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Who will tell the President?

By Dele Sobowale

Those who do not remember the past are condemned to repeat it. — George Santayana, 1863-1952, Vanguard Book of Quotations 

AS July comes to an end, Nigeria is getting set to repeat a recent unpleasant history. When in 2015 President Buhari failed to appoint ministers until October, he was warned on these pages about the economic consequences. A recession followed in 2016.

President Buhari,
BUHARI

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Today, over five months after his re-election, ministers are still not appointed. At least five presidents or prime ministers elected after him have appointed their ministers. Is there something Buhari knows that the others don’t?

Permit me, therefore, to repeat myself as a way of reminding the president that poverty is not always an accident; it derives from the actions of national leaders. What follows was written last year before the World Poverty Clock declared Nigeria the new poverty capital of the world. 

How governments create poverty in Nigeria.        

FG releases N460b for capital budget—News report, October 11, 2018.

The report went on to state that “Fielding questions on capital (budget) releases Sen. Udoma said: “The amount of capital releases as at today [October 10, 2018] is N460b. We just need a resolution of the National Assembly on the Borrowing Plan; then we can fund it more.”

Udoma Udo Udoma was one minister who never stated an absolute falsehood. But, he is also a team player and a lawyer. So he made a true declaration without disclosing all the facts that might be embarrassing to the Federal Government — leaving it up to those who can read between the lines to fill in the gaps themselves. He will never be accused of giving comfort to the “enemies” of government or of lying by the opposition. So, he released the barefaced facts and nothing more.

Unfortunately, the statement left many disturbing unadorned disclosures unmentioned. Those concealed are not only more important than what he said, they will determine the fate of the 2018 Budget which was a disaster from the beginning.

Readers need to be reminded that the budget presented to the National Assembly, NASS, in early December 2017 was not passed by the National Assembly until June 2018. That was a record which should be embarrassing to any government and the NASS which, on paper, was under the same political party.

Experienced financial analysts know that once the passage of a budget is delayed for so long, a great deal of its impact on economic growth is automatically lost. Close to half of the year was squandered between the Executive and Legislative branches of the Nigerian government.

For a country which experienced a recession in 2016 and made only a mild recovery (0.8 per cent in 2017), the delay was totally inexcusable and it was bound to result in one of the consequences just announced by the Minister of Budget and National Planning. Most, if not all projects slated for early in the year will have to be postponed and the funds for them would not be released on time.

Capital expenditure is vital because it addresses the gargantuan needs for infrastructure in this country and it puts funds in the pockets of contractors which eventually trickle down to the local markets and stimulate consumption.

Capital expenditure budget was N2.4 trillion in the 2018 appropriation. For only N460 billion or a mere 19 per cent to have been released in mid October and for government to still be waiting for NASS approval of its Borrowing Plan can mean only one thing; the 2018 budget has failed even with two and a half months to go. Nothing done now can salvage it. That explains why the Central Bank of Nigeria has been raising alarm — ignored by the FG and NASS — that the country risks another recession.

Every economist knows that an economic recession creates an army of newly poor people, increasing the number of those already mired in poverty. Even low growth compared with population growth increases the number of people classified as destitute. The minister did not state it. But, unmistakable to any economist worth his salt is the undisclosed fact that the nation is going to create more people living below the poverty line by December 31, 2018.

Predictably, more Nigerians dived below the poverty line by December. The nation is well on course to repeat the same sad experience in 2019 with the President’s delay in appointing ministers.

Even if he reappoints all of his former ministers today, each of them will find waiting for him a mountain of files waiting and demanding urgent attention. Haste makes waste. The hurried approval of proposals leads to the situation a former minister  finds himself in now. Most probably, most of the ministers will be new to their assignments. They will spend the rest of the year just getting familiar with their departments and agencies.

The year is already gone for any meaningful contribution from them. Meanwhile, they will also be required to write their ministries’ budgets as well as the Medium Term Expenditure Framework, MTEF. Failure on a massive scale is assured.

When the President in his address on June 12, mentioned that Nigeria could lift 100 million out of poverty in ten years under a purposeful leader, he mentioned three countries which did it — China, India and Indonesia. What he failed to say was as significant as what he said. Unless the words “purposeful” and “leader” have lost their ordinary meanings in the dictionary, then those countries can be judged to have purposeful leaders while Nigeria has lacked them since 1999.

In none of those countries would 19 per cent of the capital budget be released in the tenth month of the year; neither would Chinese leaders deliver 60 per cent of the revenue estimate and announce that they have delivered on their promises as our leaders in Nigeria do.

Instead of lifting 10 million out of the bottomless pit of poverty in 2019, the Federal Government, leading the state governments, will shove more Nigerians into it. You can bet on it; when the World Poverty Clock, as well as other global study groups, release their annual report again later this year, Nigeria would have added more people to last year’s figure. Our governments, led by the Federal Government, would have worked for our retention of that title.

The only way to reverse the growing poverty is to start by taking budgets seriously; meaning implementing 12 months’ budget in 12 months instead of three or four months as we are doing now. But, who will tell the President?

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