Sunday, December 27, 2015

Views on Nigeria’s 2016 Budget proposal

It is gratifying to note that President Muhammadu Buhari has eventually presented the 2016 proposal to the National Assembly. The president came across as someone who appreciates the enormity of the expectations of Nigerians from his government.  According to PMB, the budget seeks to stimulate the economy, making it more competitive by focusing on infrastructural development; delivering inclusive growth; and prioritizing the welfare of Nigerians.

I am fascinated by the following pledges made by the president in the appropriation bill: Home-grown public primary school feeding and free education for science, technology and education students in our tertiary institutions. Federal Government’s  plan to  collaborate with states and local governments to tackle the “chronic shortage’’ of teachers in public schools across the country by planning  to recruit, train and deploy 500,000 unemployed graduates and NCE holders to strengthen basic education, especially in rural areas. It is also commendable that FG plans to partner states and local governments to provide financial training and loans for market women, traders and artisans through cooperative societies. Laudable is also the FG’s commitment to job creation drive which will be private sector led. The president said his government will do that by encouraging a reduction in tax rates for smaller businesses as well as subsidised funding for priority sectors such as agriculture and solid minerals.

It is noteworthy that FG had earlier in the year ordered the employment of 10,000 policemen. All these shows that government is taking serious the issue of unemployment.

My worry about the budget is its late presentation as well as fluctuating benchmark. The $38 on which the budget is predicated has become grossly presumptuous as oil now sells for about $32 in international market. In the areas where FG wants to collaborate with the State and LGAs, were the supports of these tiers of government captured in the respective budget or is their support purely non-financial? It is heart-warming that the Senate President, Dr. Bukola Saraki has promised the cooperation of the legislature to ensuring that proper scrutiny of the budget is done and that thorough oversight of its implementation is conducted.

Going forward, I hope future budgets will be prepared taking into cognisance the provisions of the Fiscal Responsibility Act. Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) should be submitted to National Assembly (NASS) by September and budget needs to be submitted also in good time to enable NASS do a thorough study and passage. I still believe that PMB should have announced the removal of fuel subsidy rather than ordering the price to still be N87 per litre. This is one albatross the country can ill-afford to continue. In addition, FG needs to plug all the leakages and wastages in the system. He needs to show leadership by selling off most of the aircraft in the Presidential Air fleet. National Assembly should also put a hold on the proposed over N4b it intends to use in buying operational or official vehicles for the legislature. If they must buy, they should buy vehicles made or assembled in Nigeria. This will help conserve the scarce foreign exchange and reflate the economy.

Jide is the Executive Director of OJA Development Consult, Abuja.