Only half a budget
HIGHLIGHTS of the 2016 Appropriations estimates as presented to the joint-session of the National Assembly by President Muhammadu Buhari on December 22, 2015 provided merely a fraction of the facts and figures concerned Nigerians had curiously awaited; what’s more, the presented fraction happens to be the less-interesting of routine part of the national budget.
According to the president, total budget estimates for 2016 stands at N6.08 trillion. The budget preparers envisage crude oil prices to hover around $40 per barrel; revenue from crude oil sales is estimated at N820 billion, at 2.2 million barrels per day production output, and naira exchange rate of 190 to the US dollar. Non-oil revenues comprising corporate tax; value added tax; customs and excise duties; and federation account levies; and independent sources, etc are estimated at N2.96 trillion.
We are told the 2016 budget seeks to stimulate the economy, make it more competitive by focusing on infrastructural development with the ultimate goal of assisting industry, commerce, and investment, all of which is expected to address the lingering challenges of youth unemployment and extreme poverty in Nigeria.
The All Progressives Congress (APC) Federal Government couldn’t have aspired to deliver less to long-suffering Nigerians; what with the prostrate state of the economy and APC presidential election promise to change the fortunes of Nigeria for the better. However, going by the available facts on the 2016 Appropriations estimates, the Federal Government appears a giant in aspirations but a seeming timid midget in practice. To be sure, having regard to the country’s much-talked about infrastructural decay and deficit, Nigeria would need much more than the paltry N1.82 trillion (30%) that has been earmarked for capital expenditure in 2016.
The pace of vehicular movements in the two coastal cities (Lagos and Port Harcourt) with the country’s most important air and seaports are unacceptably slow and prohibitively costly. Rail tracks for cost-effective up-country transportation of goods from these ports are virtually no-existent; add to these the 10,000 megawatts of electricity, which Nigerians have been promised, it would then become all too obvious to even the least informed that massive infrastructural development is what Nigeria desperately needs, going forward.
Thinking about the financial implications of massive infrastructural projects caused me to take a closer look at the projected revenues in the 2016 budget estimates. The budget didn’t capture the expected revenues from petroleum gas. This is a significant omission for a number of reasons: Nigeria has the third largest deposits of petroleum gas in the world; the world is rapidly switching from petroleum oil to petroleum gas for energy generation; Nigeria’s revenues from gas is therefore expected to exceed those from oil in the near future; and, the president is the current minister of petroleum resources(?) Indeed, what’s Nigeria’s extant aggregate annual revenue from petroleum gas? What does that aggregate represent in relation to global market? What is our projected growth rate in market share for petroleum gas in the current National Rolling Plan? The National Assembly should call for a comprehensive financial information on Nigeria’s petroleum gas deals.
President Buhari would seem to agree with this argument; hear him : “…so to the investors, business owners, and industrialists, we are aware of your pains. To the farmers, traders, and entrepreneurs, we also hear you. The status quo cannot continue… The artificial current demand will stop…”
Therefore, it is safe to conclude that the other half and more interesting facts and figures of the 2016 budget is yet to come. Hopefully, the latter half would make 2016 a Happy Year for long-suffering Nigerians.
• Nkemdiche is an engineering consultant in Abuja.