Why Nigeria must change its fiscal dance steps

Eze Onyekpere(censoj@gmail.com; 08127235995)

A common Nigerian adage indicates that dance steps change as the drumbeats change and move from one tempo to another. Otherwise, the dancer will not be dancing to the beats. He would be dancing to imaginary beats playing in his head which have no semblance with reality. This is the exact scenario of Nigeria’s response to the fiscal challenges it faces as it amends extant medium-term expenditure framework and the 2020 federal budget. But the question is, is this the way to win a dance competition? This column today seeks to show that the decision of the Federal Executive Council last Wednesday can only lead Nigeria into more economic challenges.

According to the Minister of Finance, the revised budget now amounts to N10.5tn, a difference of about N71.5bn when compared to the initial approved budget. The Federal Government will fund the budget with N5.158tn; the deficit is N5.365tn which will be financed by both domestic and foreign borrowing. The implication is that we have refused to change with the times. At a time, we lost more than 40% of our revenue projections, we have only reduced spending by less than one per cent. To complicate matters, we are going to borrow to fund the lavish lifestyles of a few well-heeled Nigerians in the executive and legislature who do not want to reason by cutting their inordinate remuneration. The National Assembly may not be considering removing a kobo from their bloated estimates including the N37bn for renovation of their complex while the executive is impervious to reason. But the law states that borrowing shall be for capital expenditure or development purposes and accompanied by a cost benefit analysis. Where is the cost benefit analysis of using N37bn to refurbish the National Assembly or to allow ministers to continue living larger than life?

The Federal Executive Council through the Minister of Transportation, Rotimi Amaechi, announced gleefully how they approved the purchase of 19 Toyota vehicles at a cost of N683m for the Nigerian Ports Authority. This amounts to N35.947bn for one vehicle which is probably an SUV. This raises so many posers. How did the NPA and the FEC decide to brazenly short-circuit the procurement process and violate the provisions for competition and value for money in the Public Procurement Act? The law is clear that proposals submitted to FEC and the National Assembly for the procurement of vehicles should have been prepared with the engine capacity and specifications of the vehicles to be procured and after approval, competitive bids would have been ordered and received and the best in terms of technical and financial proposals chosen. This would have given bidders the opportunity to offer all brands that produce that engine capacity and specification and the best would have been chosen. Why this apriori breach of the law at the highest executive citadel? Why is the NPA and FEC refusing to play by the local content rules of buying Made-in-Nigerian vehicles of which there are many SUVs locally or assembled produced?

The next was the Minister of Agriculture, Sabo Nanono, excitedly announcing that he had negotiated a loan of $1.2bn for the procurement of agricultural mechanisation machines. The FEC approved the loan arrangement without thinking about the existing pile of debts that will need about 75% of all our earned revenue to pay back. Curiously, no one has given a thought as to how the money will be repaid. Just take the money, spend it and in three years, get out of the political scene or continue in another facemask and it will be the headache of someone, especially the younger generation to repay.  And he expects Nigerians, gullible as we are, to clap for him? Agricultural production is dominated by the informal sector and close to 80% of its productivity is done by small scale informal producers, processors and value addition. It generates very little revenue to government and accrues very meagre foreign exchange. So, where will the money to pay back come from?  We already have companies in Nigeria, either producing automobile engines or at least doing over 50% of it or even importing the completely knocked down parts of engines. What is the magic or obstruction that prevents these engines being coupled with backend tools for constructing farm ridges and beds, planting and harvesting add-ons, etc? It is just intellectual laziness and refusal to accept and provide leadership by persons who control our public wealth and tax money.

At a time companies in Europe, America and Asia have virtually closed down their production and supply chains and there is very little or no demand, the Nigerian Elephant comes forward to pack equipment that have found no buyer, with links to supply parts and maintenance contracts; who in his right senses will not be happy to strike such a deal?

Furthermore, the budget amendment in a time of great fiscal crisis when we are borrowing to pay salaries, and which has slashed the capital budget, will still be funding frivolities in place of the needs of Nigerian people. So, how do we develop without expending money on developmental capital and only paying for recurrent expenditure which in the Nigerian context has very low productivity? Even the little that is dedicated to capital expenditure is programmed from the start to be stolen and mismanaged. Pray, how do we account for the deliverables of these line items in the vote of the agriculture ministry: the Federal Government support for women in agribusiness in the sum of N468.3m; integrated enterpreneurship training for youths and women in agriculture for N28m; empowerment of youth and women in selected locations for N200m; strategic training for women and girls in the six geopolitical zones for N250m, etc? First, there is no location for the projects and there is nothing you can hold anyone accountable for if he simply says he wants to empower. What is empowerment if not a loose word without a clear denotative meaning.  This is not the way of progress. This is the backward movement that has held Nigeria down over the years.

In the final analysis, the national challenge is mainly that of a docile population that simply appears not to know what it wants; that fails to challenge authroity; that welcomes those who mismange their resourecs as heroes; that gives the mandate to men and women of vacous intellect, etc. The drum beats have changed; the President, Major General Muhammadu Buhari (retd.) and the Minister of Finance, need to drive Nigeria in a new direction that takes cognisance of the changed fiscal scenario.

PUNCH

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