At every point in a nation’s lifetime, there must be a debate and interest. For Nigeria today, they are 2015 elections and insecurity debates. These two debates are very vital to national interest, stability, growth and development.
Since no nation ever develops in anarchy and terrorism, the insecurity challenge threatening the continuous existence of this nation is a cause for concern for all well-meaning Nigeria; this is because insecurity and terrorism stifle the economy and scares away Foreign Direct Investment. On the other hand, elections are held periodically to bring freshness into government. For the Nigerian state to develop also, it needs a working budget which shall drive its growth and prosperity.
If intelligent guess could be made on debates, motions and bills of utmost national priority before the National Assembly today, one can safely assert that 2014 Appropriation Bill of the executive is a bill the two chambers of the National Assembly would tackle speedily and squarely with a view of passing it into law before the month of February runs out.
Although the 1999 Constitution as amended grants the executive limited latitude to expend and continue running government based on previous year’s budget until the legislature passes a proposed budget, it must be noted that timely passage of annual budget has significant positive impacts on the economy. Therefore, the executive and legislature at all levels of government must work in unison to give Nigeria a clear economic direction before the dawn of January 1 every year.
Speaking with the Senate press corps shortly after laying the 2014 budget before the National Assembly as reported by The Tribune of December 19, 2013, the Minister of Finance, Dr Ngozi Okonjo-Iweala, enthused “This budget is the budget for job creation and inclusive growth… Job creation is the key to really solving the problems of the Nigerian economy… The budget is going to support the push in agriculture. It will kick-start the housing sector where we can create more jobs… It is designed to our policies that would support manufacturing because jobs would be created there. Industries will also be created in solid minerals.”
As for breakdown of the budget termed “The Budget of Job Creation and Inclusive Growth,” the minister also noted that, “The capital is about N1.1 trillion and makes up about 27 per cent of the budget. The balances of course is the recurrent; it is about 72 per cent of the budget.”
The 2014 budget is predicated on the assumption that the nation would produce 2.3883 million barrels of oil daily; this is against 2.526 million barrels per day of crude oil the 2013 budget was based on; $77.5 per barrel of oil, average exchange rate of N160 per dollar and economic growth rate of 6.75 percent.
It is noteworthy that for these assumptions to hold sway, the federal government must step up its commitment on security and peace in the Niger delta region so as to curtail pipeline vandalism and oil theft which have emerged to become the enemy numero uno of our economy amongst other critical dynamics.
A mere glance at the budget estimate suggests that the federal government would be spending N3.542 trillion on recurrent expenditure leaving a meagre sum of N1.1 trillion to carter for capital expenditure for over 150 million Nigerians if the National Assembly passes the budget proposal without any amendment. Furthermore, out of the N3.542 trillion budgeted for recurrent expenditure, personnel cost would gulp N2. 239 trillion, while overhead cost takes a staggering sum of N1.303 trillion. And the question would be: if we succeed in paying workers, are we not going to construct roads, build and equip our schools, hospitals, etc.? Are we ready to sacrifice portable water supply, security, railways, electricity and all other government duties for salaries of workers?
In a way, the federal government intends to spend 40 percent of our 2014 budget in taking care of less than two million Nigerians who work in federal ministries, departments and agencies. In other words, we live in an era when the governments of Rivers, Lagos, Delta, and Akwa Ibom states put together implement the same capital expenditure as the federal government.
On the strength of the foregoing, it becomes a massive wonder, even to the non-economist, how the assertion of the minister of finance on job creation intentions of this year’s budget would be achieved based on the budget proposal. To the realistic pessimist, the Finance minister’s enthusiasm on the budget might end up becoming another hoax; this is because jobs and macroeconomic stability are not built on nothing, they are built on sustained investment in capital expenditure.
For a country like Nigeria, it is projected that we must to invest N15 trillion on capital expenditure annually over the next thirty years to achieve the 70 percent internationally accepted benchmark on infrastructure of our Gross domestic product; that is, we must invest in capital projects such as power, road, transport, etc. which provide the foundation for job and wealth creations.
Thus, the decline in capital expenditure of the federal government in 2014 seems to imply that we are a nation that is not concerned of the role of infrastructure in building and sustaining modern economies.
The 2014 budget expenditure proposal in key sectors of the economy shows a gross neglect on the Importance of infrastructure and other precursors for economic development. For example, the economy of Nigeria needs to be diversified for economic el dorado and it is also a known maxim that agriculture employ over 60 percent of Nigeria’s population directly or indirectly; hence the sector needs more allocation so that it can provide jobs and create wealth for the citizenry but the allocation to agriculture declined from N83, 37 billion in 2013 to N66.64 billion in 2014. In agricultural research and development of 2014, the federal government voted N700 million against the N2.71 billion it received in 2013; and one begins to wonder how agriculture can blossom under this budget.
Similarly, investment in science and technology which is key in modern economies is taking a downward slope in Nigeria; the budget earmarks N30.847 billion for this sector, this is against the N38.673 billion the sector got in 2013 but this goes a long way to show the commitment of government to this sector. Out of this sum, only 22 percent would go into capital expenditure which forms the fulcrum of research and development while recurrent expenditure gulps 78 percent. And this does not look good for Nigeria which needs rapid technological advancement to support its industries and limit capital flight.
Leave a comment here. Send feedbacks & articles to firstname.lastname@example.org. Follow @SkytrendNews on twitter and be our fan on facebook.
All rights reserved. Contents published on this page are copyright materials of Skytrend News and may not be published, re-written or reproduced without prior written permission from Skytrend News.