Three weeks ago, on 10th July, President Muhammadu Buhari signed the Appropriation (Repeal and Amendment) Act, 2020 into law. At the signing ceremony, the president explained that although he had assented to the 2020 Appropriation Act on 17th December 2019, a revision became necessary as a “response to recent developments, in particular, the COVID-19 Pandemic”. This followed the collapse of crude oil prices in the world market “from a high of $72.20 per barrel in January 2020 to below $20 per barrel in April 2020.”
All things considered, amending the Appropriation Act was the right thing to do. But questions remain as to whether the budget reflects an understanding of the gravity of the situation in which we find ourselves as a nation. Despite the obsession with raising taxes, recent developments at the National Assembly have shown clearly that we need to look beyond revenue to how it is expended. Besides, increasing taxes at a period the majority of Nigerians are in distress can only worsen their burden. If there is anything that a time like this demands, it is that we cannot continue to do the same thing while expecting a different outcome. Sadly, this is precisely what we are doing.
From ‘Nigeria’s 2016 Zero Budget!’ to ‘The Illusion of Budget Performance’ and ‘Budget War and Dysfunctional Envelope System’ as well as ‘Of Government and Budget Blues’, I have on several occasions shared perspectives that underscore the fact that what we call budget in Nigeria is basically sharing money. I have also used my personal experience in government to illustrate the point. But in a revealing Twitter thread last year, https://threadreaderapp.com/thread/1125199032756908032.html, Mr ‘Laolu Samuel-Biyi wrote, “If you want to keep hope alive in Nigeria, don’t look at the budget”. It is an admonition that would have served me well if I had not taken the trouble to spend valuable hours this week going through the details of the amended 2020 budget, beginning with the Covid-19 Intervention Programmes.
In addition to the N126 billion voted for ‘Building a resilient health system’ (out of which N86 is for health infrastructure across Federal Medical Centres, Teaching Hospitals and others), most financial allocations are devoted to the service of transactional matters. For instance, under the Covid-19 Intervention Programmes, the Ministry of Agriculture and Rural Development will spend N43 billion on rural roads across six geopolitical zones this year. Curiously, another N60 billion will go to the Federal Roads Maintenance Agency (FERMA) under the Ministry of Works and Housing for the “maintenance of roads through contracts and direct labour”, also across the six geo-political zones.
In the Ministry of Labour and Employment, there are several funding items, including ‘Digital Youth Nigeria Programme—Specific Focus on Positioning Youth for Remote Job Opportunities, Tapping into Global Technology Outsourcing Market’ which goes for N2 billion; ‘Digital Skills Training (Beginner/Mid-Level): Coding, Web Development, Robotics, Data Science, Cloud Computing, Cyber Security in the six geo-political zones’ which gulps another N2.94 billion and ‘Green Stimulus Framework: Capacity Building Training Workshop on Energy Efficiency and Renewable Energy Technologies and Empowerment Programme for Wealth and Job Creation in the six geo-political zones’ which accounts for N690 million. Aside the public works programme (1000 persons per LGA for 36 states and FCT area councils) for which N52 billion has been earmarked, there are several other budget subheads for the additional N9,589,160,000 under this ministry, including ‘Equipment for Vocational Skills Training in the six geo-political zones’ at N520.668 million and ‘Equipment for Youth Centres, Digital Skills Training, Robotic Laboratories in the six geo-political zones’ for which N900 million has been allocated.
However, it is in the Ministry of Humanitarian Affairs, Disaster Management and Social Development that I fail to understand what a number of the budget line items actually mean: ‘Covid-19 Cash Transfer: President’s Directive, the Disbursement of Funds to an additional 1 million Households further (cash transfer)’ at a sum of N30 billion. The ministry also has N1 billion for ‘Data Collection, Validation’ as well as another N37.5 million for ‘Data Cleaning and Analysis’. ‘Monitoring and Evaluation’ takes N65 million while to ‘Design and Develop Covid-19 Response Register of Beneficiaries’ takes only N3.75 million with another N1.25 for ‘Design Covid-19 Cash Transfer’. Perhaps most curious is the ‘ongoing’ project of N742,138,691 for ‘Durable Solutions and Care Maintenance for Persons of Concerns in the six geopolitical zones’. It is one of the budget lines not presented in round figures. Another N46.6 million is for ‘National Durable Solution Framework for Persons of Concerns in the six geo-political zones’.
From buying motorcycles and tricycles to sensitizations, trainings and skill acquisition programmes gulping hundreds of billions of Naira to construction of VIP toilets to supply of relief materials and Toyota Hilux vehicles to hundreds of multi-million Naira grants, the amended 2020 budget is, like previous budgets, simply about sharing money on items that are repeated annually. The N100 billion Zonal Intervention Projects, of course, belong to our National Assembly members and if you believe Godswill Akpabio, we now have an idea of who the contractors are. But that is not the whole problem.
Let’s examine a few of the items: ‘Supply of fertilizers to some operatives in Bauchi Central Senatorial District for N50 million’. Don’t ask me who these ‘some operatives’ are because I have no clue. ‘Grant to Kutiriko Jummat Mosque Committee, Agaie/Lapai Federal Constituency, Niger State’ for the sum of N10 million with another N10 million grant to ‘Lapai Emirates Development Association’. Before you shout ‘Nigeria has been Islamised’, please take this: ‘Construction of Admin Block at ECWA Theological College (Christian Academy) Zambuk, Yamaltu/Deba’ at N19 million. My friend, Waziri Adio, the Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI) is from Iwo so I will use this medium to call on him to return home for his share of the N40 million for ‘Community support in Iwo, Ejigbo and Ola Oluwa LGA in Osun West Senatorial district’ included in the 2020 budget!
However, the best way to identify the heavy hitters is by the size of what they can take home. The Ministry of Labour will cough out N640 million for three projects: ‘Empowerment items for the people of Kano North Senatorial District’ (N200 million); ‘Empowerment items for the youths in Kano North Senatorial District’ (N210) and ‘Empowerment items for women of Kano North Senatorial District’ (N230 million). It is curious why ‘the people of Kano North Senatorial District’ are different from their youths and women but our lawmakers have their own way of doing things.
No grammatical rigour even exists for many of these federal budget items. Supply of ‘empowerment materials for youths and women in Ondo motorcycles, tricycles, grinding machine, fashion and training equipment, barbing and hair dressing equipment in Ondo Central Senatorial District’ will gulp N60 million if you can decipher that while ‘purchase of one unit of CAT Caterpillar grader equipment for rural road rehabilitation in Ondo Central Senatorial district’ takes another N70 million. Assuming this caterpillar is purchased (and you find this kind of line item every year), who takes ownership? Well, since the money for this particular caterpillar is coming from the Public Complaints Commission (yes, you heard me correctly), it is a matter of case closed!
Following my column of last week, a National Assembly member asked me, ‘Why are you picking on us?’ and I told him it is because the power of appropriation belongs to the legislature and to the extent that every budget is a law, they should be held accountable. At a time we can no longer rely on oil money to fund the budget and Nigerians are increasingly being taxed, we also cannot continue to fritter away public money. Until the National Assembly begins to take seriously their ‘power of the purse’ which demands not only transparency and accountability but also a measure of rigour from members, the budget will remain a bazaar. Given the national economic situation that is now worsened by a global pandemic, we cannot continue to waste borrowed money to service private interest.
The economic and human impact of the COVID-19 pandemic on Nigeria, according to a recent World Bank position paper, “will be severe, even if Nigeria manages to contain the outbreak locally”, and this projection is based on a number of identified variables which include the fact that Nigeria’s economy and the funds available to the three tiers of government are highly dependent on sales of crude oil which account for 90% of exports, 30% of banking sector credit, and 50% of (consolidated) government revenues. Besides, even non-oil industry and services in the country depend on the oil industry.
Meanwhile, despite the fact that oil accounts for only 10 percent of our Gross Domestic Product (GDP), the national economy is, by World Bank summation, highly vulnerable to price shocks because of financial sector risks since credit is concentrated in the sector which then puts pressure on the foreign exchange rate. And with the sharp fall in oil prices this year, the economy is projected to contract by about 3% with the consolidated government revenues expected to fall by $10 billion or more, at a time when fiscal resources are urgently needed to take care of about 90 million Nigerians who live in extreme poverty.
Local economic activity, according to the World Bank projections, will also be negatively impacted through multiple channels with those in the informal sector more likely to lose incomes and daily livelihoods as a result of Covid-19 pandemic that has already created a breakdown in markets and supply channels and a pronounced decline in demand. While the largest increases in vulnerable Nigerians may be in the rural and semi-urban communities, the World Bank believes that adverse impacts will be national due to a projected decline in remittances, particularly from domestic migrants since nearly half of the population is in households that receive one form of remittances or another. The extreme poverty rate is also projected to go up with estimation that the number of poor is likely to increase by between 10 to 15 million Nigerians by 2022.
The foregoing prognosis does not bode well for our country and we need to begin to do something about it. That is why the current probes of financial impropriety at both the presidency (on EFCC) and the National Assembly (on NDDC, NSITF and others) must go beyond media entertainment. If we must be honest, the current budgeting method suits both the executive and the legislature because everybody has something to spend regardless of whether or not it would meaningfully impact the economy in the financial year. And there is no way we can divorce the financial scandals that now dominate public discourse from the larger Nigerian challenge regarding public trust. Our structural deficit encourages lack of accountability in a system that was founded on ‘sharing the national cake’.
While the idea of restructuring may mean different things to different people—and I am aware the fixation of vocal proponents is about North and South or distribution of rent—what some of us advocate is a serious national conversation around the appropriate institutional design to make government and those who hold the levers of power, accountable to Nigerians. It is about how we can harness the potential of our country for the greater good of our people. And this will require unbundling the suffocating hands of Abuja and allowing local institutions to emerge and evolve. I wish all my Muslim readers Eid Mubarak!