UNDETERRED by the country’s precarious financial position, the Federal Government has retained its addiction to waste, luxuries, and slothfulness in the 2022 budget proposals. Snippets of the spending plan currently being considered by the National Assembly and released by the media and civil society organisations reveal how N37.8 billion will be spent buying vehicles and needless repetitive allocations. There is a worrying pattern of maintaining public officials in luxury at public expense amid mass poverty and joblessness.
Insensitive as ever, the Presidency, ministries, departments plan to spend N37.8 billion purchasing vehicles, as reported by The PUNCH. The Centre for Social Justice, a CSO, also itemised what it called “frivolous, inappropriate, unclear and wasteful elements” in the N16.39 trillion budget. Earlier this month, the Socio-Economic Rights and Accountability Project had filed a suit at the Federal High Court, Abuja, seeking an order compelling the government to slash the N26 billion it had earmarked for “local and foreign travels, meals and refreshments, sitting allowances, welfare package” and the presidential clinic.
This is an all too familiar habit of successive administrations of the Fourth Republic. Despite persistent economic adversity, recessions, revenue shortfalls, rising unemployment and mounting debts, they refuse to slash costs or reduce their lavish lifestyle maintained at public expense. The result is deepening poverty. Despite the promise of change made by the President, Major General Muhammadu Buhari (retd), when he rode to power six years ago, he has failed to break with this selfish, mass poverty-inducing practice.
Typically, the 2022 plan is anchored on the shifty ground. With only N10.13 trillion of collectable revenue available to fund it, the budget has an in-built N6.26 trillion deficit, which is 3.39 per cent of GDP (just above the 3.0 per cent cap set by the Fiscal Responsibility Act). Debt servicing will take N3.61 trillion. Of the N6.83 trillion non-debt recurrent outlay, N4.11 trillion, representing 60.17 per cent, relates to personnel costs, while capital expenditure at N4.89 per cent is a mere 30 per cent of the total. Oil production assumption of 1.88 million barrels per day is uncertain as output slipped to 1.23mbpd in October. The assumed exchange rate of N410.14 to US$1 is shaky, while debt servicing projections are also uncertain as revenue targets are falling short and over 90 per cent of what comes in is spent on repayments.
Yet, the main purpose of a budget, say economists, “is to ensure that unlimited needs are prioritised in order of importance.” This allows developing nations to channel scarce funds to critical infrastructure, education, health, and housing, among others. To achieve this, a study by the OECD urges developing nations to target a unity between revenue and spending and cut waste and luxuries. Buffeted by adverse fiscal headwinds, Nigeria’s government should be cutting costs drastically. The country occupies an undeniable position as the world’s poverty capital, with 91 million extremely poor. Its debt burden of N35.46 trillion as of June featured N21.75 trillion domestic and N13.71 trillion external debts. Servicing debts drains almost all revenue, gulping N1.8 trillion, representing 98 per cent of all income generated in the first five months of this year.
Despite this, the Presidency will spend N1.6 billion buying vehicles next year. Since he assumed office six years ago, Buhari has spent N5 billion on vehicles, an amount sufficient to provide 500 primary health centres at N10 million each, according to an online publication. Corruptly, items like computers, printers and furniture recur every year in the budget, while the craze for acquiring new vehicles cuts across the over 600 MDAs. This is repeated annually. About N12.5 billion will be spent in 2022 on the Presidential Air Fleet. Having reneged on his electoral promise to drastically reduce the fleet, Buhari spent N41 billion maintaining it between 2015 and 2020, according to a report by The PUNCH. Elsewhere, Peru’s new president, Pedro Castillo, has vowed to sell the presidential plane and plough the proceeds to health and education.
The government’s profligate financial management deepens poverty and unemployment that is already at 33.3 per cent. Studies show that spending cuts would spur economic growth by shifting expenditure from lower-valued, wasteful activities to higher-valued private ones. Misplaced priorities such as the establishment of more federal universities, polytechnics, colleges of education and additional MDAs should stop and give way to a drastic slash in agencies. Stop giving political, sectional, and religious considerations priority over rational, scientific rigour in public spending. Too much of public funds is spent on less than two per cent of the population. Public officials live in opulence while Nigeria posts some of the world’s poorest human development indices.
There is an urgent need for greater professionalism, public buy-in and accountability in the budgeting process. The current “envelope” system where figures are simply added to the previous year’s items, headings, and subheadings, is lazy, unscientific, and wasteful. Moreover, it facilitates fraud on a grand scale as it allows politicians, lawmakers, and civil servants to build in funds for themselves at the preparation stage. The “zero-budgeting” format based strictly on current needs, revenue and national economic and social priorities should be adopted.
Government budgeting, says development experts, “is the critical exercise of allocating revenues and borrowed funds to attain the economic and social goals of the country.” To achieve this, Buhari must, like responsible governments elsewhere, manage public expenditures more effectively to accomplish “the most economic impact from the production and delivery of goods and services while supporting a healthy fiscal position.” Going forward, the public, through civil society engagement and greater openness in the public service, must seek information and make inputs in the four stages of the budget process—preparation, authorisation, execution, and accountability.
Instead of its penchant for rubber-stamping, inserting un-implementable items, and their notorious self-enriching “constituency projects” into the budget, the National Assembly should exercise greater rigour in scrutinizing appropriation bills, loan requests, and in approving or sponsoring new MDAs.
The country’s precarious economy, worsened by the COVID-19 global crisis, insecurity, and record unemployment, demands drastic cost-saving, asset sales through privatisation, infrastructure build-up, poverty-reduction, and job-creating measures. Buhari and the NASS should stop the culture of waste and sustaining officials in pampered luxury today. All spending should be guided by the urgency to create jobs, boost, and diversify production and revenue as well as reduce the debt burden.