Hello there
I see in your other question that you are asking about whether core
objectives have been met. I'm sure you will find that some of what is
here will overlap that and part of the answer to the other question
should overlap here as well.
First of all, I will try to keep this objective and not attempt to
draw any moral or philosophical position. There will be statements
supporting and against all sides. The final judgement as to whether
things are good or bad is up to you.
We should perhaps begin with the claim that the 2002 Nigerian budget
is something different than anything in the past. well, in one major
way, it certainly was. Nigeria is the sixth largest oil producer in
the world. The price of crude oil, the mainstay of the Nigerian
economy, which accounts for more than 90% of itsannual income, has
crashed. The budget proposed for 2002 is 30% less than the 2001
budget. The external debt burden simply makes Nigeria's problems
worse.
"...that the 2002 budget was a marked departure from those of previous
years both in focus and procedure, suggesting that the committees
carried out the widest possible consultation...Variously called
"Investing in the Future" and the "People's Budget," the thrust of the
capital budget was the capacity building needs of the country and
those critical social and security sectors that had been neglected in
the past." - quote from AllAfrica.com -
http://allafrica.com/stories/200203270044.html
The above webpage is a news article about the Nigerian budget posted
in "This Day" March 27, 2002. You will also find the figures
allocated for major expenditures and what they hoped to accomplish.
A breakdown of those figures are as follows: - - all figures are in
naira rather than dollars.
The overall budget was N1,064,801,253,520 (one trillion, sixty-four
billion, eight hundred and one million, two hundred and fifty
thousand, five hundred and twenty naira)
Of this, the legislature reserved N587,096,146,413 (five hundred and
seventy-eight billion, ninety-six million, one hundred and forty-six
thousand, four hundred and thirteen naira) for recurrent expenditure,
including N134 billion for domestic debt servicing, while
N486,705,107,107 (four hundred and eighty-six billion, seven hundred
and five million, one hundred and seven thousand, one hundred and
seven naira) was for capital expenditure."
Other major expenditures included:
Water Resources (N72,573,464,000)
Works and Housing (N71,400,000,000)
Power and Steel (N6,442,500,000)
FCT (N46,265,597,000)
Education (N22,10,000,000)
Health (N19,774,453,900)
Transport (N17,444,426,600),
Defense (N14,500,000,000)
Sports (including the Abuja stadium) (N14,033,401,000)
Agriculture (N12,603,419,000)
INEC (N10,000,000,000).
The sum of N2 billion was allocated for priority projects of the
Nigerian National Petroleum Corporation (NNPC).
The budget seemed to pay special attention to "education, as a major
priority, followed by the security services."
The police force in particular was the recipient of government
generosity with increased executive subvention of N8 billion, out of
which N6 billion was directed at personnel cost and N2 billion as
additional overheads. ""We hope that this additional subvention will
encourage the police to improve on the security of the nation," the
Udoma report said. In addition, N4 billion was recommended for the
renovation of military and police barracks...Next to the police, the
recurrent budget of the Prisons Service was increased by N2 billion to
enable the payment of arrears of salaries. An additional N3.75 billion
was also provided to cater for the increase of the allowances of NYSC
members. N2.1 billion was made available for the overhead costs
associated with preparations for the All Africa Games. - quote from
same source as above.
It would also seem that one of the surprises in the budget was related
to science and technology which received N6 billion above proposal.
Now as for the budgets economic relevance to all factors of national
development, I fear we will be crossing into some of the information
you wanted in your other question. The reason being that in order to
estimate what the economic relevance was and is, we need to go into
the effectivness, or lack of it, in the progress of the core programs.
Just as in any other part of the world, things are easier said than
done.
The Nigerian national budgets of the last ten years have retained
certain common goals and policies, namely:
1 - Alleviate poverty by fostering opportunities for job creation
2 - Achieve high economic growth through better mobilisation and
prudent use of economic resources
3 - Build a strong economy by encouraging private sector participation
4 - Ensure good governance by transforming development administration
intoa service and result-oriented system.
Here we need to go back a year from 2002 to 2001. In 2001, 414
billion was budgeted capital spending, only the first quarter
allocation was actually disbursed; in the secondquarter only 50%
disbursement was recorded. In the 2002 budget, capital expenditures
were cut drastically. This suggests some fear that capital spending
will cause inflation. The Nigerian government has apparently chosen to
sacrifice expansion of the economy and jobs in order to try and
control inflation. This is very shortsighted, ( a personal opinion)
because a lot of unproductive spending has been moved over to
personnel, defence, the presidency and the National Identity Card
Project. The spector of uncontrolled inflation seems better than ever.
(I know I shouldn't editorialize, but some things just jump out.)
While the goals cannot be faulted, the means for their achievement,
that is the budgetary allocations, give us quite a different picture.
Good intentions could not be matched with actions because the economy
of Nigeria, during the period under reference, has remained comatose.
The value of the national currency, the naira, has been declining.
When the civilian administration of President Olusegun Obasanjo came
to power in 1999, the exchange ratewas NGN 85 to USD 1. Two years
later in 2001, the naira had so depreciated that USD 1 could buy NGN
114.50 in the official markets and NGN 138 in the parallel market
The economy is currently characterised by a modest inflation rate,
high interest rates (tight money), low capacity utilisation and
embarrassingly high unemployment. The economy needs expansionary
policies to stimulate economic growth and generate new jobs. But the
2002 budget proposed a whopping 38% cut in capital expenditures from
the 2001 level. Add this to huge allocations of 49.6 billion to a
peace time army, 28.4 billion to the presidency, and 10 billion to the
National Identity Card Project, all of which are unproductive sectors,
and the following questions arise: how much real investment does
Nigeria have, what will be the source of economic growth,and where
will new jobs come from?
One of the major problems with answering this particular question is
caused by the politicians of Nigeria themselves. What statements
about the use of budgetary funds are true and what are made up on the
spur of the moment. As an example:
"...the Minister of Finance told members of the National Assembly that
he had disbursed 80% of allocated funds, and a few minutes later told
National Assembly correspondents that he had disbursed only 58% of
these funds. In the same vein, the figures he released as
disbursements to the ministries differed substantially from what the
ministries acknowledged having received. Also, the records of the
National Assembly showed that allocations to the Ministry of Works and
Housing stood at NGN 94 billion, while the minister's record spoke of
NGN 74 billion. If ordinary budget allocation figures are in doubt,
what about the revenues? Is it really possible in this climate of
uncertainty to know exactly how much revenue the government collects?
This is the crux of the problem: lack of transparency. The seeming
confusion creates room for misapplication of funds; call it
embezzlement if you will." - That quote from "The Economy in a Comma"
by Ray O. Nyegu, Basil U. Gochukwu, Shola A. Kinbode and Josephine C.
Hukwuma.
Another quote from the same source: - - "The greatest betrayal of the
Nigerian people in the proposed 2002 budget is in allocations to the
agricultural sector. Though Nigerian agriculture has been neglected
and is in dire straits, it still contributes the lion's share to
employment and the GDP (33%). Since one of the cardinal objectives of
the2002 budget is the alleviation of poverty, one would have expected
the allocation to agriculture to reflect this intention. Instead, we
find the allocation to agriculture to be a paltry NGN 3.8 billion,
about one-third of what is allocated to that white elephant that
endless watering hole the National Identity Card Project, which is
of no use to hungry Nigerians.To further signal to poor Nigerians that
they will have no respite come2002, the government now intends to sell
crude petroleum to NNPC.3at the international price of USD18 per
barrel. That means that, come 2002, Nigerians should be ready to
swallow a pump price of about NGN 40 per litre.In the face of all
this, what poverty are we alleviating?. The fear of capital spending
shows an inclination towards a "monetarist" economic view. As human
rights advocates, we really have no problem in choosing sides in the
welfarist-monetarist divide. It is simply a matter of equity that
people should have jobs ;inflation can be contained."
Now I began this by saying I would not take a stand and would leave
the judgement as to whether thngs were good or bad up to you. I'm
going to let that statement stand. However, I doubt if I will be
honoring it. Because after having researched this information, I'm
sorry, but a stand is unavoidable.
Why? After the National Assembly goes through all the motions of
debating and passing bills, the executive branch dumps them and
implements the budget as it pleases. For instance, instead of NGN 20.5
billion allocation for defence in the 2001 budget, the executive
branch disbursed NGN 31.4 billion. In other cases, less than 50% of
allocated funds were disbursed. It happened in 2000, it happened in
2001, and it happened again in 2002. Why? If budgeted revenues are not
realised, or if government is afraid that it might worsen the
liquidity crisis, the National Assembly should be informed.
There are other factors which relate back to this budget and the
controversy surrounding the Nigerian economy. to cover one of them,
rather than writing the whole thing out again, I will refer you back
to another of my answers:
http://answers.google.com/answers/main?cmd=threadview&id=215270 -
which deals with Nasir Ahmad El-Rufai, director-general, Bureau of
Public Enterprises. While it is not directly connected with this
question, it can give some additional insights as to what is happening
in Nigeria.
Any "superficial" analysis of the 2002 Nigerian budget will pretty
much lead to the same conclusion. The budget was irrelevant to most
aspects of Nigerian development other than to hinder it due to the
machinations of the political establishment.
Any "real" analysis is pretty much out of the question in this kind of
format due to the fact the Nigerians themselves have no idea of what
they are spending, where or how, as exemplified by the various figures
given by the Minister of Finances to differing government agencies.
There are no figures that can be trusted enough to build anything on.
It would seem that 'relevancy' would depend on which Nigerian official
you were talking to and what his/her mood was at the time.
In fact, the uncertainty involved has led to an attempt at impeachment
of the Nigerian president as an outcome of the 2002 budget. "However,
while the House of Representatives in particular which initiated
impeachment process against the president and the National Assembly in
general have stayed action on the issue as demanded by Gowon and
Shagari, the president has up till now not acted in consonance with
the agreements reached at the meeting under reference. He, instead,
continuously seeks to explain his actions which have already been
established as unconstitutional." Due to the amount of information, I
am going to send you to the webpage rather than try to duplicate it
here:
http://allafrica.com/stories/200211220175.html - AllAfrica.com -
"Impeachment Truce: Obasanjo Backslides"
The following sources were used to compose the above:
AllAfrica.com - http://allafrica.com/stories/200203270044.html
http://www.gasandoil.com/goc/company/cna25030.htm - "Alexander's Gas &
Oil Connections - NNPC seeks fund to pay cash"
http://www.lists.kabissa.org/lists/archives/public/womenseconomicrights-conference/msg00045.html
- This is a website about women's rights in Nigeria. It covers a
conference in 2001 relating to what needed to be done in the future.
Regardless of the posturing of the Nigerian government, it would seem
none of these issues were directly addressed in the 2002 budget, or if
they were, were promptly forgotten. The information contained here
relates directly to the aspect of your question dealing with relevancy
to social issues. I recommend you read it as it is an integral part
of the answer. There is too much to quote and paraphrasing is a sure
way to losing the original meaning.
http://www.newswatchngr.com/editorial/allaccess/2002/01042002/biz10404125048.htm
- "Now the Grass Suffers" - an online editorial from Newswatch - "The
face-off between the House of Representatives and the presidency had
worsened the situation because the members of the house had stopped
deliberations on the budget for most part of February. This had
crippled the nation’s economy." - another website which is an integral
part of the answer. You will find that the late passage of the budget
was an economic disaster for Nigeria. Another direct response to the
relevancy of the 2002 budget on Nigerian national development. Once
again too much to quote or paraphrase. I am not trying to shortcut
things, it is just that there is a limit on how much material we are
'allowed' to quote in our answers.
http://english.pravda.ru/comp/2002/05/06/28257.html - Even the Russian
Newspaper "Pravda" has a little to say, though the content is
politically rather neutral.
http://www.thisdayonline.com/archive/2002/06/18/20020618news02.html -
"Budget 2002: Ciroma, Kpakol Meet on Implementation" Here you will
learn about some of the inflation fears I mentioned earlier:
""inflation which had looked menacing late last year is under control,
as food prices continue to go down." He cited that in April, food
inflation dropped to 14 per cent from 25 per cent in March." That in
itself is a relevance of the 2002 budget, but not a lasting one.
Search - Google
Terms - nigeria, nigeria budget 2002, nigerian economic politics,
nigerian economic factors, nigerian social economics
If I may clarify anything, please ask before rating the answer.
Cheers
digsalot |
