Some senators, on Tuesday, described the budget estimates presented by President Muhammadu Buhari as “unreliable and unrealistic.”
Chairman of South East Caucus of the Senate, Senator Enyinnaya Abaribe, described the budget as “fictitious, imaginary and dead on arrival.” His position was backed by Senator Joshua Lidani who described it as “wishful thinking.”
Senator Ben Murray Bruce, said the annual fiscal estimate of the Federal Government is “a budget of active imagination.”
The positions expressed by the senators did not go down well with Senator Ahmed Lawan. He was uncomfortable with Abaribe’s description of the budget as “a fictitious” fiscal document. He requested the leave of the Senate to urge Abaribe to withdraw the “derogatory” word.
Lawan retorted: “You cannot describe the budget presented by Mr. President to a joint session of the National Assembly as fictitious document.”
Rather than withdraw the “offensive”, word, Abaribe added that if the word “fictitious” is unacceptable, “I withdraw it and rather say that the budget is “imaginary and unreliable.”
The senators expressed these divergent views when the Red Chamber kicked off the consideration of the general principles and second reading of the 2018 budget as contained in a Bill for an act to authorize the issue from the Consolidated Revenue Fund of the Federation the total sum of N8,612,236,953,214 only .
Of the amount, N456,458,654,074 only is for statutory transfers, N2,233,835,365,699 only is for debt service, N3,494,277,820,219 is for recurrent (non debt) expenditure while the sum of N2,427,665,113,222 is for contribution to the development fund for capital expenditure for the year ending on the 31st day of December, 2018.
Lawan, who gave the overview of the budget noted that in keeping with the administration’s policy, 30.8 per cent (N2,652 trillion) of the aggregate expenditure was allocated to capital budget.
He said that the fiscal operations will result in a deficit of N2,005 trillion or 1.77% GDP. He reminded his colleagues that the deficit will be partly financed by new borrowing estimated at N1.699 trillion..
While 50 per cent of the borrowing will be sourced externally, the balance will be sourced domestically, and the balance of the deficit of N306 billion is to be financed from the proceeds of privatization of some non oil assets by the Bureau of Public Enterprises (BPE).
The lawmaker also reminded his colleagues that the budget was predicated on the following assumptions: Oil price bench mark $45 per barrel; oil production estimate of 2.3 million barrel per day; exchange rate of N305/US$; real GDP growth of 3.4% and inflation rate of 12.4%.
Lawan had barely concluded his overview of the budget estimate, when Abaribe took the floor. He said: “The 2018 budget is designed to consolidate on the achievement of 2016-2017 budgets. What was done in in 2017 when less than 15 per cent of that budget was released. Nothing was done. That is why I call it fictitious. I withdraw the word fictitious and say that it is totally imaginary. Nothing was done in 2017. That is fact that we all know.
“As at last week, the total receivables that government got was one tenth of what was stated publicly. Instead of the budget in 2017 of more than N800billion to be received, what was received was N150 billion. In what sense will this 2018 budget be predicated on an assumption that the facts have already been destroyed. You are assuming N11 trillion yet you are getting less than N1trilion.
“This is imaginary. We beg this government to be very specific in the indications of the assumptions underlining this budget. The assumptions are totally wrong and totally off the mark.”
Senator Joshua Lidani, a member of the Peoples Democratic Party (PDP) from Gombe State, on his own said that the performance of the 2017 budget especially as it relates to capital performance is very abysmal.
He stated: “It is expected that by the end of the year, only 50 per cent of the capital fund would have been released. It is not certain that that amount would be released. So we end up having budget that has performed below expectation. Unless we get the 2017 budget analyzed, what went wrong, we will be building the 2018 budget on a very weak foundation.
“Non oil revenue fell by 74 per cent, which means non oil revenue only 36% was realized from non oil revenue. This is very disturbing and alarming indeed. Especially when you consider the fact that the 2018 budget is predicated heavily on the non oil revenue.
“The no-noil revenue is supposed to contribute N4.165 trillion which is almost about 50 per cent of the N8.6 trillion budget. If something goes wrong, and we don’t realize this N4.165 trillion, it means the budget will be as good as dead. This budget is wishful thinking if we don’t get the fundamentals right, we are going to have a budget that will perform below expectation.”
Senator Bruce on his part said: “We have downgraded our economy and the reason we are downgraded is we cannot meet our revenue projections is understood that this is a budget of consolidation; I would rather describe it as a budget of active imagination.
“If you look at the budget from 1960 to the present, you have agencies that were designed for 1960, agencies that were designed for the Nigerian civil war, agencies that were designed to suit some certain conditions in life. 60 years later, those agencies still exist in the budget. If you look at the budget, you will see some agencies, they get recurrent expenditure, they pay salaries, they get houses, computers, cars but they have no money to do any work. No money to do any work, we pay salaries. Some agencies are so bloated it defies logic but these agencies exist.. So, we have 2.4 million people consuming 60 per cent of the recurrent expenditure of Nigeria, it doesn’t make any sense.
“I called President Obasanjo on phone two days ago and he said to me; the National Orientation Agency was necessary when we had no political parties. What is the value of the National Orientation Agency in today’s world for instance? Yet billions of Naira is spent in that agency.
“Let us look at agencies that make no sense. FRCN sell it to the staff. FRCN has 8, 000 workers sell it to them. Sell NTA to the staff. Voice of Nigeria, who listens to Voice of Nigeria? Sell it. If the staff wants to buy, let them buy it. Set up a cooperative like Awolowo did, sell it to them. If we spend 71% on recurrent expenditure, we will never get out of this predicament we find ourselves.
“I sent a letter to the Minister of Transport and I asked him to send us the contract he has with the Chinese. Let’s say we spend 10 billion dollars with the Chinese and they give us a loan what percentage of that money is spent in the local economy? How many Nigerians are employed? Which steel product are we producing locally? The last time I checked, rail lines were produced 300, 400 years ago. It’s not rocket science, we have Ajaokuta steel. So if we have the capability of producing steel or we have the capability in slow motion of making this work as Nigerians, we don’t need to borrow $10 billion from the Chinese and then give them back $10 billion, what do we benefit in our economy?
“The United Nations projected that in February 2018, Nigeria will have more people in poverty than in India. We have a population of 180 million people, India has 1.3 billion. Then, if we are going to have more people in poverty than India, then we have to create jobs. Once we create jobs we can then export our Naira to China, to India or some other place.”
Senator Gbenga Ashafa on his part, noted that the 2018 budget cannot be effectively discussed without going back to previous budgets and considering how the budgets performed.
Ashafa said that the major problem of the country’s budgets had been poor funding. He noted that the budget could be big but without money to fund it, it makes no sense.
The senator stated for instance that only N700 million had been released from the budget of Ministry Transportation out of N11.4 billion.
Ashafa prayed the Senate to work to ensure that enough funds are always released to fund the budget in the interest of development of the country. He also sought a speedier procurement process.
Deputy Senate President, Ike Ekweremadu who presided, agreed that “without the revenue we will have no money to do the expenditure”.
He said: “We must point out in the course of the debate how we will educe the deficit. Ben Bruce has told us that some government agencies that should not be in existence anymore including the Voice of Nigeria (VON) which nobody is listening to. We need to point out some of these MDAs that are of no consequence or adding no value in Nigeria so that we don’t keep spending money on them because that way we will be able to reduce the ratio between the capital and the recurrent and of course reduce the deficit.
“I hope government will listen to such exposure and be able to do away with such agencies. If the government fails to remove those agencies from our budget we have a responsibility to Nigerians to bring bills in order to repeal the laws setting up those agencies and stop wastage of our resources.”
By Ehisuan Odia…
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