Nigeria’s 2017 Budget – Is the Country Poor?

Chambers Umezulike July 3, 2017 0

After extensive parish-pump, pedestrian and partisan theatrics on the 2017 Appropriation Bill passage and minimal cause célèbre regarding its presidential assent, the 2017 Appropriation Act was finally signed into law on the 12th of June 2017 by the Acting President, Prof Yemi Osinbajo. Consequently, on 19 June 2017, as a convention, the Ministry of Budget and National Planning (MBNP) organized a public presentation of the Act. In attendance were numerous relevant governmental/non-governmental stakeholders. While I was partly impressed by Sen Udo Udoma’s (Minister of Budget and National Planning) presentation, in which he elementrified several components of the budget, let me start by registering few concerns and remarks:

First, the Budget Process – It is quite despondent that there was no sense of urgency on the part of the National Assembly to expedite the Appropriation Bill’s passage. The theatrics of the delay in the passage was driven my personal and partisan interests with utmost disregard over consequent budget implementation retardation denouement and the concerns of Nigerians. This was exactly an echolalia of what happened with the 2016 budget which affected its implementation. Nothing was learnt from the 2016 retardation. Note that, a financial year starts from 1 January of every year and ends on December 31. However, this budget cycle crisis has persisted over time and will affect the 2017 budget implementation, as well as the economic growth rate assumption of 2.2% by the government as discernible in its Economic Recovery and Growth Plan (EGRP).

Secondly, Nigeria is really a poor country – While Nigerians dance around the epileptic euphoria of being an oil-rich country, it’s imperative to note that the international energy dynamics have changed with oil losing its worth on a daily basis. While the country’s 2017 budget is at NGN7.44t ($25b), the highest ever, for a country of over 180 million population, this shows Nigeria is poor. The budget per capita is NGN40,000, roughly $100. That is what the government intends to spend on each Nigerian in the year. This is with the endemic poverty, low illiteracy and life expectancy rates, gross infrastructural deficit and low manufacturing capacity. Comparatively, Indonesia’s 2017 budget is at $158b for a population of 257 million putting the budget per capita at $614. Notably, as one of Nigeria’s former economic comparators, it has outperformed Nigeria on an avalanche of macro-economic metrics with far better infrastructure. Furthermore, the budget of the State of California in the United State alone for 2017 is at $179b.

The shocking part is that Nigeria’s $25b budget has a deficit of NGN2.35t (est. of $8b). This really means Nigeria is poor, for her not to be able to fund such nanoscopic deficit. In the 2016 fiscal year, Apple Inc. made revenue of $215b. Nigeria’s expected revenues from oil this year is roughly at $8b. This shows innovation and technology are the future of today’s world. But Nigeria cannot be considered ready for this, as she also appropriated a petty NGN41.7b for capital expenditure in Science and Technology in the budget.

Thirdly, Capital Expenditure – While the government prides itself for raising capital expenditure from 15% in 2015 (which is quite unbelievable) to 31% in 2017 [which is commendable], the country has to do more in this regard. The government cannot basically be using the budget for recurrent costs.

Major MDA Capital Allocations – Source, Budget Office of the Federation

Going back to the Minister’s presentation and further contents of the budget, he commented, “The budget was designed to expand partnership between public and private sectors, including development capital to leverage and springboard resources for growth and restore the economy, all in line with the ERGP’  In sum, the budget intends to focus on:

  1.      Infrastructural expansion – NGN553.7b for Works, Power and Housing and NGN241.7b for Transport. This is to spur growth, improve ease of doing business, facilitate diversification efforts, fund agricultural value chain and provide an enabling environment for businesses.
  2.      NGN 46b for the establishment of Special Economic Zones (SEZ) in each of the geo-political zones to drive manufacturing and exports – While this is welcoming. It seems it’s at this time Nigeria is really thinking of development. It can also be said that low oil prices is forcing the country to manufacture ideas. Its run-of-the-mill economic sense that if you cannot provide sufficient infrastructure and environment for businesses that you establish SEZs for such to attract foreign and domestic investors. East Asian countries such as Singapore, Indonesia and China all established such zones in the 70s and 80s. Nigeria is late to this party.
  3.      Encouraging the growth of small and medium industries through the recapitalization of the Banks of Industry and Agriculture with NGN15b to increase access to financing.
  4.      And providing a social safety net for poor Nigerians.

Key Assumptions and Macro-Framework of 2017 Budget – Source, Budget Office of the Federation

In furtherance, the NGN7.44t budget has key assumptions such as: oil production at 2.2mbpd, benchmark oil price at US$44.5/b, the exchange rate at N305/US$ and the aforementioned economic growth rate of 2.2%. The budget also envisages total revenue of NGN5.08t, exceeding that of 2016 by 30.2%, with capital expenditure at NGN2.36t.

Moving forward, first, the problem has always been implementation crisis as well as the lack of transparency, accountability and citizen engagement in governmental spending. There is a great need for increased transparency and accountability in the budget’s implementation with updates on capital releases for effective public oversight. This is following the Minister of Finance comment at the event that the government already has the first tranche capital release of NGN350b. Secondly, while there are already promises in this respect, both from the Executive and Legislature, something should be done quickly about the budget cycle crisis. Topical commitments to see that the 2018 budget is passed by December this year should be followed with sufficient political will and commitment to have that realized. Ultimately is swift implementation of the budget considering we are already at the half of the year.

I wish the government goodluck with the budget implementation.

 

Chambers Umezulike is a Senior Programme Manager at Connected Development and a Development Expert. He spends most of his time writing and choreographing researches on good and economic governance. He tweets via @Prof_Umezulike.

Climate Change Mitigation, Adaptation and Trigger-Factors on the 2017 Budget Proposal

Chambers Umezulike February 3, 2017 0

(‘Talking Sanitation’ –  an unclear and questionable budget item under an agency of the Environment Ministry)

On the 30th and 31st January 2017, the Centre for Social Justice (CSJ) in partnership with the German Embassy organized a Workshop on Climate Change and the 2017 Budget Proposal. In participation were over 30 participants drawn from relevant government’s Ministries, Departments and Agencies (MDAs); Civil Society Organizations; the academia; and the private sector. Connected Development was invited in recognition of our works in Sustainable Development and I represented the organization.

The workshop was a product of a CSJ’s project on devising templates for a low carbon budget framework in ten key sectors of the Nigerian economy. The sectors involved are agriculture, energy, environment, finance and national planning, housing, labour and productivity, mines and steel, transport, water resources and works. The project is also geared to mainstream mitigation and adaptation measures on climate change into the budgeting process.

The workshop was for an intensive analysis of the 2017 federal budget in the aforementioned ten sectors on climate change mitigation and adaptation budget lines, as well as budget lines that would lead to the emission of more greenhouse gases into the atmosphere. A key component of the workshop was a policy brief which would be used in engaging various federal legislative committees in the approval of the 2017 federal budget.

The first day of the conference started with paper presentations on the budget of several ministries, representing the aforementioned sectors. Post these interesting presentations was then the segmentation of the participants into several groups to further analyse segments of the budget and make policy recommendations on how the budget could further and effectively influence  climate change mitigation and adaptation. These recommendations would be forwarded to the National Assembly.

Key observations from the workshop include that most of the budget lines on the 2017 budget were deeply ambiguous, questionable and lack-specificity. This has occasioned a scenario where the public cannot be able to analyse these items thoroughly or even understand what they mean (see the image above). It is expected that moving forward, several ministries should make these budget items specific with some details even if a budget item could take three lines.

I was really impressed by this workshop, with the great team of CSJ that did beautiful work in organizing the event, embarking on such great research and having the papers ready for review during the workshop. I also met interesting participants and elemental stakeholders from several MDAs whose group contributions were so helpful, and offside discussions during tea and lunch breaks, I learnt so much from. I so much hope that through the post workshop strategies that were identified at the end of the conference, CSJ would be able to initiate extensive debates on the National Assembly during deliberations on the 2017 budget proposal.

Chambers Umezulike is a Program Officer at Connected Development and a Development Expert. He spends most of his time writing and choreographing researches on good and economic governance. He tweets via @Prof_Umezulike.

This present National Assembly is not entirely useless

Chambers Umezulike January 27, 2017 0

Thoughts on the Interrogation of the NGN 9.2 billion Women Clean Cook Stove Project Saga by the Federal House of Representatives

 

I have been involved in several dialectics on the practical importance of the National Assembly (NASS) since 1999. Most of such dialectics have ended with the conclusion that the institution has been a gross waste while levying the country so much. The foundation of this conclusion is rooted on several actualities. First, since 1999, the NASS has been used as a compensatory platform to settle former politicians and a mechanism for accentuating a post-1999 outbreak of political patronage in Nigeria. In short, the institution has directly supervised the proliferation and culturalization of contemporary corruption in the country. Secondly, the leadership crisis the Senate experienced from 1990 to 2003 started occasioning some elements of incertitude on the minds of Nigerians on what could be the real essence of such institution. Thirdly, one cannot remember any bills from the National Assembly that has had any impacts on the lives of ordinary Nigerians.

Fourthly, since 2007, despite a peroration of leadership crisis in the Senate, the NASS then became a traditional resort and relaxation point for failed and grossly corrupt governors, who siphoned all their states had, and were seeking ways to get covered with some sort of immunity from prosecution. To some of the lawmakers, it was a tool of still being relevant and in the political game. Fifthly, what irritates most Nigerians also encompass the fact that over 5 per cent of our national budget goes to the National Assembly. Conversely, such expenditure has been immersed in extensive secrecy with even pedestrian knowledge-deficit on what they do with such percentage. Sixthly, the NASS has gross-transparency and accountability deficit. The Nigerian lawmakers are the most paid all over the world, with humongous amounts of constituency allowances for implementing projects in their constituencies which they do not account for.

I am personally an exponent of this narrative that NASS has been a colossal waste up to this point, since 1999. I am part of those advocating that law-makers remuneration should be grossly cut to de-incentivize the transposition of clueless politicians to either of the chambers. While law-making should be a part-time activity. I am also part of those advocating for the eradication of constituency allowances since there are no monitoring and evaluation regime to ensure project implementation. I am also part of those advocating for the concatenation of the two chambers. Ultimately, I am part of those strongly advocating for #OpenNASS.

However, despite the inadequacies of the NASS including the present one, and the fact that it is still business as usual, one would be sincere of the fact that this present NASS ain’t that entirely useless. If you could remember, they were the ones that stopped the government from borrowing $30 billion while there were no plans on what to use it for. They were the ones that suspended the sale of national assets. They were the ones that suspended the increment on phone data tariffs. They have indeed made some critical interventions whether they did this in the interest of Nigerians or for political intricacies.

Consequently, just few days ago, the Federal House of Representatives (HOR) commissioned its committees on Anti-Corruption, Environment and Habitat to carry off an investigation over the last administration’s “Clean Stove For Rural Women Project,” which was under the Ministry of Environment. The project was at NGN 9.287 billion and initiated in 2014 to supply 750,000 units of clean stoves and 18,000 wonderbags to rural women. If you could remember so well, the project was chaperoned by a saga, resultantly from ambiguity in its contracting processes, cause celebre on the number of stoves that were procured and dynamics of the 2015 political transition.

This is a project that Connected Development’s Follow The Money (a grass-root anti-corruption movement) has been tracking its spending since 2014. The organization subsequently found out that only 45,000 clean cookstoves were provided and exhibited at the Velodrome of the National Stadium in Abuja. In addition, it also revealed that out of the 9.2 billion Naira, Federal Ministry of Finance only released N5 billion to the Federal Ministry of Environment for the execution of the project, and the Ministry of Environment only released 1.3 billion Naira to the contractor of the project – Integra Renewable Energy Services Limited. Till today, no one has seen any single beneficiary of the cookstoves.

It’s beautiful that the present NASS has also intervened in another great area through this investigation. I hope the investigation would not be compromised but would rather springboard appurtenant sanctions for those that compromised the rule of law in the process of the project.  I also wish to call on the Committees involved to implement this investigation in an open manner so that all relevant stakeholders (civil society and the media) can witness it to share findings, narratives and ensure transparency in such effort.

 

Chambers Umezulike is a Program Officer at Connected Development and a Development Expert. He spends most of his time writing and choreographing researches on good and economic governance. He tweets via @Prof_Umezulike.

Engaging Legislators on #MakeNaijaStronger Campaign

Ijeoma December 5, 2016 0

Connected Development [CODE] in partnership with ONE Campaign and The League of Progressive Ambassadors of Nigeria (LEPAN) organized a one week outreach to engage legislators on the #MakeNaijaStronger campaign which is a national health campaign to draw attention to the urgent need for increased public investments to improve health and nutrition outcomes in Nigeria. The Campaign amplifies the calls of various Nigerian organizations that have called on government to priorities increased health investments to help strengthen health systems and save lives.

The aim of the outreach was to get the legislators to sign the petition which calls on the government needs to ensure full implementation of the National Health Act, including more resources and better spending to ensure all Nigerians, including the poorest are able to access health care.

The National Health Act was signed into law by the president on December 9, 2014 with the aim to establish a framework for the regulation, development and management of a National Health System, to set standards for rendering health services in the Federation and other matters concerned, it also provides that there would be improved funding of health care services at the grass root so that people don’t have to travel far to access medical services.  This Act will also ensure that states participate in improving health centers through a counterpart fund that would enable them benefit from the consolidated funds.

nass-1

Getting the legislators to sign the petition was not an easy ride as most of them could not be found at their offices. Those that were around were apprehensive and bluntly refused to append their signature, while some will verbally support the cause and refuse to sign the petition. We also understood that it was a very difficult time for them as previously they just experienced a total blockade of the complex by an aggrieved group and therefore there was little acceptance given to advocacy groups at the moment. Notwithstanding a total of 84 petitions were signed by the legislators.

This shows that 34 distinguished senators and 50 Honourable members are also joining CODE, ONE Campaign, LEPAN and the Nigerian citizens to call on the Government to fully fund the National Health Acts and its provisions, Increase transparency in health programming and spending and also scale up investments in the 2017 budget for areas that can have the greatest health impact for Nigerian citizens in other to #MakeNaijaStronger