In December, President Mohammadu Buhari presented a N6.08 trillion budget for 2016 with recurrent expenditure of N2.65 trillion and capital expenditure of N1.8 trillion.
The budget, which is to be driven by a oil benchmark of $38 per barrel, is based on projected revenue of N3.86 trillion and deficit of N2.22 trillion with the latter set to be financed through domestic borrowing of N984 billion, and external borrowing of N900 billion, totaling N1.84 trillion.
But some economic experts, while hailing the budget proposal, expressed doubts over some aspects of the document, especially the ability of the government to generate the projected fund to finance the budget.
This is because Buhari said during the presentation of the budget that, it is aimed at vamping infrastructure with emphasis on prudent spending.
He also highlighted that the budget will deal with sensitive issues like raising non-oil revenue through economic diversification, enhancing the fight against corruption, stimulate economic growth, increase competitiveness and improve human capital development.
The President went further to say that the cumulative achievement of the 2016 budget will gear towards reducing youth unemployment and ensuring all-inclusive economy.
Buhari pledged substantial expenditure on education, health and security, while also promising that tax rates for small businesses will be lowered, saying further that priority sectors like agriculture and solid minerals will receive subsidy.
Without doubt, the President merely reeled out what a national budget should achieve in an economy if well implemented. He said the Federal Government intended to increase capital expenditure to more than 30% from initial 15%, saying infrastructure spending is expected to help create jobs in key sectors like the agriculture and mining.
After highlighting the economic challenges that confronted the country due to the fall in oil prices, the President vowed that the budget would cut wastes from government spendings and its funds would only be used for public good.
But the essence of a budget is to stimulate economic growth and address infrastructural needs in key sectors to enhance stability, security and national integration. The economy is either the beneficiary or the loser in every budget year and the 2016 budget won’t be an exception.
Apart from the challenges of generating the money to fund the budget, the budget, from close observation, is replete with some frivolous allocations, which may make it difficult to address economic deficiencies. For instance, the vice president’s office has more money allocated to it than what each of the federal polytechnics is getting for similar purpose.
While N4,906,822 was proposed to be spent on books by Mr. Osinbajo, the total allocation for books for 11 out of 22 federal polytechnics, which actually have book allocations, was a mere N3,832,038. That is an obvious case of misplaced priority since quality education will stem the process of economic growth.
According to an online portal, there are also the spurious expenses in the maintenance of president’s guest house and villa.
The general renovation of Aso Rock Guest House was proposed to cost N387, 980, 200, just as furnishing the rooms in the Guest House was put at N45million. We are not told when the existing furniture in the facility was procured and why there is need to change them now.
Furthermore, a whopping N3.91 billion was earmarked for the annual routine maintenance of villa facilities. A breakdown of this amount shows that the government plans to spend N10.72 million daily on routine maintenance. This amount was exclusive of the N278, 041,172 proposed for villa office and residential maintenance.
Maybe the most spurious was the amount budgeted for Aso Rock rent. The president proposed a whooping N22, 321,880 budgeted for residential rent at the State House. It is unclear whom the presidency is paying the rent to.
But the economy that the budget should target to revamp has not fared better, as virtually all areas of the economy is experiencing crunch. This is even as some experts have come to the defence of the budget, saying its passage has taking a long time.
Another issue is the fall in oil price, which has also affected the implementation of the budget. The crude oil revenue is dwindling very fast and the forecast is that it will dwindle further. Judging by the revenue the government collected since June up to date, the revenue has dwindled and allocation to states has also dwindled.
On that basis, Nigerians may not know how realistic it is that government is going to meet the revenue target, given that the revenue from crude oil sales is less than N1 trillion, and then the non-oil revenue is about N1.5 trillion.
Then the balance, which is going to come from budget deficit, is the very worrisome aspect because N1.5 trillion is projected as revenue from independent sources are not stated. That was because government intends strategies to plug some corruption holes and expectedly realize revenue from that. So the realization of the amount appears to be subjective if the holes are not plugged eventually.
Also, another doubt is the projected N350 billion to be realized from funds that will be recovered from corrupt politicians. This is uncertain though.
On the basis of the above and going by the fact that the president is yet to append his signature to the amended budget presented to him by the National Assembly, it is obvious that the economy will be the worst hit.
But there can still be hope. The president must sign the budget as quickly as possible and also revisit some of the provisions in the paper. He should not contradict his presentation speech of prudent spending with some of the amounts earmarked for recurrent projects. The first quarter of 2016 has gone without the projected. The delay is no doubt adversely affecting business entrepreneurs. State governments are also being affected indirectly because of certain federal projects in such states meant to enhance both federal and state economy. We are therefore, calling on President Buhari to accelerate the signing of the budget and not to play politics with the wellbeing of the citizens.