy implementation of previous budgets, especially the capital component of the budget.

    He said: “Budgets not implemented effectively. If you look at the budget performance, you will see that not up to 50 per cent of the capital component of the budget is implemented. And it is the capital budget that matters to us. Unfortunately, there is inconsistency in the performance of the capital budget. I think this is one area that government should work on.”

    He urged the Ninth National Assembly and the executive to work assiduously to ensure that budgets are passed in January, at the worst case.

    Onuegbu said: “This is so because before the President signs the budget and releases are done, it will be in the next three months, around September. That is why early passage of the passage is very important.

     

     

    “Now that we are going to have a new National Assembly is it possible for the National Assembly and the executive to agree on what can be done to ensure that budgets are passed in January every year to ensure that people look at the budget and plan their own programmes.”

    The Chairman, Sustainable Livelihoods and Development Network for Africa, Prof Kola Adebayo, said the late passage of the budget has erased the multiplier effect it would have had on the agricultural sector.

    According to him, it would be nice to pass the budget in January to coincide with the beginning of the planting season, regretting that the sector is already in the land preparation period.

    He added that for farming season to begin without any support from the budget will make farmers not to feel the impact of its implementation.

    Prof Adebayo lamented that year after year, Nigerian budgets for agriculture had not yielded the required results for farmers.

     

  • Senate, House reconvene next week to consider Budget 2019

    REPORT of the much-awaited 2019 Appropriation Bill was laid in the Senate and House of Representatives yesterday.

    The Appropriation committees of the two chambers submitted a harmonised budget report for consideration and adoption.

    At the upper chamber, the Senate Chairman, Senate Committee on Appropriation, Senator Mohammed Danjuma Goje, submitted the report while his counterpart at the Green Chamber, Mustapha Dawaki did the same.

    Read also: Senate passes seven bills rejected by Buhari

    Both chambers did not consider the report of the N8.83 trillion Budget, proposed by President Muhammadu Buhari for the 2019 fiscal year.

    The lawmakers, who have proceeded on Easter break are to reconvene on April 24 to pass the budget, it was learnt.

    The House of Representatives, which also adjourned plenary, will reconvene on April 23 to pass the budget.

    It is not clear whether there were major changes and additions made in the money bill as proposed by President Buhari.

    Senate President Bukola Saraki had mandated sub-committees to adopt the Executive submission of the budget in place of any ministry, department or agency that failed to turn up to defend their budgets.

  • Budget 2019 Budget passage likely tomorrow

    BARRING the unforeseen, the National Assembly will pass this year’s Appropriation Bill tomorrow.

    It was learnt yesterday that the Appropriation Committees of the Senate and House of Representatives have been working round the clock to ensure the submission of budget reports to the two chambers tomorrow.

    To avoid any form of harmonisation that will further delay the passage of the bill, both chambers plan to submit the same budget report.

    On Tuesday last week, Senate President Bukola Saraki gave all sub-committees Wednesday deadline to submit their budget reports to the Appropriations Committee.

    Saraki also mandated the Appropriation Committee to submit its budget report on April 11 for consideration and possible passage today.

    Read also: Shaibu advocates more budgetary allocation for military

    But The Nation found out that the bill was not ready for submission for consideration at today’s plenary.

    The Senate President had warned that the Appropriations Committee may be forced to use Executive submissions if the sub-committees failed to submit their reports to the Appropriations Committee by Wednesday.

    Saraki described as unacceptable that only noted that only 24 out of 61 subcommittees committees had submitted their reports as at last week.

    The budget item, curiously, was not listed on the Senate Order Paper on April 11.

    A competent source told our reporter yesterday that “the Appropriation Committee is already putting finishing touches to its budget report for submission to the Senate in plenary on Wednesday (tomorrow).”

    The source added that “barring any hiccup, the 2019 budget will be passed the same day.”

  • Senate opens debate on Budget 2019

    The Senate will today open debate on the general principles of Budget 2019, Senate President Bukola Saraki assured yesterday.

    Saraki scheduled the date of the debate of the fiscal document shortly before the upper chamber adjourned plenary session in honour of a member of the House of Representatives, Temitope Olaoye “Sugar”, who was killed in Ibadan last Saturday by unknown persons.

    President Muhammadu Buhari, on December 19, last year, presented a Budget of N8.6 trillion to the joint session of the National Assembly for consideration and passage as this year’s Appropriation Bill.

    Christened “Budget of Continuity”, the 2019 fiscal document is planned to continue the country’s drive for inclusive economic growth, diversification and sustainable development.

    Saraki urged his colleagues, who have contributions to make on the budget to list their names for proper coordination of the debate.

    He said that the debate will take two days, today and March 19 to enable many senators to contribute.

    The conclusion of the debate of the general principles of the 2019 Appropriation Bill will pave the way for its reference to the Appropriation Committee for further legislative action.

    Saraki also mandated the Ad-hoc Committee on the New Minimum Wage Bill to expedite action on its assignment.

    He directed Senator Francis Alimikhena to take over the chairmanship of the committee in the absence of its substantive chairman, Senator Olusola Adeyeye.

    The House of Representatives, which had earlier debated and approved N30, 000 as the new national minimum wage as proposed by the Federal Government, also adjourned sitting for its slain member.

    The Green Chamber adjourned plenary in less than 20 minutes after resumption from the general election break.

    Speaker Yakubu Dogara regretted that Nigeria was yet to move away from politically-motivated killings.

    The late Olatoye represented Lagelu/Akiyele Fededal Constituency. He chaired the Committee on Urban Development & Regional Planning before his death.

    Dogara also announced the death of a former member, Bethel Amadi, who also died during the break.

    Amadi was former President of the Pan African Parliament between 2012 and 2015.

    The Speaker, who sauntered into the chamber at about 11.35am exchanged greetings and banters with his colleagues by the aisle before assuming his seat.

    After the opening prayers, he announced his approval of the last votes and proceedings after which he broke the news of the death of the two lawmakers.

    He called for prayers for the repose of the souls of the departed which was said by the Chief Whip, Hassan Doguwa and Tobi Okechukwu.

    Speaking with reporters after the plenary, Dogara condemned killings across the country, adding that that Nigeria should not be experiencing killings during elections.

    He said: “It is unfortunate that we lost our colleague and many other Nigerian during the elections due electoral violence. This is so unfortunate for us as a nation and even for our democracy.

    “We need to move away from this kind of experience to a better place as a nation, it is not helping our democracy.”

  • Ambode fails to present Lagos 2019 budget

    The much- awaited presentation of Lagos State 2019 budget on Monday at the state House of Assembly by Governor Akinwunmi Ambode failed to hold.

    Although the governor’s advance team arrived at the Assembly around few minutes to 3pm raising hope Ambode was on his way for the presentation, the team left the Assembly premises around 4pm before plenary even commenced with the lawmaker said to be in a parliamentary session.

    Sources at the Assembly hinted the governor was not there to present budget but hold have a meeting with the lawmakers, which was why the governor’s press crew and advance team were directed back to their beats.

    When the lawmakers eventually held plenary, nothing about the budget or the governor’s visit came up for discussion.

    Information had gone round at the weekend that Ambode would present the 2019 budget on Monday after the governor could not present it in December 2018 because the lawmakers were on recess.

    Journalists covering the State Governor and the House of Assembly had been on standby since 8.00 am for plenary to commence and Ambode to appear for the presentation.

    At around 2:30pm, the governor’s press corps was hurriedly conveyed to the Assembly following information Ambode was on the way to the Assembly to present the 2019 appropriation bill.

    Read Also: 2019: Buhari remains best choice for Nigeria – Ambode

    The advanced team of the governor was already on ground while the anti-bomb vehicle was stationed at the Assembly’s car park, while policemen could be seen around the premises, raising expectation that Ambode would present the budget unfailingly.

    At the Assembly’s lobby, journalists covering the governor’s office after waiting for about 30 minutes were told by a police officer, who claimed to be the ‘OC’ of the House, Speaker Mudashiru Obasa informed they should leave the premises as the House would not take the governor’s budget presentation as earlier expected.

    He said the Speaker was having a private meeting with other lawmakers and would not want to be disturbed.

    He insisted the speaker said the budget presentation would not be taken and ordered the pressmen to leave.

    Another aide to the speaker, who craved anonymity, confirmed the Assembly would not take the governor’s budget.

    However, sources close to the governor said Ambode informed the lawmakers since Friday that he would be coming to present the budget on Monday following successful resolution of the differences between the two arms, which hampered the presentation last year.

    The source said the lawmakers were engrossed in a meeting to iron out some differences among themselves.

  • The trouble with Budget 2019

    With the presentation of the proposed 2019 federal government budget by President Muhammadu Buhari on December 19, 2018 to the National Assembly for consideration and possible passage into law, various stakeholders in the country are on the lookout for what the budget holds for them. As much as we know that the budget is not just a document containing mere figures but rather a fiscal document that aids the implementation and realization of government plans and visions within a fiscal year, therefore, much importance is placed on it because it shows, in real terms what the economy will look like in a particular fiscal year; how much will be generated within the year; how much will be spent within the year; which sector within the economy will the government be spending more; how much will be borrowed to finance any shortfall or overrun in the projected revenue and expenditure respectively.

    The president presented a total proposed federal government budget of N8.827 trillion tagged the Budget of Continuity. Of this amount, N492 billion representing 5.58% of the overall vote is budgeted for Statutory Transfers, N2.264 trillion representing 25.65% of the overall vote is budgeted for debt service, N4.038 trillion representing 45.75% of the overall vote is budgeted for recurrent expenditure (non-debt) and N2.032 trillion representing 23.02% of the overall vote is budgeted for capital expenditure. The overall revenue projection for the year is N6.967 trillion which results to N1.86 trillion deficit to be financed by borrowing from domestic and foreign sources. The 2019 Budget of Continuity is 3.22% less than 2018 budget which stood at N9.120 trillion. Despite the reduction in the total 2019 proposed budget, the recurrent budget is higher than the 2018 recurrent budget by 15% while the capital budget is less than the 2018 capital budget by 29.29%. The 2019 proposed budget has an increased debt service by 2.73% compared to 2018 budget.

    From the above analysis, Nigeria will have to borrow more in order to finance the 2019 budget deficit of N1.86 trillion which will automatically increase the overall public debt stock. On December 28, 2018, the Debt Management Office through a press release revealed that the Total Public Debt Stock comprising the external and domestic debts of the Federal Government of Nigeria (FGN), the 36 States and the Federal Capital Territory (FCT) stood at US$73.213 billion or N22.429 trillion. The 2019 budget deficit which the government planned to finance by borrowing the total sum of N1.649 trillion will further add to the total debt stock of the country and increase provisions for debt service repayment and servicing in subsequent fiscal years. It is true that the budget deficit which is 1.33% of the GDP is within the threshold stipulated in the Fiscal Responsibility Act (FRA) 2007, but it is very important to state that debts are not paid back with GDP but with available revenue. The projected debt service is 26% of the overall 2019 vote and 32% of the projected oil and non-oil revenue. It is pertinent to state that Nigeria hardly meets up with her revenue projection for each year as previous year records have always shown a big shortfall in the realization of projected revenue. Now when there is a shortfall in revenue, salaries and overheads will be paid, debt will be serviced and paid while capital project implementation will always suffer as the case has been.

    What a heavy burden we bear as Nigerians resulting from the constant borrowing for each year both from the state and federal government without corresponding benefit to attest to the huge debt. When you add up the top 12 MDAs capital expenditure allocations in the 2019 Budget which are Ministry of Power, Works and Housing, Defense, Agriculture, Water Resources, Interior, Education, Transport, Industry, Trade and Investment, Niger Delta Affairs, Health and OSGF, it will amount to N1.23 trillion which is below N2.264 trillion being the amount budgeted for debt servicing. When you further expand the analysis, the overall capital budget provision of all MDAs in the 2019 budget is 23% of the overall 2019 budget while the debt service is 26% of the overall 2019 budget. That means we are spending more to service debts while we spend less on capital project that has direct impact on Nigerians.

    Borrowing is not actually a bad economic practice especially when it is exclusively for investment but it becomes a wrong practice when a country borrows for consumption. The increase in 2019 recurrent budget is mainly for the payment of personnel salaries and without resultant contribution to the economy of the county. The present ongoing strike of both polytechnics and universities in the country is a serious issue and when a country pays less attention to her educational sector, then the country is bound to witness backward movement in the development of the right human resources that will advance the economy.

    Where is the bulk of the debt being incurred by the federal and state governments going into when Nigerians cannot enjoy good roads, affordable and quality healthcare, affordable and quality education, good accommodation, constant power supply and improved standard of living? Isn’t it clear that our leaders are busy borrowing for consumption? Come to think of it, who will pay back this huge debt burden? Is it the future generation that our present leaders do not care for? Is it those students sitting back at home? Is it those graduates without job? Is it the imbalanced tax system?

    When you even think of the plan put in place to finance the 2019 budget, you will be shocked to know that the government may not have planned for the specific sources from which the projected borrowing to finance the deficit will come from. Normal practice demands that just as the executive presents the 2019 budget, they will as well present the debt plan so that immediately the budget is passed, the debt plan will also be approved to kick start implementation of the 2019 budget from all sources. This is usually not done and it slows down the implementation of capital projects especially when there is substantial shortfall in the projected revenue.

    Come to think of it, must we always have a budget deficit? Can’t we plan based on the available resources and ensure that all leakages in revenue are blocked? Can’t the Federal Inland Revenue Service ensure that all Nigerians get into the tax net? Can’t the Fiscal Responsibility Commission ensure that all MDAs that are supposed to remit operating surplus do so in 2019? If we must borrow to finance budget deficit, then let all stakeholders involved do the needful and ensure that Nigerians benefit from this heavy burden of debt.

     

    • Abel, ACA, a Public Sector Analyst writes via abel.ovictor@gmail.com

  • Presidency to Atiku on Budget 2019: your criticism low on real solutions

    THE Presidency has declared that former Vice President and People’s Democratic Party (PDP) presidential candidate Atiku Abubakar’s criticism of 2019 Budget proposal was high on rhetoric and low on real solutions.

    Abubakar had last weekend issued a statement in which he described President Muhammadu Buhari’s 2019 budget proposal as fundamentally flawed and failing to address current realities.

    But, a statement by the Special Adviser on Media and Publicity, Femi Adesina, said the “current realities” identified by Atiku were issues already highlighted in President Buhari’s budget speech and further amplified in the detailed presentation by Minister of Budget and National Planning Senator Udoma Udo Udoma.

    According to Adesina, Abubakar regrettably didn’t offer substantive and workable solution to the identified “realities”.

    He said: “Atiku describes the underlying assumptions of the budget as generous, wild and untenable, but does not propose alternative assumptions that would have been more appropriate.

    “He argues that the economy is yet to recover from the 2016/2017 recession. Unfortunately, he cannot create his own definition of an economic recession, which is a technical term with a universally applicable meaning. When an economy experiences two consecutive quarters of negative GDP growth, it is said to be in recession and whenever it returns to positive GDP growth of whatever rate, it is said to have exited recession. It is doubtful if he understands the simple meaning of recession.

    “Atiku attributes the sustained accretion to foreign reserves to “increases in international prices of Brent Crude and foreign borrowing.

    “But he conveniently forgets that under the immediate past federal administration, oil prices were at an all-time high with substantial growth in foreign borrowings, and yet foreign reserves nose-dived from a peak of $62 billion to as low as $24 billion.

    “His repeated reference to the price of Brent Crude throughout his statement may be indicative of his lack of knowledge that Nigeria’s Bonny Light Crude trades at a premium of at least $2 per barrel over the price of Brent; just as his reference to Nigeria’s OPEC quota may also suggest that he does not know that Condensates do not count in measuring compliance with the quota.”

    Adesina added: “The PDP presidential candidate faults the provision of N305 billion for NNPC’s cost under-recovery on Premium Motor Spirit (PMS) but does not say exactly what he would do about PMS pricing.

    “If, however, we are to go by an earlier statement from his campaign organisation, which promised to reduce the price of petrol to N87, then we can expect a much higher subsidy provision from an Atiku government; because he is not going to perform magic to get the refineries working at peak capacity immediately.

    “He describes the 2019 budget as being very small, but does not offer any implementable options for improving domestic resource mobilisation, which is the only sustainable means to achieving larger budgets. It does seem that he does not understand or is just feigning ignorance about the critical role of revenue in budget preparation.

    “A careful look at Atiku’s statement would show that there is nothing original about his identified “realities”. These are areas President Buhari had already identified in his speech. For instance, the President recognised that the revenue performance of the Federal Government up till September 2018 has been less than spectacular.

    “Leaving aside for a moment the fact that there has been a remarkable increase in Federal Account receipts in the last three months, a look at the budget speech will show that the President specified a number of actions to tackle revenue weakness, including strengthening on-going efforts at tax collection, liquidation of recovered assets, immediate recovery of past due oil royalties charges and deployment of the National Trade Window to improve Customs collections.

    “His most laughable criticism perhaps was his claim that ‘there is little evidence to show that increased investment in agriculture has yielded positive results’. Even the worst adversary of the Buhari administration would acknowledge that significant progress has been made in the agriculture sector.”

    He said in Atiku’s often desperate attempt to rubbish the 2019 budget, he conflated foreign direct investment with capital inflows.

    He said it was obvious that Atiku’s statement on the budget was a poor attempt at playing to the gallery.

     

  • Budget presentation: NANS wants NASS to apologise to Nigerians

    The National Association of Nigerian Students ( NANS ) has called on members of the National Assembly to apologise to Nigerians for their unruly behaviour during President Muhammadu Buhari’s 2019 budget presentation .

    The Public Relations Officer of NANS, Mr Azeez Adeyemi, made the call on Friday in Abeokuta.

    Adeyemi condemned the lawmakers’ behaviour, saying that it had further tarnished the external image of the country.

    He urged the lawmakers to always promote the integrity of the country, while according due respect to its leaders.

    He stressed that the legislators should jettison personal and political interests while treating matters of national interest.

    Read Also: Budget presentation: We showed our strength, says APC Reps

    “Nigerian students believe that members of the National Assembly should be role models to Nigerian youths and students by displaying worthy and enviable character.

    “It is important to place respect for the honour and integrity of our dear country above any personal or political interests.

    “We, hereby, call on the leadership of the National Assembly to, as a matter of necessity, apologise to the entire people of Nigeria over the members’ unruly conduct during the president’s budget presentation,” he said.

    The NANS spokesperson, nonetheless, urged the National Assembly members to scrutinise the 2019 appropriation bill before its passage so as to ensure the outcome was in the best interest of all Nigerians.