By Adisa Adeleye
The nation‘s annual Budget could be carefully captured or cynically viewed in the golden words of INCOME and EXPENDITURE.
It might not be just ‘mere estimates‘ as a national legislator carelessly noted, but it is a serious job. That many Nigerians are, as voiced by some Senators recently, were unhappy about poor implementation of the 2012 budget is a proof that the Budget is taken seriously as a sort of panacea to all the national problems.
A realistic annual budget would critically examine the structure or proposals of the last one by stating the weak points and pointing out its failures and then, unfold the good tidings embedded in its own proposals.
Thus, the 2013 Budget should be expected to fill the gaps left in 2012 and proclaim good tidings in its proposals and execution. The Expenditure of N4.92 trillion proposed in the Budget for about 162 million Nigerians, though small, could mean a lot, if faithfully implemented, a rare occurrence in the Nigerian experience during the last decade.
The beauty of a budget is evident in its structure. Some people believe in a Balanced Budget where Expenditure matches the Revenue. In such instance, the amount expended on goods and services would be equal to amounts received in taxes etc. In an inflationary environment where full employment stage had been reached, it could be necessary for the government to employ the strategy of a Budget Surplus (spending less than the amount collected). In such a situation, government expenditure is curtailed and the reduction in purchasing power would tend to reduce the pressure on prices. Also, high personal and corporate taxes would tend to affect effective demand and investments.
However, in an environment of mass employment and idle plants, which might become a recession, it is usual for a wise government to employ the strategy of a Budget Deficit. This entails spending more (expenditure) than the taxes collected (income). This results in the activity of the government pumping more money into the economy, thereby stimulating effective demand that would impact positively on plants and employment.
The objective is to encourage consumption and investment to the extent that production of goods would increase and employment would rise to the extent that full employment is reached. After this point, any increase in money supplies would cause inflation (rising prices)
The excess liquidity in the system under the administration of a budget deficit policy has always been a problem to the Central Bank in the past. For example, the 2002 budget was severely criticized by the officials of the Central Bank. The former Governor of the Central Bank, Chief Joseph Sanusi was quoted as saying that, “the full implementation of the 2002 budget as approved by the National Assembly would dampen prospects for re-establishing macro-economic stability for sustainable growth during the year. We vouched on the need to sterilize the resultant liquidity by raising interest rates”.
The Finance Minister (Adamu Ciroma) was of the opinion that “the size of deficit (N437 billion) would be larger than the conventionally acceptable level and could be inflationary, thereby negating the objective of poverty eradication”. It could be observed that the Central Bank represented by its Governor and the Executive, represented by the Minister of Finance whose responsibilities were to grow the economy, turned to be disciples of classical economists of the 1930s. Their statements at that time showed a comical misunderstanding of the progressive principles of modern economic thinking – macro-economic stability based on full industrial utilization of factors of production through stimulation of effective demand for goods and services.
It is a pity that the present Governor of the Central Bank, Sanusi Lamido Sanusi and his officials are yet to be convinced about the iniquity of mopping excess liquidity in a dormant economy with high unemployment rate.
It is observable that the 2013 budget which exhibits some elements of deficit might not fulfill its obligations if such deficit is allowed to be frittered away on recurrent expenditure only, leaving no room for infrastructural development. The capital budget takes a larger percentage than that of 2012, yet it is extra-ordinarily and disappointedly inadequate to transform the economy in an undeservedly tight monetary environment.
Unfortunately, the deficit in the 2013 budget could invoke the wrought of the Central Bank ‘classists‘.
An appeal is being made with members of the National Assembly to quickly pass the 2013 Budget after critically examining the proposals in the best interest of Nigerians. Also, the benchmark argument of the crude oil should be resolved in favor of more money being saved only for infrastructure development and not for sharing for conspicuous consumption by all the contestants. If N30.00 is saved on a barrel of crude oil and the saving is meant for the raining day and the increasing needs of infrastructural developments, then, the government‘s stand is justifiable. Any good budget is expected to be in the interest of the Nigerian people.
Do we have Nigerian people or a collection of tribalists? From recent developments, it is unfortunate but safe to conclude that there are no Nigerian people but a collection of tribes seeking individual welfare and tribal fortunes. The question is, how do you distribute the sum of N4.9 trillion among 250 tribes with lingering memories of past sad events?
Observers believe that what we need is a collection of progressive people who will use such past, but sad events, as a guide for the future.
As a columnist, I find solace in the words of Julie Ackerman link that, “Despite my best efforts to write clearly, sometimes, I‘m misunderstood. I feel bad about my failure and try to improve my skills. Occasionally, however, readers take words out of context or read into them something that bears no resemblance to the intended meaning. This is frustrating because there is no way to control how people use words once they are published”.
A prominent feature of the 2013 budget is that 80% of the earnings would come from crude oil which is mainly produced in the Niger Delta and some areas. The problem is how to implore the Ijaws to allow others to benefit from what is regarded as ‘our‘ oil under the principle of resource control.
While not being sarcastic, I think President Jonathan has more to do in uniting Nigeria than the presentation of an uninspiring 2013 budget.