Wednesday, June 10, 2015

Crucial Issues Before President Buhari on Nigeria’s 2015 Budget

An Abuja-based Development Consultant and Executive Director, OJA Development Consult, Abuja, Jide Ojo, in a note to The Guardian, titled: “Crucial Issues Before President Buhari on Nigeria’s 2015 Budget”, noted that there are many challenges with the implementation of the 2015 budget.
“The issue is the over reliance on oil revenue. The monoculture of Nigeria’s economy is having negative impact on the country. There is the challenge of dwindling oil revenue in the international market; oil theft with about 100,000 barrels per day being lost to illegal bunkering; lack of accountability and transparency in the oil and gas sector of the economy; the non-passage of the Petroleum Industry Bill (though the House of Representatives passed it on Thursday, May 28, 2015, there was no concurrence of the Senate).
“The low revenue base of the country to finance the budget has resulted in a situation where over 20 of the 36 states of Nigeria could no longer pay salaries of their workforce as and when due. This is because of the drastic reduction in the federal allocation to the states and local government. Even the Federal Government has had to borrow to pay salaries of its workers.
“Governments at all levels are most likely not going to be able to implement both the recurrent and capital expenditure of their budget as passed by their respective legislative arms. It is therefore incumbent on the government to prioritise its programmes and projects and take on those within its lean resources.
“The new administration of President Muhammadu Buhari will also do well to run a lean government be ensuring that the extant 42 member cabinet is trimmed down considerably within constitutional provision. There is a need to cut down on the number of political aides, presidential air fleet, State House budget. The same should apply to the governors and local government chairmen,” Ojo said.
The expert also advised the new government to roll out its economic blue print so that investors can have a clear direction of the government and how they can key into it, as well as widen its non-oil income by imposing tax on some luxury items like exotic cars, private jets, foreign wines and spirits (alcoholic drinks like champagne).
“Government should remove subsidy on petroleum products and allow forces of demand and supply to determine the price. More public, private partnerships need to be encouraged. Many of the current white elephants projects initiated by the outgone administrations should be discontinued and probably sold off and the proceeds used to fund some key infrastructural projects.
“The turnaround maintenance of our four petrol refineries should be of utmost priorities and if this cannot be achieved, they should be sold off. Government should also decisively deal with the challenge of oil theft and willful vandalism of oil and gas pipelines.
Above all, early submission and passage of the budget is important and should be the new culture. Likewise is proper implementation of the yearly budgets.
This is an excerpt from The Guardian interview titled "Many troubles of 2015 fiscal plan for new govt"