The 2014 budget proposal deserves the seal as the gold standard for pork barrel spending. It is a budget of insensitivity carefully packaged with impunity. The drain pipe to siphon funds from the nation’s coffers used to be subsidy payments and outright conversion. The Occupy Nigeria revolt changed all that, as with the street creed – “Naija no dey carry last”, there has to be another way. That way has always been there in the form of “envelope budgeting”. We have seen a new phenom as inflated budget assumed an art form in the 2014 proposal. Seems this government is in a race to invent new low standards in everything.
This budget promises to cement our reputation as a lost cause in greed and avarice the world over – It is totally sickening. Nigeria’s public sector have mastered the cons of envelope budgeting, never again will it serve this country’s interest as long as it is used. Under this method, costs for recurrent expenditure continues to skyrocket unabated to the detriment of capital expenditure. This in part is due to greed, corruption, cronyism and shortsightedness. We don’t even have the money they plan to spend!
We are in a regime of heavy deficits, escalating external and domestic debts, serious balance of trade issues and precipitous drop in Foreign Direct Investments (FDI) due to high levels of insecurity. For starters, crude oil production forecast of 2.39 million barrels a day in the 2014 budget is grossly over-estimated and fraudulent. It is fraudulent because Nigeria has not produced crude oil near the 2 million mark throughout 2013, Nigeria averaged less than 2 million barrels of crude oil production daily compared to the 2.53 million barrels the government had predicted. About 400,000 barrels of crude gets stolen on daily basis most often under armed protection and nothing on ground suggests any change.
Do you wonder who prepares the budget? Civil servants do! Politicians do not prepare budgets. That is why I have written before on this platform that the various ministries, departments and agencies (MDA’s) are silos of corruption. “Who are those making the submissions for appropriation of funds? Who disburses the funds? It would be near impossible for politicians to engage in corruption if public servants refuse to be used as means to corrupt ends or if they decline to be willing accomplices in corrupt schemes. Politicians cannot and do not act alone. They act in concert with civil servants. Procedurally, politicians cannot initiate transactions on behalf of government and complete them without public servants. The officers in charge of public till are not politicians but civil servants, no stealing or conversion can take place without their active connivance.” The 2014 budget proposal allocated 76% to recurrent expenditure and a paltry 24% to capital expenditure.
What this means is that three quarters of the budget goes to keeping the government structure and the bureaucracy running while projects like schools, hospitals, roads, water, electricity etc takes just one quarter. In essence, do not expect any major transformation in Nigeria yet, there is money to pay salaries, send 800 people as advance party to cheer Mr. Jonathan at the United Nations meet and buy a few Presidential jets. Infrastructural projects on power generation, roads, healthcare can wait.
Why is this so? They believe the people must wait. Their credo is; life is “turn by turn. Wait for your turn to chop and if you like; try to save the rain forest if you alone can get it done. Those who are concerned with N2million computers did not understand the corruption ladder in the ministries, departments and agencies. The permanent secretaries, registrars and executive secretaries do not “eat” alone. They “chop up” and pay it forward. They gratify their supervising ministers, the Oba’s and Emirs in their state and geopolitical zone, they gift their governors and the powerful ones even “sees” them at the Presidency. Most importantly they send gold and diamond jewelry sets to the governor or president’s wife to remain “loyal”. It is a system of entrenched patronage and graft. That is why a desktop that can be bought for $649 at electronic stores in brick and mortar stores across the United States and even on Amazon.com would cost $12,000 in Nigeria. The civil servant top brass need to hedge against the unknown. The governor’s son or daughter may be getting married during the budget year and they have to be there with N5million in cash gift along with loads of party favors. The extra on the computer cost will help get that done. Who knows if the minister will lose his father or mother during the budget year? And the permanent secretary has to perform and “do something”. The president lost his mother in-law and we all witnessed the stampede at out shining each other at her burial. Civil servants plan for eventualities that will demand “family support or poverty alleviation” from them, that is what they do. How about first class airline tickets for the permanent secretary’s family Summer vacation? How about the “yanfuyanfu” money the children will spend? Do you think it comes from his less than N500,000 per month he takes home including allowances? Where will the children school fees for those elite prep schools come from? It is from this same budget, it is and had always been the case. When you visit your uncle or kinsman who is a director in the ministry of whatever to beg for assistance in paying your rent, school fees, naming ceremony; kid yourself not. The money you are given is either directly from the government coffers or from inducements given for an awarded contract, expected favors or “appreciation” for doing his job. That is why everyone in this country waits on the budget to be released. Government is everybody’s business. There is nothing anywhere except in government. Even oil majors look up to government. Therein lies the peril of a mono-economy whose custodians are thieves.
At time of writing this, OPEC Basket Price is around $105.00. What have we done with high oil prices all these years? Nothing! It is high oil prices that is helping to sustain the fragile peace this country has. With elections looming, Jonathan will throw in everything he’s got. There is every likelihood there will be substantial rise in pre-election extra budgetary spending. With oil trending downwards, heavy deficit spending and possible production shortfall due to sustained economic sabotage in the Niger Delta, we may be heading for tougher times. Unfortunately we are overly exposed to price shocks because the Excess Crude Account (ECA) had been drawn down quite significantly from $9billion in January 2013 to $2.5billion a year later.
Nigeria saves revenue from oil prices above budgeted levels in its ECA. The budgeted oil price for 2014 is set at $77.5, even though Nigeria needs about $89 as benchmark price for crude to meet budgetary demands or the government would be forced to increase output or reduce spending. None of which is happening, hence the depletion of the ECA. Any drop in price of oil to about $90-95 will alter the fiscal landscape for this country and there is no sufficient funds in ECA to absorb price fluctuations at all. Yet the petroleum minister, the NNPC, finance ministry and the presidency have colluded to steal $10-50billion depending on whom you believe.
In this pork budget, the Ministry of Water resources headquarters (what do they do there? Do the federal government provide portable water for anyone?) plans to spend N40.4 on ‘Welfare packages’. Whose welfare are they packaging under this budget head? Welfare packages, public relations or whatever name it is called is to the permanent secretary what the security vote is to the governor. It cannot be audited. It is his “chop money”. Never mind if the “chop money” can build and equip a world class hospital. If you want to understand how to skim money for 2015 elections, a peep into the foreign ministry budget will fit the bill. The ministry will spend almost a quarter of a billion to chase rodents and creepy insects away from its facilities. Yes, N201million for fumigation. The women Affairs ministry may yet be the the leanest and meanest! They do not have anyone in house to do the heavy lifting that budgeting is. That is unnecessary overhead cost, alternatively, they hired consultants who must be paid N8million for the job of knowing what to spend on refreshments, camping materials and clothing.
Meanwhile, in a country where millions are spent in high offices on meals, somewhere in Akowonjo, Lagos State an Elizabeth gave birth to a child near a well where she went to fetch water. She knew she was in labor but she could not even afford the services of a local midwife, so the hospital was never an option. Neighbors had to spread newspapers on the ground for the baby when her water broke. She was delivered of her baby boy that night with flash light from a cheap Nokia phone. The child’s umbilical cord was severed with a kitchen knife. He laid there while someone donated a worn wrapper to cover the baby. Does anyone have to wonder why we have higher maternal and infant mortality than Afghanistan? The poor have no voice they are out of sight. The elite seem determined to run this country aground, it is pathetic! I see the cheapening of human life due to insensitivity to the plight of the poor everyday. I see needless death brought on by poverty and ignorance. It is unfortunate that the world’s seventh largest producer of crude oil can be in this parlous state.
For what it is worth, this country cannot embrace accountability and transparency until program budgeting is adopted to replace the envelop budget system. Program budgeting is a better alternative because it describes and gives the detail costs of every activity in a budget. Unlike the outrageous block allocation of N71.6million to Anniversaries and celebrations in the Women Affairs ministry; objectives, outputs and expected results are described fully as well as their resource costs. As opposed to the envelop budget of cash for item, the program budget is the sum of all activities or programs. A Program Budget will show what will be done, at what cost and with what expected results in detail. Program budgeting is the answer for transparency and precise delineation responsibilities. For this reasons it has been widely resisted wherever it has been introduced in the public sector. If you don’t want profligacy in government, call your Senator and representatives; tell them you want program budgeting as a way to improve public sector accountability and increased government performance. It is the least you can do.