The much expected content of the 2016 Appropriation Bill was unveiled by President Muhammadu Buhari on Tuesday, December 22, 2015. It is entitled, “Budget of Change.” Expectedly, allocation to infrastructure, according to the figures presented, carried a huge sum of N433.4bn and is followed by education with N369.6bn. Other important sectoral allocations go to defence, health and transport in that order. The total budget estimate is approximately N6.08tn and the nation will have to borrow N2.22tn, which is almost one-third of the total budget or 14 per cent of the Gross Domestic Product. It is noteworthy that recurrent expenditure still carries a large proportion of the budget though there is significant improvement in the proposed capital budget.
All present comments on the budget are postscript and are only useful to the National Assembly in the process of enactment of authorisation to implement the budget. It is within this context that this piece is situated.
The budget actually contains an intention of the government to fulfil the party manifesto. For example, there are promises to transfer cash to poor Nigerians in various forms including provision of meals for primary school pupils and provision of soft loans to micro businesses through their cooperative societies. The provision of meals is a welfare programme that is expected not only to provide succour to the masses but to also endear the government or the party in the minds of the people as a caring government. The soft loan on the other hand should enhance employment generation, productivity and incomes of the micro businesses through availability of funds. This is therefore to complement, in the employment sphere, the 500,000 teaching jobs intended to be created within the budget year.
Just like previous years’ budgets, the 2016 budget is viewed by many as the best thing to happen under the current economic hardship. Nigeria’s budgets have always been so described but the outcomes of implementation always betray the trust. The raison d’être for poor implementation performance could be tied to the fact that the public and even analysts are often carried away with the expected positive outcomes with little emphasis on caution. Of course, that is what the Ministers of Finance and Budget and Planning would want to read or hear. There is no doubt however, that the present budget formulators have put in some safety valves such as looking towards non-oil sector proceeds (N1.45bn) for much of the funds. In fact, the country should start discounting the use of oil price as benchmark for the annual budgets by growing the non-oil sector. If the prediction of the International Monetary Fund that oil price will decline to $20 per barrel in 2016, and, the economy is able to achieve high budget performance, then using oil price benchmark will be irrelevant in formulating 2017 budget. Actually, political manipulations and cost-benefit analysis of production of alternative oil resources, including production of shale oil will not allow the international crude oil price to get down to $20 per barrel. Notwithstanding, $30 per barrel as benchmark looks more realistic than $38 per barrel used for the 2016 budget.
The huge allocation of N433.4bn to the Ministry of Power, Works and Housing has been hailed by some analysts and such commendation is not unfounded given what development of infrastructure will do to the economy in terms of revving up industrial productivity and consequently, employment. The same goes for allocations to education and transport. But, when we realised that the MPWH is a three-in-one ministry with a foreman (Babatunde Fashola) in charge, the allocation is grossly inadequate. However, one expects that the ministry and that of Transportation will benefit greatly from the external loans or credit and the projects so financed will be those that can pay back over time.
The development of power generation and distribution, roads and rail transport system are fundamental to the achievement of an industrial Nigeria. The projects in these sectors require expertise from foreign countries and any variant of public-private partnership such as Built-Operate and Transfer can be employed to execute the projects. For example, the Chinese government and firms are providing rail transport super-highway in southern African region in this manner and such assistance can be sought from China that is seeking investment avenues in Africa and other developing countries for its own continuous relevance in world politics. For quality job, the government of China must be involved in a bilateral agreement just like any other country to be involved in project execution for Nigeria. The same modus operandi can be adopted for construction of major highways with introduction of toll gates as user charges to recover the investments and for future maintenance of the roads and rails.
In the area of power generation, a multilateral agreement is essential not only for competition among countries to be involved but also because of variety of sources of electricity generation that must be adopted. Electricity generation must be diversified based on availability of major raw materials such as water, gas, coal, solar, wind and even nuclear sources. This is the practice all over the industrial economies. It is futile for the Federal Government to commit itself to solely providing electricity for the entire country. States must be encouraged to key into electricity production through enabling laws and moral support while the Federal Government itself needs to give priority to states with industrial base/potential and the Federal Capital Territory in the first instance and gradually take on other states that are financially handicapped. What is being canvassed here is a gradual approach to lightening up Nigeria, given the available resources and collaboration between federal and state governments with expert support from foreign governments. If electricity production is privatised and government allows tested foreign companies to invest in the sector as was done for the telecommunications sub-sector, energy production can improve significantly by the end of 2016. Albeit, in reaching agreements on all these partnerships, the element of training Nigerians, locally and abroad, to take over the business of maintenance in future must be put in place and adhered to.
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