FG’s N14trn budget for three years

By Dele Sobowale

“We have projected crude oil production for 2014 to be 2.3883mbpd [million barrels per day]. This figure is lower than 2.526mbpd budgeted in 2013…it is hoped that government’s efforts at tackling the (oil theft) problem will yield further results in the medium term, hence production is estimated at 2.5007mbpd and 2.5497mbpd for 2015 and 2016”. Federal Government to the National Assembly. September 17, 2013.

The document, 2014-2016 Medium Term Expenditure Framework, proposed N4.495 trillion as the budget for 2014 – N425 billion less than the current year. For that sense of reality demonstrated, the Federal government deserves some credit.

It would have amounted to economic self-delusion of the worst kind if the Federal government had failed to take into account the failure of this year’s budget, largely on account of the shortfall in crude shipments while preparing next year’s budget proposals. By July, revenue shortfall for 2013 had already reached N686bn and are projected to get close to N1 trillion by year end. So instead of N4.925bn proposed for 2013, the nation will be extremely fortunate if N4tn is received. Thus, while the 2014 proposed budget is lower than the 2013 appropriation, it is N495bn more than what can be reasonably expected this year.

Incidentally, Nigeria, like other predominantly oil exporting nations had benefited immensely from political turmoil in the Middle East. Since the 1973 Yum Kippur War between Israel and the Arab countries, decisively won by Israel, which led to an activist Organisation of Petroleum Exporting Countries, OPEC, Nigeria had been a perpetual beneficiary of trouble in the Gulf. Indeed, it might not be wrong to state that two straight years of peace in the Arab countries could spell doom for Nigeria.

Our dependence on trouble in the region for our survival is almost total. So, to some extent, the projections for 2014 are partly based on the assumption that tension will persist in the Nile Basin. Without that assurance, the National Assembly might as well throw the Medium Term Expenditure Framework into the waste basket. In no single year, since 2011, had the projections proved accurate and no budget had been faithfully implemented. The MTEF lacks credulity for a number of reasons. Let me mention a few.

History is against it. No budget presented by any government since 1999 had ever been implemented as approved by the NASS. From Obasanjo’s first one, the 2000 budget, to Jonathan’s 2013, now headed for the graveyard, no single budget was ever executed as proposed. Each budget had failed for various reasons but the most common has been lack of will by the leaders to implement them.

Next to the lack of will, and perhaps allied to it, is the unprecedented amount of time all three Nigerian presidents – Obasanjo, Yar’Adua and Jonathan – had been spending attending to internal political conflicts within the ruling party – the Peoples Democratic Party, PDP. It is quite possible that no other Head of State, in the world, spends as much time as the Nigerian president attending to purely political party problems. The leading papers in every country tell the story regarding what engages the leaders’ time. In Nigeria, virtually everyday, the lead stories are always about PDP and the President. Seldom is the economy in the lead and usually for negative reasons. There is a clear absence of a president leading the charge towards achieving stated economic goals for the year, for mid-term and for the long run.

The appointment of Dr Ngozi Okonjo-Iweala, the Minister for Finance, as Coordinating Minister for the Economic Team, CMET, as well as the selection of a handful of business moguls and governors, to manage the economy, while freeing the president from overseeing routine economic decisions has been allowed to elide into presidential abdication of responsibility. The buck still stops at the president’s table. Dr Ngozi was not elected by the people of Nigeria. Alhaji Dangote will not be held responsible if things go disastrously wrong. Every one of these people can walk away if and when they choose and nobody can ask them any questions. The President can delegate his duties to anybody he chooses but he is still responsible for the results. Right now Jonathan is behaving as if he is not responsible.

At any rate, the 2014 budget proposal is heading for the stormiest sessions the NASS had ever experienced. To begin with, many lawmakers, for political and selfish reasons, are spoiling for a fight. Like sharks, they can smell blood in the water – the President’s blood, that is. They know that the 2013 budget had not, and could not possibly, be implemented. Generated revenue had been running below budget from January; they also are aware that only a miracle can produce any positive turn-around before the year ends. States are owed backlog of revenue allocation, ASUU remains on strike and government claims it cannot afford to pay, doctors have joined the strike and soon public servants throughout Nigeria will feel the lash. The President is the perfect scapegoat for political demagogues bent on bringing him down at all costs.

With the 2013 budget set to ignite passions and “bring out the beasts” in our elected officials at Federal and State levels, the credibility of the 2014 budget is already in doubt. Fourteen straight years of “Voodoo economics” which had formed the basis of Federal budgets had eroded any confidence in the current proposals. Only a gambler will bet his money that the 2014 budget will be better executed than the previous thirteen and for one reason; at least.