The 2016 budget of the Federal Government which President Muhammadu Buhari unveiled before the National Assembly last week differs in two respects, I think, from other budgets in the last ten years. The first one is there is tangible evidence that the Presidency set out its priorities, devoted huge chunks of the budget to these priority programs and projects and then allowed civil servants to fill in the gaps with recurrent expenditure.
This was why for the first time in many years a Federal budget bucked the trend whereby recurrent expenditure was on its way to gobbling up the entire budget. In previous years when the Presidency conceived few, if any priority programs, civil servants filled the budget gaps with items such as more vehicles, bigger standby generators, more banquet halls, huge headquarters buildings and more state offices.
This budget is also different because it reflects Buhari’s deep concern for the poor Nigerians. Maybe he is not a political reincarnation of Mother Theresa but Buhari is deeply aware that this is the group that returned him to power thirty years after his military colleagues kicked him out of the top job. Moreover, the poor stood by him when he lacked all the traditional factors of political power namely money, elite support, oratorical skills, organisational ability, theatrical abilities or even cheerfulness. All he had going for him was a reputation for incorruptibility, which PDP suddenly made very attractive by the scale of its corruption.
Buhari’s concern for the poor is apparent not only from the projects included in this budget but also from the key budget decision he tried to shy away from, namely fuel price deregulation. Buhari is not ready to tackle this issue head on because it is the kind of issue that can break his standing with the masses overnight. Nigerians feel deeply about fuel prices and Buhari, who listens to the BBC Hausa Service every morning, is not ready to cross swords with them on this matter.
Even though the president said during his budget presentation that he will make tough decisions in 2016, his body language and that of his top oil aide Ibe Kachikwu shows they are facing a major dilemma. Looking over his shoulders at the poor, Buhari shied away from taking the toughest of tough decisions on fuel subsidy. Early December Kachikwu hinted at an end to subsidies; Buhari announced that petrol price will remain at N87 a litre; Kachikwu later said it will actually drop to N85 but that subsidies will be removed.
Kachikwu obviously expected Nigerians to cheer the news about N85 fuel price but how can we? For most of 2015 when fuel is supposed to sell for N87 a litre, few Nigerians got to buy it at that price. For at least half of this year marketers refused to sell fuel at the official price, saying government did not pay them their subsidy arrears. Right now fuel sells for as much as N325 a litre in some states so if Kachikwu says he approved a PPPRA template that fixes the price at N85, where is the guarantee that marketers will make it available at that price?
The main basis for the N85 price template is that international oil prices have sunk to $31 a barrel. Who said that will deter Nigerian oil marketers from claiming subsidy? During the Jonathan years, APC leaders clearly believed that the more than N1 trillion spent on fuel subsidy was mostly stolen. They also believed that Buhari’s very presence on the president’s chair will deter the thieves. It did not appear to have done so because Kachikwu said we spent N1 trillion this year on subsidies. One of two things happened; either money was NOT being stolen from the subsidy fund under Jonathan or, much more likely, it is still being stolen under Buhari’s watch. What experts are calling for is fuel price deregulation. As long as government fixes fuel prices based on any templates, we are not through with fraud, periodic cyclical blackmail and fuel queues.
On the brighter side, the 2016 budget has completely reversed the trend of previous Nigerian budgets by going out of its way to introduce a raft of social welfare programs for the poor. Five of them stand out: employing half a million teachers for primary schools; feeding school pupils [with milk, according to Agriculture Minister Audu Ogbeh]; conditional cash transfer to the poorest and most vulnerable; a training and loan program for small scale entrepreneurs and a post-NYSC loan scheme. If these programs succeed, they will change the face of Nigeria forever and will give Buhari a Hugo Chavez-like standing in poor people’s minds.
But there are three visible problems. The first one is timing. If Buhari had come to power in 2003, 2007 or even in 2011 he would have inherited a very liquid treasury with which to bankroll these social programs. Right now however, the federal and all state government treasuries are gasping for air. During his first coming in 1983, Buhari went about the salvation task by unrolling tough measures that aggravated the poor man’s suffering. This time he is a totally changed man and is determined to be the poor man’s champion. Trouble is, he has to borrow a lot of money in order to help the poor, a kind of 21st Century Robin Hood.
Then there is this thing called executive capacity. If Buhari is going to rely on the federal bureaucracy to implement these social programs, I can already see a problem. No disrespect intended but today’s civil servants at all levels see every government program or project as an opportunity to line their own pockets. Money is stolen from weapons purchases, from payrolls, from police welfare funds, from hospital drugs, from school books, from foreign aid and even from pensions. Many civil servants will not bat an eyelid to steal money meant for conditional cash transfer or school feeding. If the president can find another agency to implement these programs, wallahi let him try it.
Added to these is the misfortune that most of these programs have not yet been fully designed at this stage. Many people are asking, who are the poorest and neediest Nigerians and how many are they? To set aside N500 billion when this calculation has not been done is to invite trouble, simply. This is the real opportunity cost of President Buhari taking many months to constitute a cabinet. Precious time required to design programs has been lost.
Employing half a million teachers could make a small dent in this country’s army of unemployed youths. It remains to be seen however if it will help the schools very much. The new “teachers” may have the knowledge of their subject areas but most of the unemployed graduates are neither qualified to teach nor are they interesting in teaching. Many youths take up teaching jobs as a stop gap measure while they search for “better” jobs. As a jobs creation measure, mass recruitment of teachers is not as promising in the long term as a program to revive this country’s ailing manufacturing sector. Such a program will however take years to bear fruit and may not bring political dividends before 2019, for instance.