Analysts Say 2023 Budget Not Realisable
Piecing Nigeria’s proposed 2023 appropriation bill and making meaning of the N20.51 trillion expenditure lacks coherent logic or economic theory to many analysts.
President Muhammadu Buhari had last Friday, October 7 presented the appropriation bill, tagged ‘Budget of Fiscal Consolidation and Transition’ to the National Assembly – his very last budget presentation as Nigeria’s president.
Besides other key highlights in the bill, there is a total deficit of N10.78 trillion even as the government hopes to finance its expenditure with N8.80 trillion borrowings.
A critical look at the summary notes of the appropriation bill shows that ministries, departments and agencies (MDAs) of government will spend a whopping sum of N13.98 trillion on overhead and personnel in a country where the population has outgrown the amenities.
Only N5.35 trillion is planned for capital expenditure (infrastructure) including the capital component of statutory transfers, yet the masses continue to complain about the state of bad roads, lack of stable and clean electricity, poor healthcare system, bloated unemployment, restive youths, insecurity and a host of other national miseries.
The inadequate capital votes over the years have fueled calls for the trimming of federal agencies to free more money for infrastructure growth. In fact, the 800-page Oronsaye committee’ report submitted on April 16, 2012, which recommended the abolition and merger of 102 government agencies, is still left to gather more dust.
The 2023 appropriation bill details that N7.75 trillion will be spent on overhead and N6.23 trillion on personnel by the MDAs. The Federal Ministry of Finance, Budget and National Planning will take the largest chunk of N8.74 trillion, the Ministry of Defence, N1.09 trillion while other MDAs share in the ‘national cake’.
The proposed budget is not realisable with all the economic indicators, Abu Noruwa, a lecturer at the Department of Finance, University of Lagos, shared his thoughts with InsideBusiness.
What should be done is for the National Assembly to cut down the amount proposed for exigencies and mercenaries and move the money to the productive sector for investment.
According to Noruwa, the infrastructure in Nigeria is a fraud. “For example, look at the Lagos-Ibadan expressway which started in the past government till now, huge sum of money is allocated even in the present budget.
“In Nigeria you can do away with certain abnormalities without being questioned. So, to me there is no infrastructure,” he said.
Explaining that the proposed budget is a flaw and not realistic because economic variables indicators mentioned in the budget cannot be achieved, the Unilag lecturer argued that if the war is stopped and Russia resumes gas and oil supply to other countries, prices of oil would go down as such the benchmark of $70 is unrealistic.
Added to this is that further borrowing to service the budget will worsen inflation [already at 17-year high at 20.52 per cent] and make many Nigerians poorer. Noruwa noted, however, that the budget could be restructured in a way to focus on human capital development and social intervention projects to stimulate investment and create employment for the unemployed Nigerians.
Sharing the same view is Kazeem Bello, the chief executive officer/principal partner with Afrique Capital and Equity Funds Limited, who says the budget is out of balance. “It is simple arithmetic but it failed that simple test.”
According to Bello, who is a global development economist, the total identifiable expenditure, plus fuel subsidies is N29 trillion, noting that the total captured revenue is projected at N12 trillion and the expected loan is N10.2 trillion.
“That equals N22.2 trillion. That budget did not explain or provide where the balance of N7 trillion will come from or how they will generate that. I have stated that the mechanism for our national budget creation is extremely faulty,” Kazeem argued.
Babatope Ogunniyi, a lecturer of economics also at the University of Lagos, said the decision of the government has always been unilateral. “Last year we had a budget and we saw the huge outcry that followed it. So, we should expect the same thing.”
“In the language of the elite, when you dance around a tree it does not change the position of the tree. If you are dancing around a human being, he/she might decide to withdraw and say do not dance around me. But dancing round a tree is just an exercise in futility,” he expressed in parable.
According to the Unilag don, not only are some government agencies siphoning the economy of Nigeria but also that the government is still pumping money into the agencies – such as salaries and all sorts of imbalances in government.
“As such, what you see is a situation where you meet a lot of rigmarole in the application of the wealth of the nation on unimportant things,” Ogunniyi said.
He argued that Nigeria’s budget has always been incongruous amid debt financing, stressing that all in the name of doing this or that, the government is even talking about election, census and other things almost at the same time.
“In some countries it will not happen because all these are heavy assignments that will torture the economy.
“People fail to seek understanding, explanation of how the government works. If the government of the day feels it has to do something so that it will add credit to its portfolio and popularity, it does not help the economy,” he stressed.
He so stressed that “the weight being placed on the economy, coming from these avenues are too heavy. At the end of the day, what do you expect? You expect to see a situation where the government is failing on a daily basis.
“The only yardstick that should be put in place is to open it [budget] for people to discuss, and when they do that they will be able to advise appropriately.”
The Unilag lecturer noted that a couple of years ago, Nigeria was talking about capital projects, among which was to build rail lines.
“Imagine a nation that has yet to fulfil its mandate for its citizens is now routing a rail track to another country and nobody is talking.
“Like the budget they have proposed, they have their reasons for wanting to do one thing or the other even at the detriment of the masses. So these are the issues and that is why fundamentally we say that some of these things in practice are beyond the theory of economics. Economic application has failed totally and that is why we are where we are today,” he lamented.
“Let us have time to go through and restudy this budget for a while before we would be able to decipher on basic things we should expect to see,” Ogunniyi added.
Comments are closed.