23

Mar

IS N6TN "GHOST BUDGET" STILL DEFENSIBLE? 21032016

2016-03-21

IS N6TN "GHOST BUDGET" STILL DEFENSIBLE?
BY HENRY BOYO

It is regrettable, that the absence of a more salutary social impact, from  serial partial implementation of annual budgets, has gravely eroded public expectation and made Nigerians non-challant about this constitutional requirement. Unfortunately, the unfolding drama surrounding the 2016 version of this, pivotal yearly ritual, may not also inspire public confidence that, this year's plan will positively touch our lives.

Indeed, cynics may suggest that, It is probably a deliberately programmed recipe for failure, if one consistently embraces, any annual fiscal plan, which invariably forfeits a quarter of the year before implementation commences. Incidentally, in his recent interactions with Nigerians resident in the UK, President Buhari had explained that several MDAs deliberately warehoused most of their capital vote until the fourth quarter, before they frantically adopt various strategies to evacuate the bountiful residual funds into personal accounts, with fraudulent invoices and waybills.

 According to Buhari, the adoption of the Treasury Single Account (TSA) may have protected over N2Trillion from being corruptly siphoned into private pockets, by 31st of December 2015. Consequently, Mr. President has suggested that the projected significant revenue shortfall of over N2Tn, in the 2016 Appropriation bill, may therefore not require any loan support. 

Buhari should, however, be worried that an over N2Tn embedded deficit budget, would compel an allocation of, well over 35kobo from every Naira income earned, for servicing both the existing and new debts. Evidently, no country's economy can be safe or indeed prosper with such precarious application of their hard earned precious revenue.

Indeed, the present already oppressive debt service burden, probably, should have advised a more responsible and sensitive fiscal plan, consciously designed to produce a balanced budget, so that further debt accumulation, which might ultimately endanger our sovereignty could be suspended. It is unlikely that Buhari would gleefully endorse the present, historically highest ever, projected deficit of over N2Tn, if the horrid implications were thoroughly explained to him;

Surely, Buhari's endorsement of such fiscal recklessness would be at cross purposes with his renowned frugality and patriotism. Consequently, discerning analysts were alarmed when, Vice President Osibajo, initially flew the kite of a proposed N8Tn budget; clearly, with crude oil trading, humbly below the $38/barrel budget benchmark, it would have required over N4Tn ($20bn) loan to fund an N8Tn budget, with the attendant odious allocation of over 50kobo of every Naira revenue to debt service annually thereafter.

Fortunately, Nigerians were spared this dismal prospect with a reduced fiscal plan of N6.1Tn, even though this level of expenditure will inevitably still extend current debt service values beyond a disenabling and distortional 40 kobo from every Naira. Invariably our debt burden would become progressively perilous, if persistent low crude prices should also instigate further deficit financing in 2017.

So the question obviously is, why Buhari would so readily accommodate a heavily debt laden fiscal projection in such an austere season? 

Presumably, the budget figures, President Buhari laid before the legislature were consolidated between Jun-Dec 2015, after thorough and exhaustive consultations with stakeholders and the respective Legislative committees responsible for MDA oversight. Sadly, reports of these 'extensive' consultations, may not have been justified by the series of absurdities that gradually unraveled after a budget, which was personally presented by President Buhari to the National Assembly, on December 22nd, was declared to be missing, less than four weeks later.

A Presidential aide was subsequently fingered by the Senate for swapping the original budget document with a dirty copy! Although, the Presidency did not deny the allegations of budget fiddling, nonetheless, on January 19, Buhari voluntarily sent a corrected version to replace the discredited budget with NASS.

Sadly, a casual evaluation of the corrected version by the Legislative Committee, still threw up several inconsistencies. Indeed, it soon became clear that some Ministers and MDA Management still fumbled when defending their respective Expenditure projections, especially when these were compared with historical allocations to the same Agencies in the past.
Alarmingly, the Health Minister, Prof Isaac Adewole, for example, outrightly disowned some contentious provisions in his ministry's budget, when he claimed that " this was not what we submitted"; and later added that "we will submit another one. We don't want anything foreign to creep into that budget". Adewole's reaction definitely raises questions as to which version of the budget he sought to defend, and why the National Assembly's copy was still different even after legislators had received, a corrected version from the Presidency. 

Furthermore, the Health Minister confirmed that his Ministry had nothing to do with a projected provision of N3bn for a Statehouse Clinic; indeed, this allocation is clearly lopsided, when compared with the paltry N2bn allocation for developing new hospitals and clinics throughout the country. Consequently, in this regard, the Minister cynically concluded,  that " I hope it's not the same rats that changed things in our budget, that also changed the State House Clinic allocation"?

The Senate Committee on Education has also reported that they had uncovered about N10bn that was hidden in the Ministry's projected allocation for 2016; the Committee also wondered why personnel attached to parastatals in the Ministry, received much higher increases in allocations annually, while similar allocations for all federal schools and universities rose less steeply?

Indeed, there is nothing to suggest that the respective MDAs, have so far, within the tight time frame of barely four weeks, satisfactorily reconciled their allegedly controversial budget projections with the respective National Assembly Committees; thus, it is not yet really clear, if the Legislators will therefore feel obliged to approve an inchoate budget with several loose nuts and bolts, just to deliver on their promise to do so before the Easter break, which incidentally is now less than 3days away. The critical question, however, is whether NASS can in good conscience and with all sense of responsibility, also condone the additional debt burden, that a N2Tn plus deficit, with crippling service charges will bring upon our Nation and generations yet unborn.

Besides, while addressing some Nigerians resident in Saudi Arabia, in February, President Buhari had, himself, condemned the distortion of the budget proposals by entrenched interests; the President insisted, according to his spokesman, that  the "unauthorised alterations" had completely changed the document from the one he presented to the National Assembly. The question therefore, is who produced the "ghost budget," and how much more "unauthorised alterations" still remain undiscovered in the 2016 projections.

Thus, with the related controversy on authenticity, and the various revelations of several duplications, inflated projections, and spurious multi billion Naira subheads smuggled into the 2016 budget, Buhari may have inadvertently kept his steel gates against corruption, wide open for treasury looters to enjoy another bonanza year, if the N6Tn plus 2016 budget is ultimately passed in deference  to speed and public image rather than the  patriotic responsibility to recognise that the predatory band of rats who gleefully proposed heavy debt accumulation to support a N6tn bonanza budget, despite dwindling revenue, still remain entrenched in ministries and MDAs.

Instructively, these budget rats do not also care that any increase in government borrowing would invariably also increase cost of funds and distract the attention of commercial banks from supporting the real sector.
Ironically, however, the CBN will invariably also  become concerned that government expenditure of over N6Tn in 2016 will increase money supply and challenge its ability to successfully keep inflation and cost of funds at levels that will support consumer demand and reduce interest rates for real sector advances. Furthermore, bloated Naira liquidity will also challenge the Naira exchange rate and fuel pricing and ultimately drive inflation well beyond ten percent!

SAVE THE NAIRA,SAVE NIGERIANS!!