By Yemi Adebowale
I thought that with the Muhammadu Buhari change mantra, the era of budgeting huge amount for frivolous things in the Presidency would become history in Nigeria. Unfortunately, the reverse is the case as seen from the 2016 budget submitted to the national Assembly. In spite of the poverty, disease, hunger and malnutrition pervading this country, the Buhari administration had the effrontery to budget about N3.7 billion for the purchase of unspecified number of BMW salon cars for the Presidency’s principal officers. Another N189 million was voted to “buy tyres” for various vehicles being used in the Presidency. Who would have thought that Buhari would also indulge in these excesses? It is nauseating to know that Buhari even increased the budget for local and international travels to N1.415 billion as against the N944,672,109 spent in 2015 by him and his predecessor, Dr. Goodluck Jonathan. The amount is N470.38 million or 46.7 per cent more than what Jonathan was allocated for the same item in 2015.
The 2016 budget for the Presidency is filled with all sorts of repulsive expenditure. N326 million was allocated for Aso Rock Wildlife Conservation, including the purchase of exotic animals as against the N24. 6 million budgeted last year by Jonathan. Acquisition of presidential canteen materials and kitchen equipment for the Presidency will gulp N89 million in 2016. State House will spend N104.7m on refreshments and meals. Foodstuff and catering materials worth N102.9 million are to be supplied. The Vice President’s office will get N16.6 million for supply of foodstuff and catering services in 2016. The maintenance of the 10 aircraft in the Presidential fleet will gulp almost N3.65 billion in 2016. Also, N764.67 million was proposed for “construction and provision of recreational facilities in the Presidency. N322.4 million is allocated for the linking of cable for the driver’s restroom at the State House. I guess they will be laying golden cables.
So, this is the change Nigerians voted for? What has happened to the so-called “efficiency unit set” up by this administration aimed at driving a reduction of overheads by at least seven per cent, personnel costs by eight per cent, and other service wide votes by 19 per cent.?
The planned profligacy aside, the budget itself is dead on arrival. In spite of the forecast by the IMF that crude oil could sell for below $20 per barrel in 2016, our budget was still predicated on crude oil benchmark price of $38 per barrel and a production estimate of 2.2 million barrels per day in 2016. It costs about US$30 to produce a barrel of oil in Nigeria, hence the expectation of revenue of between US$8 and US$9 per barrel by the federal government in the 2016 budget. This could be fiscally damaging because the entire revenue expected from crude oil may not be realised if the price falls below $30 as a result of the glut in the crude oil market. So, oil-related revenue expected to contribute N820 billion to the budget may end up being a mirage. Already, crude oil price was about $31 per barrel yesterday. According to the IMF projection, “price of crude oil could drop between $5 and $15 in 2016 owing to the prospective lifting of economic sanctions on Iran and the capacity of the Middle East oil producing country to roll out additional one million barrels of crude daily.” Additionally, there are concerns following the decision of the USA to lift a ban on the exports of its oil, adding to the global supply glut. If the IMF predictions come to pass, the entire revenue projected to come from crude oil in the 2016 budget will be wiped out. This administration did not plan for this. In the short term, a responsible government should focus on aggressive tax drive to shore up revenue.
The FIRS and Customs can contribute at least N10 trillion to the federation account if properly managed. In the medium term, focus should be on export of agricultural/industrial products and solid minerals for forex inflow. In the long term, we should be working towards the completion of Brass LNG. There is still a big global market for liquefied Natural Gas.
Buhari’s 2016 budget was also predicated on a revenue target of N3.86 trillion resulting in a deficit of N2.22 trillion. The plan is to finance the deficit by a combination of domestic borrowing of N984 billion and foreign borrowing of N900 billion, amounting to N1.84 trillion. This is most preposterous. How can a government that promised change be looking towards borrowing to finance over 30% of its budget? Again, the plan to borrow N984 billion in the domestic financial market will create crisis for the real sector that depends largely on this market for finance. Of course, federal government bonds and treasury bills will be more attractive, thus creating problem for manufacturers in their quest for finance. Already, manufacturers are gasping for breath because of the stifling policies of the Buhari administration, particularly the forex restrictions. As a result, thousands of Nigerians are being sacked daily by manufacturers.
I sincerely hope that the National Assembly would look at this budget proposal dispassionately and cut off Buhari’s frivolous expenditure proposals. Our distinguished lawmakers must return the budget to about N4 trillion, which is realistic. We should not expect anything from crude oil in 2016.
Is Governor Ortom Out to Ruin Benue?
I was hoping that Governor Samuel Ortom of Benue State would deny reports that he spent about N560 million to acquire luxury cars for commissioners, special advisers and local government chairmen. The cars were also alleged to have been bought at inflated prices. So far, no denial has come from Ortom. So, the story about buying 13 Prado cars at N240.5 million, with each allegedly costing the state N18.5 million and 43 new Toyota Corolla cars at the cost of N318.2 million with each allegedly delivered at N7.4 million is indeed true. I don’t understand what commissioners and special advisers in a bankrupt state like Benue would be doing with Prado. Civil servants in this state are still being owed salaries of between three and five months, yet, Ortom does not see anything wrong with splashing N560 million on luxury cars.
It is even more painful to learn that the cars were purchased at inflated prices. The Prado allegedly delivered at N18.5 million each, cost just about N11 million in the open market. The Toyota Corolla cars allegedly delivered at N7.4 million each is just about N5 million in the open market. So, this is the “change” Ortom promised the people of Benue State? The Benue governor has also plunged the state into a very big debt. In just seven months, he has taken N22 billion loan from banks. This is in addition to the N28 billion bailout loan from the federal government. The bailout was specifically to pay outstanding salaries. Just like in many states, this was only partially done by Ortom. As a result, civil servants in the state are still wallowing in poverty, just as former governor Gabriel Suswam left them. Virtually everything is at a standstill in Benue State. The development promised by Ortom is fast becoming an illusion. The founding fathers of this state must rise up against this profligate administration before it is too late.
Still on Forex Sales to BDC
In spite of the pressure to stop the Central Bank from selling forex to Bureau de Change operators, the apex bank still went ahead to sell $100 million to them about two weeks ago. I was shocked by this latest action by the CBN. I thought that with the points rolled out by key stakeholders against the sale of forex to BDC, the CBN would no longer dash out USD to the BDC. Obviously, many within the CBN are benefiting from the subsequent round tripping that follows such forex sales to the BDC. The President must step in and stop this corruption.
The BDCs should depend on official allocation of forex from the CBN for their operation. They should provide alternative forex funding window for the economy. The position of the Manufacturers Association of Nigeria (MAN) is instructive here. MAN stated recently: “The BDC should source their forex needs independently from alternative sources and supply to the market. It is difficult to understand their real function with the kind of arrangement Nigeria has. They act as mere distributive conduit by simply getting forex allocation from the CBN and selling to very few Nigerians thereby making their profits without much value addition. Forex allocated to the BDCs should be channeled to the productive sectors of the economy, especially manufacturing for the importation of essential inputs and machinery that are not locally available.”
No doubt, the CBN has simply been squandering our limited foreign exchange by selling USD to BDC at “official rate”. Round tripping of forex will continue to flourish because of the huge disparity in the two exchange rates.
Round tripping will also continue by money deposit banks because of this huge gap between the official and market rates. This government must put an end to this in the interest of this country by allowing the exchange rate to be determined by the market but with some moderation by the CBN. As suggested by MAN, the naira should be allowed to flow freely within a bracket which the CBN will determine. We don’t have adequate reserves to keep holding the naira at the so-called inter-bank rate. Illogical administrative controls and restrictions by the CBN are killing the Naira.
Our President’s Affront to the Rule of Law Under a Democracy
Our democracy and the rule of law are on trial with the brazen disregard for court orders by the Buhari administration. Accused granted bail by our law courts are rearrested and humiliated by security operatives apparently on the orders of the President. The cases of Sambo Dasuki, Nnamdi Kanu and Patrick Akpobolokemi readily come to mind. Buhari confirmed his involvement in this impropriety and disregard for the rule of law during the Presidential Media Chart on Wednesday when he defended the illegal actions against Dasuki and Kanu. Our President is clearly not living by his oath to protect the constitution. The pro-democracy activists that fought late Sani Abacha to a standstill must rise up and confront Buhari, otherwise, things will get out of hands. We must not allow this brand new dictatorship to mature. Court orders must be obeyed by all. It is not about these accused being guilty or not but a fight for the rule of law and the constitution of this country. In the case of Dasuki, the Department of the State Security Service (DSS) operatives refused to allow him go home on bail, even after perfecting the third bail granted by Justice Affem, who admitted him on bail on the grounds that his alleged offences were bailable. The judge further banned the EFCC from re-arresting the former NSA boss.
Earlier, Justice Adeniyi Ademola of the Federal High Court also in Abuja, granted the ex-NSA bail on November 3 in the charge of unlawful possession of firearms, but the bail was on November 4 scuttled by the SSS operatives, who laid siege to his Asokoro residence and placed him under house arrest. They eventually re-arrested him. He was later arraigned before Justice Yusuf Baba of the Abuja High Court on breach of trust and was granted bail. But the DSS also refused to obey this. Lovers of democracy must rise up against the Buhari impunity. It is heartwarming to note that human rights lawyer, Ebun-Olu Adegboruwa has added his voice to the condemnation of this dictatorship and humiliation of the judiciary. “To have arrested him (Dasuki) and taken him into custody is to openly be pointing hands in the face of the court. And when we get to the stage where the executive has no respect for the judiciary, we are approaching anarchy. We are approaching despotism and once people lose confidence in the judiciary we get to the state of anarchy and lawlessness; we’d get to a stage where individuals will no longer be ready to submit themselves to the rule of law,” said Adegboruwa. This is food for thought for our pro-democracy and human rights activists.
That Charade Called Presidential Media Chat
If the organisers of the Presidential Media Chat don’t want to invite journalists capable of asking the President critical questions on national issues, then, they should stop this travesty called media chat. What took place on Wednesday night with President Buhari in Abuja was a farce. Three of the invited journalists were too timid to ask critical questions. The only one that tried asking critical questions could not really put them together properly. So, the President got away with largely “make me shine questions.” For about two hours, questions were not raised about the epileptic power supply in this country, gale of retrenchment, the two cars giving to him by the NSA office, dwindling industrial capacity utilization, the 2014 National Conference report, rising inflation, poverty, disease and hunger in our land. The few questions asked about sliding economy and insecurity were timidly presented.
Culled from RingTrue with Yemi Adebowale on Thisday; Email: yemi.adebowale@thisdaylive.com; 07013940521 (text only)
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