Opinion: The budget and our expectations for the new year

by Ifeanyi Uddin

OKONJO-BUDGET

The drama, last week, started with the exchange of missives whose contents ministered well to purveyors of the prurient, saw what looked like the implosion of the ruling party, and ended with the alleged humiliation by the National Assembly, of the Coordinating Minister for the Economy, who had appeared before that august body to present the 2014 budget proposal.

The run up to the end of this year has been a season of high-wire performances across the land. The theatrics have ranged from the wretched to the extremely commonplace; and all through it all, our common space has been poorly served.

The drama, last week, started with the exchange of missives whose contents ministered well to purveyors of the prurient, saw what looked like the implosion of the ruling party, and ended with the alleged humiliation by the National Assembly, of the Coordinating Minister for the Economy, who had appeared before that august body to present the 2014 budget proposal.

In all of last week’s events, truth was the most obvious casualty. As a nation, we disputed (and, remarkably, continue to quarrel over) the authorship of a letter, which was not published posthumously.  The letter from an ex-president to the incumbent spoke of acts of deceit and dishonesty in “high places”. No one is still sure how much of the Nigerian National Petroleum Corporation’s (NNPC) earned revenue ought to be repatriated, and how much was (or was not) since 2011. Moreover, the budget proposal was a study in parsimony, where the truth was concerned.

“The budget is going to support the push in agriculture, it will kick-start the housing sector where we can create more jobs, and it is designed to promote our policies that would support manufacturing because hobs would be created there. Industries will also be created in solid minerals. All this support will continue to be unleashed. Job creation is the key to really solving the problems of the Nigerian economy”. That is how newspapers, on Friday, reported the Coordinating Minister of the Economy as having commented on the N4.6tn 2014 budget proposal.

By how much are the figures in this budget different from last year’s ― at least in absolute terms? If the answer is “not much”, then, the next question is “what came off the appropriations for last year?” Last year, crude oil prices remained in the US$100 per barrel range, and we continued to produce (and sell) crude oil above our OPEC-assigned quota. We did not invest in new infrastructure/capacity. We did not save. Instead, we depleted savings from previous budget rounds. Obviously, jobs could not have been created in the numbers suggested by the minister, if the numbers all point to a deceleration in domestic output in 2013. Government may seriously wish to do all that the minister speaks to, but it will need to find a different instrument.

Proposals to spend 72% of next year’s budget on salaries, fuel, stationery, etc. means the budget cannot seriously be one that maintains and builds the new infrastructure without which the real sectors of the economy might remain comatose. Such a budget may support make-work schemes, including SURE-P and community services programmes. It may, even, help hold up domestic demand. But that’s about all it could possibly do.

The policy and reform initiatives that will drive the levels of change that the minister so heartily speaks of (and clearly desires) are not likely to be ones that we can deliver over a 12-month period. They will of course include further privatisations of key sectors of the economy (as this government has continued to do in the power sector). But more importantly, these reforms would include transitioning government from service provider to regulator of the newly privatised sectors.

We should, thus, see these costs and their associated gains in the 2014 budget appropriations if truly government is headed in that direction. Gains from not bearing the costs, any longer, of staff in now privatised entities, may, doubtless be offset by the costs of such transition. But we should see these clearly. In essence, the budget should seek to build the infrastructure for medium- to long-term growth. It ought not to see the recurrent side account for a growing proportion of government spending.

Then again, it is clear that the 6 – 7% annual growth rate that we have dwelt on since 2003 has served us poorly. We should aim for nothing short of 10% annually over the next 20 years. This is beyond budgets. It is about changing how we run this country.

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This post is published with permission from Premium Times Newspapers

 

Op-ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija.

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