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Appraisal… #Budget 2016: PDP’s lazy analysis

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In from Stanley Azuakola . . .

The Peoples Democratic Party (PDP) wants to be taken seriously as a credible opposition. But the party is lazy and unwilling to do the hard work required of a party that can be a counterbalance to the ruling All Progressives Congress (APC).

The party’s response to the 2016 budget presented by President Muhammadu Buhari on Tuesday is worth another look just for its sheer shallowness.

If Nigerians were hoping that the PDP would use its budget rebuttal statement to relay a different vision; a well thought out alternative narrative of the future different from that espoused by President Buhari, then the statement signed by Olisa Metuh proved that the opposition party is not ready for leadership.

Olisa Metuh said in his statement that the N6.8 trillion budget proposed by President Muhammadu Buhari is “a big fraud and executive conspiracy tailored towards mortgaging the future of the nation”. Why? Because the government intends to borrow N2.2 trillion to fund the budget.

In the 2015 budget, the past PDP government put borrowing at N1.04 trillion (minus the extra half a trillion that had to be borrowed to pay marketers), making a total debt of over N1.6 trillion. For 2016, Buhari has said Nigeria will borrow N2.22 trillion. The PDP was unable to explain why the debt incurred under the PDP government was not a ‘fraud’ or ‘conspiracy’, but the one projected for 2016 is.

President Buhari argued in his speech that the deficit, which is equivalent to 2.16% of Nigeria’s GDP, will take Nigeria’s overall debt profile to 14% of its GDP. This is still a very manageable figure. South Africa’s debt to GDP ratio was 39% in 2014; Ghana’s was 67%; Brazil was 59% and China was 41%.

If the PDP made an argument that it is not satisfied with using debt to GDP ratio as an index but prefers debt to revenue ratio, it may have made some sense because Nigeria is not generating enough revenue. However the PDP basically lamented about debt and left it at that, simply too lazy to make a proper argument.

“We have it on good authority that this is the first in the series of APC borrowings which would leave the future generation of Nigerians under the burden of huge debts after four years,” the PDP said.

Read also: Buhari: Capital expenditure to gulp 30% of 2016 budget

On whose good authority did the PDP discover this please? That’s another PDP allegation without any proof.

Hear Metuh again: “There has never been any known economy in the world where government deliberately mortgages the future of its nation by borrowing excessively to finance partisan interests while hiding under bogus welfare programmes. This is moreso important as the APC in reeling out their bogus campaign promises never informed Nigerians that they would mortgage their future through excessive borrowing.”

As we have shown above, Nigeria’s borrowing is not excessive. More advanced economies and emerging economies have higher debt to GDP ratio. But even more confusing is the argument by Metuh that the APC is trying to finance “partisan interests”. At no point has the APC or Buhari claimed that its promises are for APC states alone. Buhari and the APC campaigned on these so-called “bogus welfare programs” and Nigerians gave them the mandate. To show the bad faith in the PDP’s statement, a month ago, some of its lawmakers tried to amend a motion in the senate to compel the FG to start paying N5,000 to unemployed graduates. Now, the president has announced a budget to treat some of those welfare policies, and the PDP calls it bogus.

PDP further said that the projects listed by the President are “phantom capital projects” to be used “as cover and conduit to syphon funds”. Evidence? None.

Then this: “By all standards, the 2016 budget, the first major economic policy outing of this government, is completely unrealistic and duplicitously embellished with impractical predications, a development that confirms fears by economy watchers and investors that this administration is obviously ill-equipped for governance.”

It is possible that the PDP is correct and the budget is unrealistic and embellished. But the PDP has to tell us how it arrived at that conclusion. The President stated clearly how he intends to fund his budget, his benchmarks and projections, what he intends to use the borrowing for, and gave several other crucial details which will be queried and analysed in the coming days. Which of them is impractical and why? Is it the benchmark of $38 per barrel? Or the projected 2.2 million barrels per day oil production or the exchange rate of N197 to a dollar?
The PDP could have waited to think it through and come up with solid takedowns, but Metuh felt that being an opposition spokesman means speaking first and thinking later.

Metuh said something else which could only mean that he did not read the president’s speech.

You may also like: 2016 Budget: N2.22trn deficit’ll mortgage Nigeria’s future – PDP

PDP and Metuh need to tell us where President Buhari endorsed devaluation of the naira in the more than 3,000 words of the speech. Such an endorsement is simply not in that speech. The closest the president came was when he said, “I am however assured by the Governor of Central Bank that the Bank is currently fine-tuning its foreign exchange management to introduce some flexibility and encourage additional inflow of foreign currency to help ease the pressure.”

How is that an “official endorsement?”

Finally, and this may be the most ridiculous of all. Metuh suggested that in future there is a “need to regulate campaign promises so that we will not end up with a government that promises to climb Mount Everest with bare hands and end up mortgaging our future with orchestrated borrowings.”

How can promises be regulated? Who regulates it? Does the PDP want a campaign regulation council perhaps to be funded by taxpayers? ‘Regulation of promises’ in the real sense only occurs when one party brings an alternate argument with facts, figures and ideas, which disputes the claims of the other party. When Nigerians see through the false claims of one of the parties based on a superior argument, the party making the false claims will have no option than to refine or drop them. Unfortunately the PDP did not provide that alternate argument, and with this statement, it shows that it is still not ready to provide that alternative. That’s a pity.

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