With the reported passing of the budget by the National Assembly last week, the game of endurance to which Nigerians have been subjected would appear to be over. Barring that the issues raised by the President on the budget becoming another occasion for mutual recriminations and needless showmanship, Nigerians can heave a sigh of relief that the balm in finally at their doorsteps.
Thanks to the enduring myth that everything begins and ends with what government chooses to do or not to do, the ritual of budget and budgeting have come to acquire the character of a fetish. The manufacturer, we are told, needs to know the direction government is headed before plodding on; same for our flight-by-night portfolio investor friends – they can’t seem to find the nerves to do anything until the budget is passed! Even the farmer, we are told, has learnt to hold back his cropping plans for the fear of the government magic called the budget! Hopefully, their nightmares are over!
Agreed, the budget is an important document. Not only does it lay out the government‘s financial plan, the statement embodies its philosophy and its priorities in a given year. To that extent, it is very important. My point of departure is when the instrument is elevated to the level of fetish – in which case it becomes an alibi for doing nothing!
Let me state that this year’s budget is important in more ways than one for the Buhari administration. First, beyond the fact that it is the administration’s first budget in office, the wave of expectation that swept it into office makes it a defining one. Added to that is that the budget is coming at a particularly difficult time – a period of low oil revenues at a time of massive infrastructure gaps, worrisomely low industrial cum manufacturing capacity and low consumer spending. Indeed, those understandably were the challenges Budget 2016 sought to confront. Expansive in ambitions, it coming was to herald the proverbial crossing of the Red Sea.
I have argued elsewhere that the N350 billion set aside for capital spend in the 2016 Budget is a huge amount by any standard. Even by Nigeria’s profligate standards, it represents a haul, which, well applied could go a long way to make a difference to the parlous infrastructural situation – even if, as we know, that the tidy sum, in the hand of our thieving cabal may be no more than ‘chicken change’ to service their idle fantasies. This is where the long-suffering Nigerians who have in the past few weeks endured the sweltering sun in vain search for fuel to buy, the citizens currently under the throes of insomnia from the unbearable heat after being sucked into the evil devices of the utility companies, and for whom the administration had promised relief, would need to pray!
Let me proceed by setting out some of the myths that have endured about our budgets against the backdrop of what the budget cannot do. First is the idea of the budget as cure-all pills to our many troubles. It is certainly not! As a financial statement, what it does is set out parameters for what is achievable in a given year – and this to the extent that the constraining variables would allow. This is where the ritual of shadow-boxing comes to me as a great distraction. If you ask me, I’ll say that the time spent picking needless quarrels on the budget details would be better saved to ensure that citizens get value for every kobo spent!
I have looked at Budget 2016. I have no reason to see it as more of the same as some critics are wont to do. The intentions are certainly grand as the motif is fascinating. For the throng out there who see government as catalyst, the expansionary budget should resonate in a positive way. The truth however is that the 2016 Budget outlay is at best a tiny droplet in the ocean of the nation’s infrastructural needs. For instance, in June last year, this newspaper quoted Africa Infrastructure Country Diagnostic (AICD) 2011 Report as estimating that Nigeria required sustained spending of $14.2 billion per annum over the next decade in order to address the infrastructure challenge. That is some 45 percent of the entire 2016 Budget – to be spent exclusively for infrastructure upgrade alone! And this at a time we are celebrating 30 percent capital votes as great achievement! The newspaper also quoted former Finance Minister and Coordinator of the Economy, Ngozi Okonjo-Iweala as putting the sum needed for road upgrades, bridge repairs, the energy sector, hospitals and schools at a whopping N10.63 trillion ($67 billion). Again, if we compare with the entire 2016 Budget of N6.06 trillion; the stark reality of what we face comes very clear.
I do not deny the potential impact of a well structured budget intervention can make. By this I mean the direct impact of the upgrade of the infrastructure on the cost of doing business and the multiplier effects of the massive spending at this time. It is however a different matter to pretend that we are anywhere near the Eldorado when we are in fact a long way from home!
The above scenario comes to one basic truth: government’s role comes to a minor scratch given what is needed to turn things around. The crux of the challenge is how to meet the funding gap. In this, we certainly have a good idea of where to turn to help – the private sector. This is where the government needs to put more efforts.
Perhaps I need to make the distinction here: I do not here refer to the oft-touted portfolio investor who have long mastered the art of reaping without really sowing, the throng that is loudest in promoting and adorning sundry in-equities under the garb of liberalisation; the club ever so ready to hit the wires at the onset of trouble.
I am here talking here of genuine investors who truly appreciate and are willing to take advantage of the nation’s vast potentials to invest. Trust me: with the right ambience and incentives, they’ll come trooping in!
Finally, one thing which the budget will never address is the fuel crisis. Today, the crisis has not only reached the boiling point, it has metastasised to such an extent that the nation current chaffs under its debility. I refer here to the 40 percent of the entire forex outlay spent on fuel importation. Picture the difference it would make to the naira if we didn’t need to spend that amount on fuel importation. Can anyone imagine the other countless possibilities from that prospect? We need those kind of multipliers fast!
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