Monday,
November 12, 2018 11:05AM / OpEd By Tope Fasua
THE FEDERAL GOVERNMENT OF NIGERIA MUST BUDGET AT LEAST N15 TRILLION
(Fifteen trillion Naira Only) FOR THE YEAR 2019
BEING A PETITION TO THE NATIONAL ASSEMBLY, MINISTRY OF BUDGET AND
PLANNING, MINISTRY OF FINANCE, THE NIGERIAN PEOPLE FROM MR. TOPE FASUA -
PRESIDENTIAL CANDIDATE, ABUNDANT NIGERIA RENEWAL PARTY. (ANRP) - SEPTEMBER 2018
PREMISE:
It was to with utter shock that I received the news of Tuesday 18th of
September, 2018 indicating that the Federal Government of Nigeria (in its
fiscal strategy paper) plans to present a 2019 budget of N8.9Trillion for
the people of Nigeria.
This proposal is problematic for several reasons;
- In gross/absolute
terms the 2019 budget is smaller than the budget for 2018 by over
N200Billion. This means that from get go, Nigeria’s government is
decidedly and deliberately taking Nigeria backwards, or promising clearly
that Nigerians are in for tougher times next year.
- Nigeria’s population
grows at about 3% per annum. This means that an extra 5 to 6 million
mouths are added to the responsibility of government each year. It is
therefore unacceptable, and utterly wicked to provide less for these
people.
- Already the plans and
dreams of the Nigerian government for WE the people is suboptimal and
dismal in several respects, even when compared to what other countries -
even in Africa - have as plans year on year for their own people. I will
elucidate on this later. To plan to do less for a people is to confront
the people with that planlessness and tell them to go to blazes
- Yearly average food
and other consumer inflation is about 13% in Nigeria. This means that
N1million at the beginning of the year is a mere N870,000 at the end of
the year. If we discount the proposed budget with the Consumer Price
Inflation rate in order to find its REAL VALUE, the figure shrinks to
about N7.7Trillion (at a conservative 13% average CPI per annum).
- With this small dream
the FGN has for Nigerians, there is no way it can grow the economy at the
required ambitious rate or begin to reduce the numbers of the 90 million
odd Nigerians who live presently in extreme poverty according to the
World Poverty Clock. The government is still the biggest spender in our
economy (and there is nothing wrong with that because the government is
empirically the biggest single spender in every economy). The ability for
the government to spend appropriately not only reflates the economy but
spurs growth in other sectors of the economy. As government shrinks its
plans, other sectors of the economy will certainly shrink.
- This 2019 proposal is
being done along the usual lines. There is little responsibility or
accountability in the budget. The budget is not performance or
evidence-driven. As usual we are beginning another budgeting process where
each item on the budget is an insertion by powers that be. Perhaps the
reason for the reduction in both the absolute and real value of the budget
is that the usual suspects are getting a bit tired of budget-padding and
stealing. Their thinking revolves around what they’ve been used to and
they cannot therefore imagine something totally different. However, it is
also clear that they have no plans whatsoever for the people of Nigeria -
young or old, strong or weak.
- Already the 2018
budget is being implemented in breach. Little or No capital releases have
been made. The budgeting process has become a joke, rather than the anchor
of the Nigerian economy, and its hopes and dreams as it should be

Figure 1 above shows in a nutshell the shocking proposal of the FGN for
Nigerians.
Not only is the budget on the downward slide, the FGN expects revenue to
fall by N840billion in 2019 - compared to the current year. Why should this
happen? Are we going to be less productive, all of us? And if the government
thinks so, what is it doing to avert this sad course? Equally, Nigeria hopes to
increase deficit financing by N640billion. So what we have here is a plan for a
multiple jeopardy. Not only is the budget smaller, and revenue projections even
punier, but we intend to incurred a larger deficit of over $2billion
additionally above the deficit we are running this year. In other words,
Nigeria intends to move from a budget deficit of N1.9Trillion ($6Billion) in
2018, to a deficit of N2.59Trillion ($8billion) in 2019, while the total budget
is even lower
The implication of this is that all revenue agencies - according to this
budget proposal - intend to go to sleep. Revenues drive budget and many African
countries are doing far better than we are because of our capture and
imprisonment by ‘entrenched interests’ who simply enjoy that 90million
Nigerians remain in extreme and food poverty, that 15million children remain
out of school, and that Nigeria remains the worst country on earth in terms of
child and maternal mortality. A Bill and Melinda Gates Foundation report came
out a few days ago to the effect that even in the year 2050 - 32 years away,
40% of all poor people on earth with be from Nigeria and DRCongo (this same
report notes that the first wave of poverty eradication in modern times
happened in China and the second is happening presently in India). This is a
judgment call on our collective future that we must reject in all totality and
the way to do that is to weigh in at this momentous time and reject this budget
of hopelessness.
It is imperative to do this because of the way things play out in
Nigeria. Every budget proposal is subjected to at least 9 months of
back-and-forth which has nothing to do with how the people will benefit better
from such proposal but everything to do with who can insert pork-barrel items
into such proposals. This year’s initial budget was N8.6Trillion before members
of the National Assembly increased it by N500billion by adding loads of their own
‘projects’ into it. We are indeed in a state capture and the time to reject
this whole shebang, is NOW!
Further analysis of our 2019 budget proposal shows that the absolute
dollar value dropped from $25.2billion (N9.1Trillion divided by N360=$1) in 2018,
to $24.7billion (N8.9Trillion divided by 360). However we need to discount this
Dollar value by the US rate of inflation of 3%. Still the REAL Dollar value of
the 2019 budget is $24billion. If we consider the erosion of value as described
above, per capita budget - or budget per person - drops from $140.4 per annum
(or $0.38 a day), to $117 per annum for 2019, or $0.32 a day. This is what the
government plans to spend on salaries, pension, infrastructure, education,
security, health, environment, agriculture and every other thing it budgets
for, per Nigerian in the year 2019. This is unacceptable because even within
Africa, Ghana budgets $492 per person for the year 2018, Cote D’Ivoire $532,
Cameroun $342, Gabon $2,449, South Africa $2,672, Morocco $838, Egypt $715,
Algeria $1,467 and Angola $1,880, to name a few. It needs to be emphasized that
a dream precedes any great achievement, and the budget of a nation being its
most important dream, year on year, tells a story of where that nation is
heading. All the nations mentioned above seem to be powering on faster
than Nigeria and this is reflected in everything else. Nigeria is however only
not dreaming big enough, but the dreams of our leaders for the country seems to
be in solid reverse.
I have heard it asked; ‘so how do we fund this big budget figure?’.
First of all, a budget of N15Trillion is not big for Nigeria because it
only translates into $225 per capita for each Nigeria - except if we are
admitting that our population figure is overbloated. We also have to question
whether truly we are the largest economy in Africa, or simply the most chaotic.
Chaos and noise does not translate to substance. I want Nigerians to know that
mass poverty is not a destiny and that we can do a lot better than we are right
now. Figures don’t lie, and we should be giving our leaders marching orders
IMMEDIATELY to produce the kind of results that other countries even in Africa
are achieving or no deal. We must not look at our economy with the eyes of the
present. We must forget everything we know about this economy and consider it
with the eyes of a new CEO that has been headhunted from a rival, successful
organisation. If that is the case, the first benchmark is to look at other
countries and decide to at least match them. It is certainly not acceptable in
the very least, for Nigerian leaders to be saying to the poor, suffering people
of this Republic, that we have to budget LESS for next year, when population is
growing and inflation is eating rapidly into the value of our money.

Figure 2: Comparisons of absolute budgets and budget per person, among
African countries
HOW DO OTHER COUNTRIES GENERATE REVENUE TO DRIVE THEIR BUDGETS?
The time has come to ask this question and find answers. Nigerians are
the most traveled people perhaps in the world. Some questions confront us in
this country; how do other countries generate revenue? How can Angola generate
from its economy, more than twice Nigeria’s revenue, and drive more than twice
our budget for its 25million people? How can South Africa budget 6 times what
Nigeria does for its 60million people? And how is it funding that budget? A
highly-respected person once said rather than being truly the largest economy
in Africa, Nigeria is actually akin to a large grapefruit with little juice. Is
this our reality? Can we never do better than this? I believe we can. I believe
we must. And the time is now. I would wager that our biggest problem in
generating revenue is the entrenched interest factor. Emir of Kano, Muhammad
Sanusi II, had mentioned this once, among others, in a TEDx Talk. The
entrenched interests, otherwise known as principalities and powers of Nigeria,
should be made to see the negation of their own enlightened self interest,
because even within the context of Africa, they have only succeeded in keeping
us all down. They can make more money than they are right now, if money was the
problem. What is unacceptable is the present state of our affairs. The
incredibly tiny budget is a mere symptom of a more endemic malaise.
I will proceed to explore ways in which Nigeria can generate revenue to
finance the proposed, ‘ambitious’ N15Trillion budget;
- FIND
THE PIB - Yes, let’s start from here. Crude Oil is Nigeria’s biggest
source of revenue. However in this sector we are seriously suboptimised.
Reaching a compromise with International Oil Companies on the Petroleum
Industry Bill (PIB) does not have to be so onerous. We cannot also brag
our ways to glory in this area. The reason why Angola is doing twice our
budget is that that country somehow got its crude oil laws right. In
Nigeria, we messed up dues to corruption but we are at the very turning
point right now. Barrister Femi Falana is in court with Nigeria over the
treatment of Production Sharing Contracts with IOCs. The clause that
requires that we review such contracts be reviewed if crude oil price
exceeds $20 has not been invoked. Ditto the clause that grants a 15 years
concession for zero royalty on all production from wells deeper than 1km
has not been vacated since 1993! The efforts of Falana has met with a
brick wall. Nigeria has lost more than $60billion so far according to no
less than the Minister of State for Petroleum, Ibe Kachikwu. See https://www.thisdaylive.com/index.php/2017/08/07/kachikwu-nigeria-lost-60bn-to-non-enforcement-of-pscs-with-oil-majors/.
Nigeria can add over N2Trillion to its budget by the proper governance,
supervision and risk management of its oil and gas sector. This can take
immediate effect - if uncompromised leaders see to it.The original PIB was
focused on increasing signature bonuses, royalties, and other advantages
due to the Nigerian people. We must find it, mainstream it, get it signed
and put into effect by every means. And urgently too.
- TRANSPARENCY
IN TAX/REVENUE DRIVE - Transparency will breed trust in driving
revenue. People don’t like paying taxes because they are unhappy with the
way our governments use these revenues. If our leaders would show total
transparency around budget management then there will be better
compliance. A report says VAT compliance in Nigeria is about 29%. See http://blogs.lse.ac.uk/africaatlse/2017/03/20/enhancing-tax-collection-efficiency-and-compliance-in-nigeria-the-role-of-behavioural-economics/.
Also the FIRS has claimed that many businesses not registered for VAT
collect and don’t remit, among other infractions. It needs to be noted
that we shouldn’t view government revenue from the prism of taxation only.
Government revenue entails every collectible for the purpose of organizing
society. There has been little attention, compliance and accountability in
the areas of fees, levies, duties, fines, rates, rents and sundry sources.
Whereas the TSA enforcement has helped but there still exists a huge gap
in this area. Another N2trillion should be added to the budget from better
management at this level. This is N4trillion added to the proposed
N6.4Trillion projected (reduced) revenue so far.
- OPTIMIZE
TAXATION - Apart from the issue of transparency and leadership-by-example
in the revenue drive, there is also a need to optimize some tax and
revenue lines that are lying a bit sedate in our books. Nigeria is where
people don’t bother paying Capital Gains Taxes and we have also given
waivers on CGT on capital market transactions just to encourage the
market. This is largely needless as the market swings up and down
irrespective of these waivers. These is unnecessary loss of revenue. Also
despite there being a provision for inheritance taxes, our revenue chiefs
have largely avoided that area as it touches on powerful families, despite
this being an equitable tax that works for societies wishing to reduce
corruption and reduce inequality. We can rake in at least N500billion if
we were serious about sundry taxes like this. The UK makes over 5Billion
Pounds on Capital Gains Taxes alone each year. This is an equivalent of
N2trillion. Furthermore, the rapid standardization of other sectors of the
economy, like solid minerals, will results in the mainstreaming of new
categories of taxes. The Chairman of the Federal Inland Revenue Service
(FIRS) mentioned recently that there were as many as 6,800 cash
billionaires in Nigeria whose accounts have been frozen for total tax evasion.
We commend the deployment of information technology and hereby urge the
FIRS to immediately mainstream the taxes payable by these evaders. At a
mere N10million per defaulter, we are talking of potentially N60Trillion.
This figure sounds bizarre but indeed it mirrors the decades of merciless
raping of Nigeria and its people by a tight confederacy of vultures.
- ORGANIZE
SOCIETY, MONEY WILL COME. Related to 2 above, the real issue with Nigeria
is our inability or refusal to organize ourselves. For example, we have a
situation where ‘big men’ go around with policemen trained and equipped
with taxpayers money in Nigeria. Some of these big men pay for this
service but the funds go straight into the pockets of God-knows-who. These
payments should be standardized and organised, and paid directly into the
TSA. They should also be punitive. Anyone needing a single policeman to
follow them around should be able to pay N200,000 - enough to pay the
police escort N100,000 salary with extra going to the coffers of government.
Senator Misau alleged that the Inspector General of Police pockets
N10billion monthly (N120billion annually) in this area - right or wrong.
What is evident is that this could be a money-spinner for government,
enable Nigeria to employ more people into the police, and ultimately help
in tackling insecurity. Another area where we could organize ourselves and
also generate money is in obsessing with our environment. Our youths could
be employed from secondary school to be ENVIRONMENTAL GUARDIANS, tidying
up, beautifying, securing and protecting the environment with salutary
effect in terms of an improved image for Nigeria, more tourism, higher
home remittances, better security as these youths will not be idle, and
general increase in productivity for all. Environmental enforcement could
also yield revenue for government. The biggest problem we have with
organizing our society for good is the do-you-know-who-i-am factor. When
leaders and their friends in high places are not ready to keep the law or
pay a fine, no one else will comply. I will not put a figure on
this.
- REORGANIZE
BUDGET MANAGEMENT - Perhaps the first thing that should be done is
to reorganize and rejig our budgeting culture. The Federal Government has
basically continued with the envelop system which emphasizes discretion on
the part of Ministries, Departments and Agencies. What makes it into our
budgets bear every resemblance with what the operatives at those
institutions dream about, and little to do with the desires of the people.
There is an urgent need to fuse zero-based with performance and
evidence-based budgeting with the people being the full beneficiaries of
our budgets at every level. As it happened last year and the years before
it, and as it is this year, the 2019 budget will be full of the
appurtenances of office that our leaders in the MDAs wish to acquire for
themselves. It will be full of projects that tie with the protection of
territory, and not the delivery of service to the people. For example,
there is an item in the 2018 budget for NPA to construct a new office in
Abuja, 19 years after it was forced to relinquish Ship House to the
Ministry of Defense. Why does NPA need an office in Abuja? And why do
government agencies prefer buying or building their own mansions rather than
taking over some of the thousands of recovered properties all over town -
beyond the need to strike deals for themselves in these real estate
acquisitions? Very importantly, there is a need to make budgets at
all levels of government - and ultimately what makes it into the revenue
and expenditure side of the final federal budget - to be driven by revenue
targets. If the budget is premised on a sense of responsibility on
the part of CEOs of MDAs, and they first commit to a revenue target of which
they must ensure an excess percentage goes to government coffers, this
will release a lot of revenue for government and the people. So, for all
revenue-generating agency reorganized and refocused with reasonable
revenue targets remittable to TSA, I say Nigeria should target another
N2trillion in revenue. This takes our additional revenue to N6.5.Trillion
- ESTABLISH
SHARED SERVICES AGENCY AND COMPULSORY ANNUAL ACCOUNTING - Any
budget which concentrates on waste via ego-trips, or on the conveniences
of powerful demigods in office not only kills a nation, but ensures
stunted growth. A budget is a spending plan that should reflate itself.
So, there is a way of streamlining the budget to reduce the expenditure
component in the right places, while freeing up revenue in other areas to
ensure the economy is properly rebooted for productivity. My target and
consistent admonition is that this economy should grow by 15-20% per
annum. Only double digit growth can justify upper double digit interest
rates and inflation. So, rather than the current situation where every
powerful person in the MDAs throw in sundry fancy projects to fill up the
budget, we should have a strictly controlled agency that does the
procurement for all MDAs and also sees to proper usage and disposal after
useful life of government assets (like the GSA - General Services Agency -
in the USA). Also, Nigeria must immediately establish a compulsory
publishing of the Comprehensive Annual Financial Report by ALL MDAs. This
will ensure that we urgently and gradually begin to embrace the kind of
responsibility that has made other nations great. For starters, we urge
the Nigerian government to ban the purchase of any new car for any agency
for the next two years at least. To emphasize this, our budgets should be
for the people. It must be clearly shown that those budgets are calibrated
to uplift the people.
- PRIVATE
SECTOR APPROACH - An economy cannot be run any differently from
a private sector enterprise… at the end of the day. When I listen to
otherwise enlightened people speak about how this is the best we can
achieve in Nigeria - even in the face of so much evidence as to what is
happening elsewhere - I just marvel. The level of accountability that
drives the private sector must ultimately and immediately begin to drive
our economy. Ditto the sense of progress and urgency. In the private
sector, you will have hell to pay if you tell your shareholders or bosses
that you are projecting smaller figures in absolute terms for next year
compared with this year. You have to explain why the company is dying.
Nigeria is dying. The N8.9Trillion projection by Nigeria’s Ministry of
Budgeting for next year 2019 is not only N7.7Trillion in 2018 Naira, but
converted at 2015 Naira (which was N200 to the US$), the figure is a mere
N4.2Trillion - smaller in real terms than the budget for 2014! What will
happen in a private sector setting is that a new CEO will be hired who
will not listen to any excuse about how the company (country) is peculiar
and how there are different evil spirits and principalities crawling out
of every hole. The new CEO will ask only one questions; “How is Angola
budgeting twice, Algeria thrice and South Africa doing 6 times our
budget?”. Then he will proceed to issue out marching orders and targets,
and even lay off some fat cats who are sitting on the company’s neck and
choking it to death with their dead weight. The fact is that this economy
is still shut in. The economy hasn’t started, and most people who should
know, are unfortunately suffering some sort of cognitive bias or the
other. This certainly is not the best we could achieve.
MY PRAYERS / CONCLUSION
I urge the Nigerian government to have a total relook/reconsideration of
the 2019 budget. I urge it to find every way to increase the budget to at least
N15Trillion for the sake of the Nigerian people, and to calibrate the budget
for the good of poor Nigerians, and not for fat cats and smart Alecs who roam
around the ministries, departments and agencies. I urge the government, and
indeed all Nigerians to throw away their Nigerian eyes and look at our present
predicament with fresh eyes. It is the decades-old institution of mediocrity -
which masquerades as corruption, nepotism, greed - that we cannot see that even
other African countries have since overtaken us in their investment in HUMAN
CAPITAL. It is the stranglehold on our mental faculties that makes us want to
miss this necessary inflection point from where we could blossom into our
destiny. We should never, as Nigerians, go around just beating our chests about
being the largest economy in Africa when we know we have nothing to show for
it.
This humble request for a considerable upward review of the 2019 budget
is further premised on the need for government to for once do something
reasonable for the people of Nigeria. We have seen many decades where
governments merely care about their few mega billionaire friends. Our
governments are quicker in arranging bank bailouts and assisting mega
defaulters to stave off their bad loans. More than N6Trillion of such loans sit
in AMCON while Nigerians have become beggars in their own land. Another
$7billion (over N2Trillion) is allegedly stuck in some local and foreign banks
since 2006! We are only demanding for a little fairness.
The 2019 budget and all budgets going forward should not be budgets of
convenience and appurtenances for the 18,000 top civil servants and
politicians, but should be used clearly and succinctly to reflate and reboot
the economy, by focusing on critical sectors - security, basic public
education, environment, health, commerce, agriculture, rural and urban housing
for the poor, tourism development, incentivization of a local textile industry,
etc, so as to give Nigeria a new face globally, attract more investments
locally and internationally, and uplift the quality of human capital in
Nigeria. This is also the irreducible minimum that we must achieve so that our
country is averted from imminent implosion due to decades of systemic
mediocrity and underachievement.
The FEDERAL
GOVERNMENT, Budget N15Trillion or Nothing! Note that whether this
administration continues or another comes is immaterial as this dream basically
defines next year for Nigerians. We must learn to aim for the moon so that we
can find ourselves among the stars.

Figure 3: My projections for the economy vis-a-vis PMB
TOPE FASUA
SEPTEMBER, 2018

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