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Nasarawa State Budget as metaphor for unrealistic state budgets

By Dele Sobowale

 

The report by Umar Muhammed disclosed that “The budget which was christened the budget of “sustainability” would be funded with resources from the Federation Account, internally generated revenue [IGR] Value Added Tax, and SURE-P.”

Commissioner Danazumi, for Local Government and Chieftaincy Affairs, who delivered the budget on behalf of ailing Governor Al-Makura, could be forgiven for not realizing that he had delivered the most unrealistic and unsustainable budget in the state’s history. But, Danazumi need not feel bad. Nasarawa state is merely following in the foot-steps of other states which had presented budgets to their States’ Houses of Assembly.

naira money  Simple arithmetic tells us that a state budgeting to spend N107.9 bn (N108 rounded up) would need to generate N9bn per month from all sources in 2015. The question is how realistic is this for Nasarawa?

To start with, SURE-P as a source of revenue has closed shop in reality. Dr Ngozi Okonjo-Iweala will soon reveal that truth to everybody. But, when the Federal budget is based on crude oil selling at $65 per barrel and the current price is under $57 per barrel, there will be no subsidy anymore. So out goes an entire revenue source from the estimates.

Value Added Tax, VAT, could be up or down from last year’s actual revenue collected depending on how much VAT rate is increased and how much is actually collected in 2015. But, with crude prices going downwards, there is every chance that the Nigerian economy might contract and VAT collection might drop.

However, SURE-P and VAT are minor variables in the budget estimates. Together they cannot account for more than fifteen per cent of the budget estimate. The bulk of the revenue expected to fund the budget of “sustainability” will come from the Federation Account, FA, and IGR. The question is: how well has Nasarawa performed in deriving revenue from IGR? The answer is: very poorly.

In an excellent report titled “States struggling to pay salaries”, DAILY TRUST reporter, Nurudeen Abdallah, on December 15, 2014, page 5, disclosed that, with the exception of Lagos, Rivers, Delta and Kano States, which generated N384.5bn, N87.9bn, N50bn and N24bn respectively, no other state got close to N25bn. Nasarawa actually achieved IGR N4.1bn in 2013. The 2014 result might not be different.

That leaves us with the revenue from FA to provide the bulk of the funds for 2015. And it is precisely on this account that the Nasarawa state budget, as well as those of other states fall apart. As things stand right now, the Nasarawa state House of Assembly will be wasting everybody’s time, raising false hopes among the people if it expects the state to raise N108bn this year. Here is the evidence.

The October 2014 allocation to states from the Federation Account, should have served as a warning to the states. All the states collected far less than they had collected in a month in more than two years. Nasarawa collected only N5bn from Abuja. That sum included FA, VAT, and SURE-P allocations. And it also included the state’s share of the Excess Crude account which will not longer be disbursed as long as crude prices remain low.

Furthermore, the FA was made from crude selling at well over $80 per barrel. The FA allocations for 2015 will be made from crude selling at $60 or less and without ECA and SURE-P funds. Certainly N9bn revenue per month can at best be regarded as a gross error, at best; or an unwarranted joke at worst.

Again, it needs to be repeated that Nasarawa is not alone in making this monumental mistake at a time when every state needs advice on how to put together a really sustainable budget.

Readily available information on other State budgets which represent the prevalent flight from reality include the following: Benue N8.5bn per month budget versus N5.2bn expected; Borno N14.8bn budget versus N7.7bn expected and Gombe N7.5bn versus N3.8bn. One cannot help wondering if ALL the state governors intend to print their own currencies to make up the shortfalls they will experience in 2015.

The Speakers of the State Houses of Assemblies and the Honourable members, if they love their people would be well-advised to put the interest of the people above partisan and selfish considerations. If budgets which cannot be implemented are passed, the people will suffer immeasurably. Civil society groups in every state should also rise to the occasion.

The states that will be destroyed through a bogus budget belong to all of us. Politicians, irrespective of political party should not be allowed to bring unprecedented civil unrest nationwide on all of us.

NEXT: FOR HOW LONG WILL THE COUNCIL OF STATES REMAIN SILENT?

The Council of States includes all former Heads of State alive – Obasanjo, Shagari, Buhari, Babangida, Shonekan, Abubakar and Obasanjo again. For how long will they keep quiet while the nation sinks? For once silence is not gold; it is either acquiescence or cowardice. Both are unbecoming of Elder Statesmen….

 

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