Despite the poor implementation of the 2012 budget, Nigerians are hoping that early approval, full implementation and judicious utilisation of 2013 budget will, indeed, improve their standard of living
With the 2013 Appropriation Bill still in the mill at the National Assembly, NASS, Nigerians are optimistic that the lamentations of the past will be replaced with a new era of massive transformation. According to the 2011 United Nations, UN, Human Development Index, which ranks Nigeria 156 out of 187 countries, the country is classified among the poorest in the world despite its wealth both in human and natural resources. Nigerians, therefore, want the 2013 budget to change the situation in terms of infrastructure and social development in order to improve their standard of living.
The current capital budget, which is the part that improves the lives of the ordinary people, has been adjudged to be extremely poor in terms of implementation. Further, the illegalities and frivolities that Nigerians complained of in previous years are still showing up in the new appropriation bill. This is why Eze Onyekpere, lawyer and lead director, Centre for Social Justice, while taking a closer look at details of the critical elements of the 2013 Appropriation Bill, pointed out that there are no plans for improved implementation of capital projects in the coming year. “From the look of things, the budget proposal captures the fundamental challenge of impunity in fiscal governance at the federal level,” Onyekpere added. Indeed, many Nigerians wonder why the NASS would bother itself with frivolities rather than their wellbeing.
Economic experts have picked holes in the new appropriation bill, saying its features are not reflective of any progressive action on the part of the executive arm of government. They argue that Nigerians have been completely disconnected over the years from purported gains of the nation’s annual budget. These analysts also accuse the media of creating false expectations that the budget has the ability to transform the country and improve the social being of the people. “Budget presentations or the budget instrument itself as a measure of what to expect or as a measure of potential development has not been a good marker in the past,” Henry Boyo, an economist, financial consultant and monetary analyst, said.
With over 90 per cent of the nation's foreign exchange earnings coming from the oil and gas sector of the economy, the country depends on other economic engines and alternatives to sustain growth, as current demand for exports is far from encouraging. Experts believe that the budget should focus on private investments, particularly physical infrastructure under the Transformation Agenda.
Amid growing concerns for the increasing level of local and foreign debts and the high cost of debt servicing reflected in the 2013 budget, Nigerians who are looking for job opportunities are expected to find job openings next year if the promise being made by government is anything to go by. With the commitments made to the transformation of the value chain of various sectors to create an estimated 3.5 million jobs in the coming year, members of the organised private sector, through the Lagos Chamber of Commerce and Industry, LCCI, are optimistic that the provision of N100 billion sinking fund for the repayment of maturing debt obligations will stimulate the manufacturing sector which will ultimately create more jobs. According to Goodie Ibru, president, LCCI, as much as the country’s debt profile remains a major source of concern, the fiscal policy measures in the budget will be far-reaching. “We are concerned about the growing level of domestic debt and the high cost of debt servicing. Domestic borrowing is proposed to reduce from N747 billion in 2012 to N727 billion in 2013, a mere 2.3 per cent reduction, and a staggering N591.76 billion is earmarked for debt servicing. We commend these measures as they could boost domestic production, conserve foreign exchange and create jobs,” he said.
Although analysts have said that about $105 billion is required to revamp the power sector over a period of 10 years, in order to achieve the level of generation that will provide adequate and steady power supply in the country, a capital allocation of N1.57 trillion earmarked in the 2013 budget translates to about $8 billion. By implication, if all the other sectors of the economy are ignored, it would take about nine or 10 years of consistent investment to put the power sector in shape. Nevertheless, the sector has witnessed a slight improvement in the last one year despite funding challenges. But Nigerians are hoping for more given the fact that it would impact on the cost of doing business in the country and to a large extent a reduction in prices of goods and services.
Also reacting to the budget proposal, analysts say that one of the ways Nigerians will reconnect to the annual ritual of allocating resources to value chain sectors is for the federal government to translate figures into programmes and projects that would build capacity and impact positively on the citizenry in the areas of good road network. “The success or otherwise of any budget lies in the ability of drivers of the economy in the public sector to ensure that there is drastic improvement in the road sector,” Adegoke Alani, managing director/chief executive officer, MD/CEO, Wesbanch Engineering Limited, said. According to him, Nigerians want the marginal reduction in recurrent expenditure in the 2012 budget to reflect in the lives of the people. “The citizens are really optimistic that government will be able to save enough to spend on building roads and developing other critical sectors,” Alani added. As the state of the nation’s road infrastructure continues to deteriorate and some parts of the country are increasingly being cut off from the rest, Nigerians expect the allocation to works in the budget, despite the fact that it is low, to provide some form of improvement on the appalling state of road network. This move, the magazine observed, will promote value chain in agriculture and cottage industries whilst opening up rural roads to promote the development of the agrarian communities.
The allocation of N279.23 billion to the health sector, notwithstanding, quite a number of Nigerians are still optimistic that the infrastructure inadequacy in this critical sector will be addressed. For Tunji Afuye, a medical support staff with GA2 Hospitals, the feeling is that the series of terrorist attacks and the attendant rising death toll exposed Nigeria as a country that abandoned the development of its health sector in the last 10 years and the paltry 5.68 per cent of the budget allocated to the health sector is a far cry from what is required to address the problems of the sector. Nonetheless, Afuye is optimistic that the sector will witness an improvement if the allocation is spent on well-meaning health projects although he wonders why the sector, which requires at least 15 per cent of the entire budget according to international benchmark, was given such a low allocation. “In order to improve the indices of development, the budget must directly improve the lives of Nigerians in the area of health care delivery.
As much as provision of quality water is one of the economic indices of measuring development in the health sector, Nigeria is ranked third on the world list of countries with inadequate water supply and sanitation coverage globally. Godswill Iboma, a medical doctor, says although the country has the highest maternal mortality rate in Africa and the second highest infant mortality rate in the world, the “expectations of Nigerians from the 2013 Appropriation Bill in the area of water resources management owing to the direct relationship between health and water is high.” With food security topmost on the mind of many Nigerians, the government’s intention to focus on agriculture value chains is attracting the much-needed attention. Despite complaints that the 1.65 per cent of total budget allocated to the agriculture and rural development sectors is ridiculous, the plan of government to attract investment commitments to the agricultural sector was received with cheers.
Stakeholders are convinced that the myriad of problems besetting the education sector will remain with Nigerians in 2013 because only N426.53 billion, 8.7 per cent of the budget, was voted for the sector, as against the international benchmark of 26 per cent of the total budget for developing economies. That figure is even N10 billion short of what was earmarked for the sector in 2012, even though not fully implemented. Worse still, only N60 billion, a mere 14 per cent of the N426.53 billion voted for the sector is earmarked for capital projects, a situation which has come under heavy criticism by Nigerians who want to have an unfettered access to free and quality education. According to Ayoola Fagunjade, a management consultant based in Lagos, the 2013 Appropriation Bill should afford the government the opportunity of correcting the infrastructural decay, lack of inspection and total neglect which is currently the bane of the sector. “It is shocking to see that the budget seeks to entrench the nation’s direct involvement in the downstream oil and gas sub-sector through a planned Eurobond for gas pipelines that ought to be left to the private sector, instead of channelling these funds to the comatose education and other critical infrastructure sectors,” Fagunjade added.
Nigerians, who have lived with gory tales of terror attacks, and in fear for the better part of this year, hope for a reprieve in 2013. Going by proposals in the 2013 budget, their security might be guaranteed as defence got over 13.5 per cent of the total budget, the largest of all the sectors. “Since the federal government is aware of the fragile security within the political landscape, it appropriated huge sums for defence and police to curb the increasing wave of terrorism in the country,” Emeka Eluwa, MD/CEO, NuVerge, said. He expressed optimism that N348.91 billion and N319.65 billion, allocated respectively for defence and policing will be judiciously expended to address the nation’s security challenge which is currently scaring foreign institutional and private investors away from the country.
Just as all machinery and spare parts imported for local sugar manufacturing industries will now attract zero per cent duty, the aviation industry will also benefit from similar provisions on imported aircraft and spare parts. Although these waivers, which are seen as a presidential fiat by some stakeholders, may reduce the revenue that comes to the country and trigger deficit, aviation industry pundits fear that it may be hijacked by economic saboteurs for personal gains.
Experts insist that the budget will only impact the lives of Nigerians positively only when it is approved early and fully implemented form January next year. But there are indications so far that the legislators and the executive might be working at cross purpose, a situation that does not align with the expectations of Nigerians. For instance, shortly after President Goodluck Jonathan presented the budget to NASS, he was openly criticised by David Mark, Senate president and Aminu Tambuwal, speaker of the House of Representatives, both members the same party, the ruling Peoples Democratic Party, PDP.
Mark faulted the executive for failure to implement the Senate resolution to sack the director-general, DG, of Bureau of Public Enterprises, while Tambuwal criticised the President for disregarding its resolutions concerning Arunma Oteh, DG, Securities and Exchange Commission. Tambuwal made it known that the lawmakers intended to push up the 2013 budget’s oil price benchmark assumption to $80 barrel and to the amazement of the Nigerians and the international community.
Nigerians who placed so much expectations on the budget were amazed that the NASS derived pleasure in tackling the President on a day set aside for a sensitive business like budget presentation instead of getting bothered by measures highlighted in next year's budget and how they will ultimately benefit the people and impact the economy. For ordinary Nigerians, technocrats and other stakeholders in the organised private sector, the NASS is seen as a ‘placard carrying’ industrial union that savours every opportunity to embark on protest even for frivolous reasons.
That is why they supported the views of Doyin Okupe, senior special assistant to the President on public affairs, that the NASS should exercise restraints and show some form of decorum while dealing with the executive arm of government just as in the United States, US, where the Congress will not openly criticise the President after delivering the State of the Union address. It has never been recorded in the history of the US that the speaker of the US House of Representatives and president of the Senate would openly criticise the US President at the venue of the presentation of an address that not only reports on the condition of the nation but also allows the President to outline his agenda, for which he needs the co-operation of Congress. But for the sake of upholding democratic decorum for the common good of the nation, the opposition will appoint a senior member of the party to refute some of the critical areas of the address, on national television, which they consider as germane to the well being of the American people. This is a far cry from what happened in the 2013 budget presentation.
However, some lawmakers are demanding diligent implementation of the budget to alleviate the sufferings of Nigerians and achieve set developmental targets. According to Ahmed Lawan, a senator representing Yobe North, the budget appears to portray hope for the economy provided it is implemented. Reiterating the problem the legislature had with the executive, which bordered on the implementation of the 2012 budget, Lawan hopes that the lives of ordinary Nigerians would be touched through the instrumentality of the budget. “I believe that the government should be for the welfare of the ordinary people,” Lawan said adding that, “support will be given to the executive arm of government in ensuring that the programmes outlined in the budget are fully implemented for the benefits of the disadvantaged people whom I represent.”
Even in the face of optimism expressed by some Nigerians, experts wonder whether or not the 2013 budget would redress the 133rd ranking of Nigeria out of 183 countries in the 2012 World Bank’s Ease of Doing Business’ report, which suggests that Nigeria lags behind 132 economies in terms of regulatory ease for the start and conduct of business. To this end, Nigerians expect the Jonathan administration to use its Transformation Agenda to build critical infrastructure, create jobs, deliver efficient power supply regime, ensure efficient and affordable public transport system, improve health care delivery, give greater access to qualitative education and pay special attention to agriculture to ensure food security.