2016 Budget: Buhari's Change, Fact Or Fiction?

The 2016 budget termed the "Budget of Change" has been presented to the National Assembly by President Muhammadu Buhari on December 22. It holds promises of stimulating the economy, making it more competitive by focusing on infrastructural development; delivering inclusive growth; and prioritizing the welfare of Nigerians.

However, beyond the paperwork and promises embedded in the budget, there are certain issues that must be brought to the fore, issues that the government must pay keen attention to.

[article_adwert]

Major promises

There are five major highlights of the 2016 budget as presented on December 22:

1. Free tertiary education for science, technology and education students and home-grown public primary school feeding.

2. Tax reduction for small businesses, which entails that Nigeria’s job creation moves, will be private sector driven.

3. Large-scale infrastructural development, which is geared at supporting reforms in the agriculture, solid minerals and other core job creating sectors of the Nigerian economy.

4. 500,000 teaching jobs, to address the “chronic shortage” of teachers in public schools across the country.

5. Improvised service delivery and security, which will ensure that teachers, men of the armed forces, medical personnel doctors, police officers, fire fighters and many more critical service providers are paid competitively and as at when due.

Matters arising

1. Borrowing increases as oil price falls

The president in his budget has said that he would spend $31 billion (N6.1 trillion) in 2016 on infrastructure and the economy. This raises spending by 20% next year by borrowing heavily amid falling oil prices.

Though the president is seeking alternate means to generate revenue, still statistics by the OPEC shows that petroleum exports make up 90% of total overseas revenue generated.

According to BBC's estimates, the country's budget deficit is expected to double to N2.2 trillion ($11 billion) next year.

READ ALSO: 2016 Budget: Five Times The National Assembly Went Crazy

Buhari has said the government would seek funding of N900 billion overseas, as well as N984 billion domestically.

It is sad to note that out of the N3.9 trillion revenue forecast for 2016, only N820 billion will come from crude and this is no thanks to the fact that oil prices have fallen from about $55 a barrel since the beginning of the year to around $36-$37.

All the statistics only hints that there has to be great investment and new sources for fund generation, else the nation might yet again be plunged into great debts.

2. Five thousand naira and the unemployed dilemma

Official figures show that the rate of unemployment in the country is growing, up from 8.2% in the second quarter to 9.9% between July and September. Inflation is also rising, hitting 9.4% in September, on fuel shortages and higher food prices. The question then becomes, how viable is the N5,000 option?

Between arguments of how meager the pay is, is the question of how can we ensure that all the unemployed get the money allocated? Who are the unemployed and how is it possible to verify that one is unemployed? How are we sure that the program is sustainable?

All these questions continue to plague the minds of the teeming millions of Nigerians who are unemployed.

3. Subsidy and fuel scarcity nightmare

While presenting the 2016 budget, President Buhari noted that the prolonged hardship and misery caused by fuel scarcity is as a result of market speculators and resistance to change by some stakeholders.

He noted that the government is working very hard to end these shortages and bring fuel to the pumps all over the country.

One very significant statement is the "resistance to change by certain stakeholders", one is quickly drawn to the Jonathan-led era when he said there was a cabal controlling the oil sector. Then the question becomes, with persistent pressure on this said stakeholders, will this government prevail as to return normalcy to the petroleum resources ministry?

There is also the case of having directed the Petroleum Products Pricing Regulatory Agency (PPPRA) to adjust its pricing template to reflect competitive and market driven components, with the believe that this can lower input costs and attain efficiency savings that will enable PPPRA to keep the selling price for all marketers of petrol at N87 per litre for now.

It all sounds very enticing, but the question is, if eventually the subsidy is removed, will the N87 per litre still hold is own? Some chieftains of the APC are of the opinion that fuel subsidy removal is inevitable.

Premium Times reports that the APC national chairman, John Odigie-Oyegun, has stated that fuel subsidy will be removed eventually. If this be the case, then petrol will retail at about N97 per litre. This estimate is made with current landing price being between N77 – N79 per litre.

4. Defence vs Education

According to the words of the president, a significant portion of the recurrent expenditure is given to institutions that provide critical government services. Having noted that, there are rifts over why N369.6 billion is allotted to education; while N294.5 billion goes to defence.

Some will argue that insurgency and insecurity is about the most important or pressing need of the nation as of the moment, especially in the wake of the turbulence in the northeast.

It is important to note, however, that according to Unicef, Boko Haram keeps over one million children out of school. In that light, the government will argue that a lack of education will fuel further the burning flame of terrorism.

If the budget is executed properly then it will see to it that students in disciplines of science, technology and education are trained for free in tertiary institutions, while the pupils in primary schools get a free meal daily.

A great initiative indeed by the current administration, but, again, how feasible would the implementation be?

Like in many other instances, proper documentation is feared will be the death of some of these initiatives, as one cannot for sure say how many students are in our tertiary institutions, neither can one certainly say that there is a finite number to pupils all over Nigeria.

Who benefits from the scheme, those in the urban cities or those in the hinterland? How can we account for those in the creeks and other very remote places?

President Buhari has said that an efficiency unit has been set up by his administration and that together with effective implementation of GIFMIS and IPPIS, the government will drive a reduction of overheads by at least 7%, personnel costs by 8% and other service wide votes by 19%.

He ensured Nigerians that the budget will be executed to provide optimum value by ensuring every naira spent by the current government counts.

“I know my people will say I have heard this before. Indeed, trust in government, due to the abuse and negligence of the past, is at an all-time low. This means we must go back to basics. Our actions will speak for us. My team of dedicated, committed and patriotic Nigerians is well aware of the task ahead and I can assure you that we are taking on the challenge," the president said.

The speaker of the House of Reps, Yakubu Dogara, has warned that Nigerians will hold President Buhari to every word and provision in the 2016 budget.

“In the spirit of change that has come to the legislature, we promise Nigerians to hold Mr President to every word and provisions of the budget when passed and assented to,” Dogara stressed.

President Buhari has assured that the APC-led government will not betray the trust reposed in them, he has said the administration will welcome and be responsive to your feedback and criticisms.

Nigerians cannot wait to have the 2016 budget approved and are even more eager to know if, of a truth, this budget is the key to their expected change, or if it is just another fraud, as some now claim.

Source: Legit.ng