NIGERIA'S PROPOSED BUDGET FOR 2016

The 2016 Budget will be the first Budget to be formulated and implemented by the administration of President Muhammadu Buhari. Given the numerous campaign promises the President made and the change mantra of his party, the All Progressives Congress (APC), public expectations about the impact of the Budget on the economy and the social status of the average Nigerian are understandably at an all-time high. Never has so much been promised by a Nigerian President and never have there been such great hope created in the hearts of Nigerians regarding the good government can do and will do to lift their living conditions.

The enormous weight of the expectations is already being felt by the President and his party. Soon after assuming office, President Buhari said Nigerians would stone him if he fails them. But the consequences of his failure may be much worse for him than he anticipates. Nigerians are in a hurry and are tired of platitudes from their leaders. Already cynicism is so soon returning to public discourses about the Federal Government's intentions and actions from a people who were so optimistic about the new government just four months ago.

Efforts by the spokesmen of President Buhari and the APC to manage the public expectations engendered by the flowery campaign promises have been tepid and unconvincing. Doubts about the sincerity of the President and APC are no longer muted. Even the First Lady (or the Wife of the President as we are told she should be called) has, uncharacteristically, waded into the matter. On Tuesday, 10th November, 2015, she issued a press statement calling on her party to fulfil its campaign promises regarding the payment of the N5,000 monthly Unemployment Allowance to the "25 million most vulnerable Nigerian youths" and the daily feeding of all Nigerian Primary School Pupils. I believe she must have already persuaded her husband to implement the promises and that he must have given her permission to go public with her advocacy on the matter. Other than the APC Senators who recently rejected the motion moved by the PDP's Senator Phillip Aduda that the Federal Government should commence payment of the N5,000 monthly Unemployment Allowance, might there be other elements in the ruling party who are opposed to the fulfilment of the campaign promises such that the First Lady/Wife of the President felt impelled to intervene in the matter and even do so publicly?

The Vice President, Pastor Prof. Yemi Osinbajo, has been indicating the Federal Government's plans regarding the 2016 Budget which is being prepared. Firstly, he said it would be a Zero-based Budget; meaning that the expenditure estimates would not be mere increments on the previous year's figures, as have often been the case in our past Budgets, but projected amounts for each expense head would be computed in isolation and justified given consideration to the actual essential needs and the government's policy priorities. This is a salutary development and I applaud the Buhari Administration for this. It portends good for our budgeting process if well implemented.

Last week, while speaking at the Retreat for Ministerial Nominees in the State House, Abuja, the Vice President said that the Federal Government is working on the 2016 Budget and that the Total Expenditure would be between N7Trillion and N8Trillion. He also indicated that the proposed Capital Expenditure would be N2Trillion. This means that the Federal Government is planing to spend about N5Trillion/N6Trillion on Recurrent Expenditure even though it has now rationalised the Ministries to just 25. The proposed Recurrent Expenditure in the 2016 Budget is more than the entire
Federal Government Budget for the 2015 Fiscal Year.

Clearly, there are no plans to prune the size of the civil service. It also appears that the huge sum being set aside for Recurrent Expenditure may include provision for the payment of the N5,000 monthly Unemployment Allowance and the Lunch-For-School-Pupils programme promised by the President. Alhaji Lai Muhammed had said that the reason the APC was yet to implement the Unemployment Allowance is because "the Jonathan Administration did not make allowance for it in the 2015 Budget". Maybe Alhaji Lai Mohammed expected former President Goodluck Jonathan to have included it in his government's 2015 Budget in anticipation of his losing the 2015 Presidential Election. LOL!!!

The Buhari Government needs N900Billion per annum just to pay the N5,000 Unemployment Allowance to our "25million vulnerable youths". With a population of about 170million people and in the absence of authentic demographic data, I suspect the number of our "vulnerable youths" may be nearer 100million! The amount needed to feed our Primary School Pupils nationwide would be much more than that required to pay the Unemployment Allowance. And it would depend on the quality of lunch being planned for our children. It sum required could be as much as N1.5Trillion per annum.

How is the Federal Government of Nigeria going to fund a N7Trillion or N8Trillion Budget in 2016 given our present economic realities? Does it expect another Oil Boom? What is the likelihood of the price of crude oil leaving the sub-$50 per barrel level it has been at and rising to even $60 per barrel within the next 14 months considering the fundamentals and dynamics of the international market for hydrocarbons?

Yes; of course, the Federal Government could borrow to fund the 2016 Budget. But is this desirable, even if feasible, given that our nation's Total Debt Stock (FGN plus States) as at 30th June, 2015, stood at US$63.81Billion or N12.12Trillion? The Federal Government's Domestic Debts as at 30th June, 2015, was US$42.63Billion or N8.40Trillion. Our External Debts (FGN plus States) was US$10.32 or N2.03Trillion. With our External Reserves reportedly standing at just US$30.13 as at 27th October, 2015, our declining Foreign Exchange Inflows and our unabated demand for imported products, Nigeria is no longer attractive to private foreign lenders as it had been in recent years.
The Federal Government cannot find cheap foreign private debt financing for the proposed 2016 Budget especially since we have been delisted from the prestigious JP Morgan Government Bond Index. A couple of days ago, Barclays Bank equally anounced that it would soon delist Nigeria from its own Government Bond Index. Both Indices are concerned that our debt instruments are no longer liquid in view of the foreign exchange transfer restrictions imposed by the Central Bank of Nigeria in its futile efforts at defending the Naira without the robust Foreign Exchange Reserves level required to do so.

Except there is an unexpected positive development in our economic fortunes, the Effective Yield Rate of Nigeria's Federal Government Bonds will no doubt rise shortly and it could become as high as 9% or even 12% in the near term since Nigeria is now considered a high risk market given our new Foreign Exchange Transfer Risk. This also has negative implications for the Eurobonds issued by our corporates. Domestic debt funding of the 2016 Budget is not feasible in view of the sheer volume of money we need to source and the lack of liquidity in the market to absorb it. But if the Central Bank of Nigeria pushes it through using its regulatory leverage with Nigerian financial institutions, our private sector borrowers would be further crowded out of the domestic debt market and the cost of funds would rise concomitantly. In addition, the expansionary fiscal stance signaled by the 2016 Budget proposal would also exacerbate the inflationary trend which is already worrying on account of the impact of the depreciation on the value of the Naira.

I hope that the Buhari Administration rethinks its expressed Budget plans 2016. Nigeria should cut its coat according to its cloth. The country is virtually in a recession and it can ill afford spending money it does not have. The 2016 Budget should be austere. May God help us Jesus' Name. Amen.

God bless Nigeria.

NIGERIA DI FURE!

PRESIDENT BUHARI'S CAMPAIGN PROMISES: TIME FOR A REALITY CHECK

All around the world politicians say a lot of things while campaigning for office. They make many promises in a bid to woo voters to side with them. Most electoral promises weigh less than the air that conveys the words from the speaker's lips. The euphoric polical rallies serve only one purpose: get votes whatever it takes. When politicians speak extempore few expect them to even remember what they said much less make good on their verbal promises.

 

But when electoral campaign promises become codified as a written document and articulated in diverse official campaign and promotional literature of the political party of the politician aspiring for office, it is a different matter. The assumption is that the politician is actually sincere and, to prove his bona fide, he/she has reduced the promises into writing thereby indicating that a contract with the electorate is in effect if he/she wins the election and assumes office.

 

As the 100 Days Benchmark drew near last August, Nigerians were treated to the shocking denial by Alhaji Lai Mohammed, the Publicity Secretary of the All Progressives Congress (APC), that President Muhammadu Buhari "never promised to do anything within 100 days" just as Mr. Garba Shehu, the Senior Special Assistant to the President on Media and Publicity, tried in vain to distance the President from the widely circulated Buhari Campaign document titled "My 100 Days Covenant With Nigerians". It was a comical but failed effort to manage the high public expectations of a President who had been elegantly robed in grand Messianic Couture by his party and political handlers.

 

On Wednesday, 4th November, 2015, another drama played out in the Senate. Senator Philip Aduda (PDP, FCT) moved a motion for the payment of N5,000 (Five thousand Naira only) monthly allowance to unemployed youths across Nigeria. The motion was greeted with shouts of “No! No! No!” when Sentor Aduda tried to explain the basis of his proposal. Attempts by the Minority Leader, Senator Godswill Akpabio, to second the motion were disrupted by the rowdiness. Intervening, President of the Senate, Senator Bukola Saraki, put the question to a vote but the Senators responded along party lines. While the PDP members yelled ‘’Aye’’ in favour of the motion, the APC Senators, who were in the majority, shouted "Nay" and defeated it.

 

Hmmmm......

 

Now, what is one to make of this development? Are the APC Senators unaware that President Muhammadu Buhari had made the promise to pay unemployed Nigerian youths such an allowance a major part of his electoral campaign? Do they realise that the promise resonated with many youths and that it may have influenced how they voted in the last Presidential election? Did the APC Senators consider the effect their vote would have on the morale of the youths who have been eagerly anticipating the payment of the Unemployment Allowance? Was the manner in which the APC Senators cut down the motion the best way to deal with such a sensitive matter? Do the APC Senators care about the sensibilities of the Nigerian youths?

 

It is pathetic that the same APC Senators, who recently rejected the recommendations of a committee which they set up to review their overly generous salaries, their obscenely huge allowances and their scandalous perks, would reject a motion to pay an allowance of just N5,000 to unemployed Nigerian youths in line with their party's campaign promise and despite their "change" mantra. Evidently, their self-interest supercedes national interest. Sad.

 

But I am in no doubt that the APC Senators have also woken up to the reality of the economic state of our nation and the impracticality of the promise to pay unemployed youths an allowance. That was just another pie-in-the-sky campaign promise which would never have been made had the APC actually expected to win the Presidency. The One-Meal-A-Day-For-School-Pupils is another. Even at the best of times, Nigeria does not have the financial resources to cater for the sheer number of our unemployed youths and Primary School children in the manner promised. Doing so while our economy is now virtually in a recession is totally impossible.

 

Should the APC Senators not have used the opportunity of Aduda's motion to painstakingly explain to Nigerians why the payment of the N5,000 Unemployment Allowance is no longer feasible (contrary to their plans) and what measure their party intends to implement to make it possible in due course? Do they not realise the damage they have done to the President's credibility by making a circus of such an important economic and social issue? Was this not a golden opportunity to deflect whatever political point Senator Philip Aduda and the PDP might have intended to score in raising the motion by elaborating on the APC agenda for jobs creation, youth empowerment, diversification of the economy and the development of the employment capacity of our micro, small and medium enterprises? In fact, the APC could have seized the day and come out smelling of roses had their Senators not taken the low road of engineering an uproar in the hallowed chamber of the upper legislative house.

 

As I have said before, the Presidential Election has been won and lost. Gen. Muhammadu Buhari is now President Muhammadu Buhari. It is now irrelevant who one routed for and voted to be President. The serious business of governance, good governance at that, must be the priority. While it is not easy to eat humble pie and acknowledge where one erred, it is imperative that the President and the APC jettison the campaign promises which are unworkable, apologise to Nigerians for making them, and focus on those ones which can be actualised given our present economic realities. Nigerians are very forgiving. Nigerians want President Buhari to succeed. And succeed he must.

 

God bless Nigeria.

NIGERIA DI FURE!

PRESIDENT BUHARI AND THE SPIRIT OF JEHU

Once again, President Muhammadu Buhari has reiterated his commitment to fighting corruption while speaking to the Nigerian Community in India. It is becoming wearisome hearing the President announcing his anti-corruption stance. Five months into his administration, the signals are becoming clear that the President's commitment to dealing with corruption us doubtful. At best, it is selective and focused on those who are perceived as enemies of the President and key members of the ruling All Progressives Congress (APC).

The romance of President Buhari with former President Olusegun Obasanjo is one such clear signal. The refusal of the President to reopen the Halliburton case in which the United States Government has already established prima facie culpability of Obasanjo in the bribery scandal is rather unfortunate. Why is OBJ untouchable? If indeed he is guiltless, why is he being shielded from prosecution and eventual absolution by the courts? What message is the President sending to Nigerians? That some people are sacred cows?

Another case is that of Chief Timipre Sylva, the former Governor of Bayelsa State, who was being prosecuted by the Economic and Financial Crimes Commission (EFCC) for alleged corruption. Even in the absence of an Attorney General of the Federation who has the constitutional discretion to withdraw criminal cases being prosecuted by the Federal Government and its agencies from court, the EFCC suddenly made a U-Turn and dropped all the charges against Chief Sylva without bothering to explain its action to the Nigerian people. Today, Chief Sylva is the APC Candidate for the upcoming Gubernatorial Election in Bayelsa State.

Much has been said about the nomination of former Governors Rotimi Amaechi and Babatunde Fashola as Ministers despite the many petitions against them which the EFCC has not even bothered to invite them for preliminary interview as it is the Commission's practice. For a government which continually restates its avowed commitment to fighting corruption, would it not have been better to only nominate Nigerians without any moral baggage to such high office? Of course, allegations and the submission of petitions do not mean guilt on the part of the accused. But the President is losing in the realm of public perception when he closes his eyes to these matters while others (like Mrs Deizani Allison-Madueke, Col. Sambo Dasuki and Senator Bukola Saraki) who have similarly been accused of corruption are being vilified and appear to have been adjudged guilty until they are proven innocent. This sends mixed signals which make many cynical about the President's readiness to stamp out corruption.

As the President has often said, corruption will kill Nigeria if Nigeria does not kill corruption. But if he is to succeed in this war, he must take on the Jehu Anointing. Jehu was anointed by God to execute judgment against the house of King Ahab and his wife, Jezebel, the wicked and idolatrous Queen who had defiled the nation with abominations. Jehu was merciless in fulfilling his assignment. President Buhari must equally be merciless in his war against corruption. He must not mind whose ox is gored. There must be no sacred cows. It must be evident to his friends and foes that he indeed has zero-tolerance for corrupt practices and corrupt people. May God help him to truly rid our land of the abomination of corruption.

Oh LORD, please endue President Muhammadu Buhari the Spirit of Jehu and help him to wield the Sword of Judgment against any and all who have plundered our nation without fear or favour in Jesus' Name. Amen.

God bless Nigeria.

NIGERIA DI FURE!