The Shenanigans in Budget 2020 -By Yemi Adebowale

Aggregate revenue available to fund the phony 2020 federal budget is projected at N8.155 trillion. N2.45 trillion of this expected revenue will be used for debt servicing in 2020. This is almost 30 per cent of target revenue. It is just one of the numerous shenanigans contained in our dear country’s budget 2020. Nigeria’s revenue to debt ratio is evidently horrendous. No country can attain development with this kind of arrangement.

The N2.45 trillion set aside for debt servicing is more than the N2.14 trillion for the entire capital expenditure in the budget, yet, the country is sinking deeper into debt. The last four years have been awful. It is so sad to note that the nation’s total public debt rose by N3.32 trillion in one year (June 2018 to June 2019) to N25.7 trillion as at the end of June 2019. The federal government owes N20.42 trillion of the debt, while the 36 states and the Federal Capital Territory have a total debt portfolio of N5.28 trillion. The amount set aside for debt servicing by all levels of government will continue to rise annually.

The federal government admits that it is having challenges servicing its huge debt; yet, it is talking about taking another $3 billion loan from the World Bank, saying the money would be used to finance the power sector. This is a big contradiction.

As expected, debt servicing and recurrent expenditure crowded capital expenditure in budget 2020 of the federal government. Of the N10.33 trillion budget for next year, recurrent (non-debt) spending is expected to total N4.88 trillion. Personnel cost alone will gulp over N3 trillion. Capital expenditure, as a percentage of the N10.33 trillion budget is just about 24 per cent. The capital allocations are laughable. In a country brought to its knees by Boko Haram, defence will get a paltry N99.87 billion as capital vote. So, how will the military acquire modern equipment to tackle the terrorists?

In this same budget where so many sectors got paltry allocations, the National Assembly was awarded an atrocious N125 billion. Each senator will continue to smile home with N14.2 million monthly. Those in the House of Representatives will each continue with N9.1 million monthly. This is happening in a country where millions go to bed without meals and wake up not sure of breakfast.

The amount set aside for petrol subsidy is dreadful. This government now dubiously calls it under-recovery. In budget 2020, petrol subsidy will gulp N450 billion. This is more than the capital allocations of three ministries put together – Ministry of Education (N162.74 billion); Ministry of Power (N127.67 billion) and Ministry of Transport (N123.07 billion). What a country!

Our money-guzzling Presidential Air Fleet (PAF) will gulp over N7 billion – precisely N7,297,022,065 – amid outcry by traumatised Nigerians about the high cost of maintaining the 10 aircraft in the fleet. The additional things this time are mandatory upgrade and installation of live television on one of the aircraft at N792 million while N50 million would be expended on compliance with mandatory upgrade and installation of internet service on another one. The avowals by President Buhari to cut the cost of maintaining the fleet by reducing the number of aircraft remains empty promises.

The huge amount budgeted for the purchase and maintenance of power generators in the 2020 budget mocks the persistent statement by the government that power supply had improved in the country. The truth they are running away from is that Ministries, Departments and Agencies still rely largely on power generators in their offices. This is why the federal government plans to spend N9.05 billion on the purchase, maintenance and fuelling of power generators in Aso Rock Villa and the MDAs. Generators may gulp as high as N20 billion in 2020 by the time budgets details of Departments and Agencies not included in the federal budget emerge.

Back to the issue of binge borrowing by the Buhari government, the warning on Wednesday by the IMF to Nigeria and other countries about mounting debt to China is apropos. IMF stressed that the non-Paris Club creditors create some instability or some vulnerabilities.  The bulk of the foreign loans obtained by the Buhari government are from China. Those managing our economy must spend quality time reading the IMF caution.

The words of wisdom of Patricia Scotland, Secretary-General of Commonwealth on binge borrowing would also be useful to the managers of Nigeria’s economy. She stated: “In a country where fiscal regulation is weak, debt may be accumulated in ways that are not transparent, and very seriously to the detriment of its citizens… With interest rates at historically low levels, borrowing becomes an attractive proposition yet heightens the concomitant risk of debt ballooning to levels which are unsustainable over the longer term. This situation raises the possibility that countries which have ‘borrowed their way out of trouble’ following a setback will eventually face very severe debt distress.”