NASS should eliminate waste in 2023 budget


EVEN before its final shape is settled, Nigeria’s 2023 national budget is anchored on a shaky ground. Apart from the embedded deficit of N10.9 trillion in the N20.51 trillion budget, fuel subsidy outlay that is predicted to hit N6.4 trillion or more, and the persistent drop in daily crude oil output and prices might well deliver a fiscal plan that will be dead on arrival. To cement its irrelevance in driving development, the budget is short on capital spending, and replete with the usual waste, luxuries for a few, and repetitive carry-overs from previous years.

Sadly, despite the strong headwinds buffeting the economy and shrinking revenues, the regime of the President, Major General Muhammadu Buhari (retd.), has failed to imbibe the imperative of deploying budgets as effective instruments of development.

Among other failings, Buhari again botched the solemn promise his regime made in 2015 to change the destructive and wasteful practice of “envelope budgeting,” whereby new sums are simply added to previous years’ spending headings and sub-headings, in favour of budgeting based on identified needs. Nigeria suffers the consequences.

Experts say a government budget is the principal instrument of fiscal policy used to encourage stable growth, sustainable development, and prosperity. It is a comprehensive document that outlines what economic and associated activities a government plans to undertake, with a special focus on policies, objectives and strategies for accomplishments that are substantiated by revenue and expenditure projections. Over the years, Nigeria’s annual national budgets have failed to deliver progress, serving only as instruments legitimising waste, serving and enriching a few, and driving the national and sub-national governments into debt.

Typically, the 2023 Appropriation Bill of N20.51 trillion, the last under the Buhari regime, proposes 55.1 per cent of revenues to be spent on debt service and personnel costs. It follows a familiar pattern of prioritising recurrent expenditures and debt servicing over capital projects. This has in turn deprived the citizens of material benefits of budgetary spending.

At N6.31 trillion, debt servicing alone will gulp 30.77 per cent of the budget. Personnel costs will consume N4.99 trillion, representing 24.33 per cent of the total. Combined, debt service and personnel costs would drain N11.3 trillion of the total. This cannot deliver sustainable development.

Clearly, the regime’s dangerous addiction to borrowing is already crippling the economy. Debt servicing has been consistently gulping over 90 per cent of all revenues; it has the largest share after the allocation for recurrent non-debt of N8.27 trillion, which gulps 40.32 per cent of the 2022 budget. This is a recipe for perpetuating poverty. In contrast, only 26.08 per cent, N5.35 trillion is earmarked for capital expenditure. For a country the government says has a $2.3 trillion infrastructure deficit, this is too low.

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The International Monetary Fund has warned that debt servicing might gulp 100 per cent of the Federal Government’s revenue by 2026 unless the government improves its revenue earnings. The government should also heed the World Bank’s admonition that it should curb the rising debt service-to-revenue ratio.

Most worrisome is waste. Billions of naira is frittered away on non-essentials. Despite the planned implementation of Steve Oronsaye’s Report on the restructuring and rationalisation of federal ministries, departments, and agencies, over N206 billion will be allocated to some of the agencies recommended for scrapping. No fewer than 39 of such agencies had huge allocations mainly for personnel costs. This is unacceptable and should be reversed by the National Assembly. The executive should also accelerate the implementation of the White Paper on the restructuring of the civil service in line with current financial realities.

Though foreign travel is part of the itinerary of the President and his deputy, the allocation of N11.92 billion for local and foreign trips and the Presidential Air Fleet does not reflect the country’s current financial predicament. Indeed, keeping 10 aircraft and allocating N508.71 million for foodstuffs and refreshments for the Presidency when many Nigerians are starving demonstrates a self-centered misplacement of priorities.

The budget is not just any other piece of legislation; it is at the core of the economic function of the state by itemising the priorities and the policy guidelines for private and public stakeholders. Buhari is too enamoured of luxury and the pomp of office contrary to the false image of a Spartan outlook he presented on the hustings in 2015. As President, he does not have to undertake all travels, or attend all events. Typically, amid floods ravaging Nigerian 33 states, he has just jetted out to South Korea.

Items like computers, furniture, facility maintenance, stationery and kitchen equipment/tools that keep recurring every year simply empower civil servants to embezzle funds. About N23.57 billion is allocated to purchase new vehicles, N1.07 billion higher than the N22.5 billion budgeted for the same purpose last year. In a time of severe revenue shortage, this is callous and reckless. Huge allocations are also made for the maintenance of vehicles, office building/residential quarters, and generators. The Independent Corrupt Practices and Other Related Offences Commission uncovered 257 duplicated projects amounting to N20.13 billion in the 2021 budget.

As expected, experts have over time faulted the country’s budgeting trajectory. Nigeria’s economy is vulnerable with fragile growth driven solely by increased oil production and rising crude oil prices. The World Bank asserts that fiscal management and broader macroeconomic policy become complicated when government financing is highly dependent on natural resource revenues and therefore susceptible to wide fluctuations. This challenge is compounded further in a context of federalism, when sub-national governments’ spending constitutes a significant share of consolidated government financing and lack a tradition of strong fiscal discipline.

The government is reckless; the National Assembly that should check it is ineffective, and its members preoccupied with personal and group self-enrichment. But the NASS can still knock prudence into the 2023 Appropriation Bill, prune waste and the recurrent vote, and increase capital spending. The country cannot afford to carry on with waste as usual; for once the federal lawmakers should rise to the occasion.


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