Opinion
Budget Of Deceit And Self-Delusion – Sobowale
By Dele Sobowale
“The most obstinate illusions are ultimately broken by facts.”
Trevor Roper. VANGUARD BOOK OF QUOTATIONS, VBQ p 100.
“Budget of Continuity was based on a benchmark oil price of $60 per barrel, oil production of 2.3 mbpd…government projected a deficit of N1.91tn…
The revenue
performance is only 58 per cent of the 2019 budget’s target due to the
underperformance of both oil and non-oil revenue sources…Specifically oil
revenues were below target by 49 per cent as at June 2019.”
President Buhari, Budget 2020 presentation to the NASS,
October 8, 2019.
PREAMBLE
My first annual budget review for VANGUARD was done in
1989. That was thirty years ago and during the Babangida administration. If
there is one thing I find remarkable, it is the penchant by Nigerian governments
– military or civilian – to treat the annual budget, not as tool for economic
and social development, but primarily as propaganda piece for their own
political agenda.
Invariably, they have
around them individuals who, if they were not in government, would be among the
first to spot the fallacies underlying the budgets they publicly endorse.
Reading the comments made by leaders of the Peoples Democratic Party, PDP,
about Buhari’s budget, one wonders if they would say the same thing if it was
Atiku who released it. That shows how uniformly unpatriotic our politicians
are!!
How often have we heard the statement “the budget is good, we
only have to worry about implementation” as if a sound budget can ever be
divorced from the plans to execute it. Highly respected pillars of Nigerian
society have uttered that drivel so many times even with demonstrably unsound
budgets one wonders if they wish Nigeria well. To be quite candid, in all
those thirty years, I have never read a single budget which was good waiting
only for equally great execution to move Nigeria forward. Nigerians have been
subjected to varying degrees of failed budgets leading us nowhere; or worse
still, leading us to ruin.
Incidentally, budgets under military regimes – Gowon,
Murtala, Obasanjo, Babangida, Abacha and Abubakar – were better prepared and
more faithfully executed than what we have experienced under President Shehu
Shagari and since 1999. All our men in uniform, without exception, were
certainly running corrupt governments. But, they implemented their budgets
better and were actually less corrupt than the civilians we have elected.
Invariably, they started with a series of Budget Thrusts for the year in question, thereby providing keen observers criteria for monitoring implementation. By contrast, Buhari’s budgets have been nothing more than tropes of words without clearly stated objectives and so no handle for assessment of performance. It cannot be otherwise. Just take a look at the people preparing the budgets and you must shed tears for Nigeria.
That is the worst
cabinet ever assembled by any Head of State. If you don’t believe me, ask my
colleague Eric Teniola to provide the list of cabinet members of all our
national leaders.
The 2016 to 2020 budgets under President Buhari have been the
worst formulated and the worst executed. In fact, this is the first government
lasting more than four years which had racked up such a dismal record of
managing budgets. Buhari’s statements, which were rendered in “cut-and-paste
fashion” above, regarding the performance of the 2019 budget represent a
summary of the four annual budgets he had presented to the National Assembly,
NASS, and which had actually been passed with only slight amendments but which
had got us nowhere.
They have all failed because the President does not
realise that a budget is a promise to the people which he must keep. Revenue
shortfall of 49 per cent amounts to betrayal of hope and trust.
STARTING ON THE WRONG FOOT; STAYING ON THE WRONG TRACK
“Morning shows the day” according to an old adage.
The disaster of the 2020 Budget actually had its
origins in 2015. The first three appointments every modern Head of Government
makes in today’s global village are: the Ministers for Defence, Finance and
External Affairs. Those are the people other countries appraise most
critically. And, the appointments are made very quickly after elections are
over. Bearing in mind that “A week is a long time in politics” (Harold Wilson,
British Prime Minister 1970s). Buhari waiting for five months to make
those key appointments had already sent a signal to the global community; and
not a good one.
To then turn around
and hand the economy to people totally unknown in global financial institutions
for the five months sent another signal; a worse one. When he finally made the
selection of Minister of Finance, it was to please a political loyalist instead
of picking some one with network in the international financial community. Mrs
Adeosun might be a good accountant; but, she is not and cannot be an excellent
Finance Minister. The results showed very quickly. A recession followed in 2016.
That was not the first time Buhari would hand the
economy to a novice. In 1984, he appointed Dr Onaolapo Soleye, a protégé of
former General Olusegun Obasanjo as Finance Minister. A recession followed. He
has again appointed someone unknown as Minister of Finance and Budget. What
will follow?
The government started on the wrong foot in 2015. The
economy was handed to an Economic Management Team, EMT, with no known Economist
in their midst. We know what followed.
THE 2019 BUDGET FAILURE PREDICTED
“[Government] promises, like pie-crusts, are made to be
broken.”
Jonathan Swift, 1667-1745. VBQ p 203.
Buhari spoke as if the dismal performance this year
came as surprise instead of another annual accident waiting to happen. The 2019
budget is only the latest in a string of four budgets based entirely on deceit
of Nigerians and self-delusion by this government. If ever there was a Nigerian
government which had operated on fantasy instead of facts in its preparation of
annual budgets, the Buhari administration is it. Below are comments made on the
2019 Budget when it was first released by the FG. In an article titled BUDGET
2019 DEAD BEFORE ARRIVAL, the following observations were made.
“I was getting ready to throw in the towel on writing about
the Buhari administration and the absolute neglect of all the measures that
would make Nigeria a great economic power and reverse the trend towards deeper
poverty and deprivation for our people. Make no mistake about it, the average
Nigerian would continue to get poorer as long as we have Buhari and his
economic advisers in government.”
It was clear that the FG had again repeated the same mistake
made when preparing the first three budgets. They just never seem to learn from
their past errors. Crude oil revenue was based on exporting 2.3 million barrels
per day. That is a figure Nigeria had not achieved in more than seven years.
Furthermore, the turbulence in the global crude oil markets precluded any
possibility that Nigeria would produce and sell that quantity to the world.
Yet, the FG went ahead and based the 2019 budget on it. The NASS, increasingly
a collection of jesters, actually sat, considered and passed a budget based on
that travesty. Buhari has now admitted that his government was absolutely wrong
in its quantity estimates for 2019.
THE 2020 BUDGET AND THE NIGERIAN SHIP OF FOOLS.
“There is a sucker [fool] born every minute.” PT Barnum,
1810-1891.
America’s original circus master was the first to realise
that even in God’s own country, a fool is born every sixty seconds. If it takes
a whole minute to bring a fool into the world in the USA, then Nigeria must be
producing them at one per second. And some of them are in the NASS. Otherwise,
it is incomprehensible how the lawmakers could annually waste their time and
ours considering one atrocious budget after another. This is the fourth one.
Let us start by asking a simple question.
What has the government done to correct the recurrent error
in the 2020 budget? Something worse happened as a matter of fact. On October 1,
President Buhari announced to the world that he had ordered the release of N600bn for capital projects for 2019 in the next three
months. That sum represents only 22 per cent of the capital budget for the
entire year. It also means that 78 per cent of capital appropriation for this
year will not be forthcoming. That was bad enough. What made the announcement
worse was the fact that the Nigerian President had pronounced a major tragedy
as if it was an outstanding triumph. Only in Africa in general and Nigeria in
particular can a President make such a statement and remain unruffled. Buhari
needs not worry. He rules the most docile and the largest bunch of suckers in
the world – including the NASS.
The 2020 Budget is worse in all respects than the 2019
budget which is already a disaster. One must wonder what Buhari and his
advisers were thinking of and
what the leaders of the NASS are doing. All the evidence required for this
budget to be tossed into the garbage can is there. Granted, the Buhari
administration is one in which the right hand does not often know what the left
is doing. But, can that excuse the absurdities we are witnessing?
It is incomprehensible why Buhari a former Minister of
Petroleum Resources in the early days of the Organisation of Petroleum
Exporting Countries, OPEC, could forget that the cartel establishes production
quotas for members from time to time. He cannot possibly pretend to have
forgotten that the members frown at any member exceeding its quota. He
certainly must be aware that OPEC had already signalled the intention to impose
fresh quotas which will start soon and continue for a good part of 2020. Last
week, OPEC announced new quotas under which Nigeria is allowed only 1.77mbpd pf
crude oil. Even if the budget was already prepared based on 2.18mbpd before the
announcement, the situation has changed significantly and the budget is no
longer tenable. Instead of stubbornly going forward to present a budget fit
only for the dust bin, Buhari should have asked for more time to present a more
realistic budget for 2020.
On at least two different occasions during this year, I
have made the point that the 2019 budget will never be implemented. Buhari has
finally agreed with me in more ways than one. Space does not permit me to
reveal more. But, two recent developments call for mention.
SIP AND THE MANY LIES OF GOVERNMENT.
“Every government is run by liars and nothing they say
should be believed.”
I F Stone, US Journalist 1907-1989. VBQ p 80.
The Social Investment or Intervention Programme, SIP,
introduced by Buhari and advertised as his legacy project was designed to
alleviate poverty. The objective was clear and noble. But, it suffered from the
same malady as every aspect of Buhari’s economic programme. It was
ill-conceived and badly executed by those in charge. Right from the start, the
operators of the SIP placed premium on propaganda and falsehood instead of
competence and accountability. If ever the programme is probed, it will turn
out to be one of the biggest frauds in Nigerian history.
As most readers would recollect, SIP was allocated
N500bn in the 2016, 2017 and 2018 budgets; the figure was reduced to N350bn in
the 2019 budget. Suddenly, the SIP has been slashed to N30bn in the 2020
budget. Obviously, the poor have now been abandoned – because N30bn cannot
cover the administrative costs. Gone now are the School Feeding Programme and
the N5000 per month promised to 5 million Nigerians in the quixotic effort to
reduce poverty in Nigeria by giving N5000 per month to the poor. Most of the
funds went into the pockets of rich officials managing the programme for two
cardinal reasons.
First, the programme was based on wrong arithmetic.
Even a good primary five pupil should have been able to figure out that N5000,
at official rate of N300/US$1 comes to 16 dollars per month and just a little
over half a dollar a day. That is clearly less than the $2 per day which is the
global benchmark for poverty. It would have been bad enough if the poor
received the money regularly. There is ample evidence that most of the intended
recipients never got them; or, at least not monthly. The same can be said
about the School Feeding Programme – which was scandalous. Poverty was certainly
not being eliminated. And in 2018 Nigerians were jolted by several reports from
global study groups which declared Nigeria the poverty capital of the world.
The official reaction was one of denial. The reports,
we were told, were meant to discredit the FG. Nigerians were asked to disregard
them. But, when the President’s wife announced that the SIP programme was a
fraud, it was no longer possible for Buhari to ignore people like me who had
issued the same warning several times.
Second the N500bn allocation to SIP in the first three
years and N350bn in the fourth year were ill-advised. No government anywhere in
the world allocates more funds to an untested programme than to security,
power, infrastructure, health and transport combined. The sectors that grow the
economy were deliberately under-funded while a new project, managed by novices
was obver-funded. It was an emotional not a rational allocation of our
resources. Unfortunately for Nigerians, neither the Executive branch nor the
NASS that inadequate funding of programmes will result in low Gross Domestic
Product, GDP, growth. And as long as the GDP grows less than the population
Nigeria will increase the number of people living in poverty. Buhari was
allowed to reduce capital expenditure to the barest minimum in the four years,
2016 to 2019, and the results have been: 2016 (-1.4%), 2017 (0.8%), 2018
(1.98%); projections for 2019 hover around 1.9%. Each year had brought its own
harvest of people dropping below the poverty line.
EXPECT NOTHING FROM THE 2020 BUDGET
“A man cannot gradually [or suddenly] enlarge his mind as he
does his house.”
Alexis De Tocqueville, 1805-1859.
SIP was a colossal waste of funds – almost criminal.
That it took Buhari four years to realise that he had been wasting our resources
should frighten us. The President who admitted failure on October1 and made if
appear as success; who should know that OPEC has pegged our crude oil output to
1.77mbpd but still goes ahead to present a budget based on 2.1mbpd cannot lead
us anywhere else but into economic disaster.
Like all the previous Buhari administration budgets,
this one will also never be implemented. Nations are not run on fairy tales
read by their leaders.
LAST LINE
The Presidential Economic Advisory Council, PEAC,
members might as well go home. They will get nothing but brief from their
assignment. President Buhati wants advisers who will launder the government’s
image; not real advisers. Any man who evades the obvious truth and seeks
shelter under false estimates does not need honest people advising him.
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