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Editorial

The mirage of fiscal renewal in Nigeria’s 2024 budget

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The unveiling of Nigeria’s 2024 budget by President Bola Tinubu was anticipated with a mix of hope and skepticism.

The hope was that the new administration would pivot from the fiscal imprudence that has characterised the nation’s budgeting for decades.

The skepticism stemmed from a history of unfulfilled promises and economic plans that have often sounded more impressive on paper than in practice. Unfortunately, the skepticism seems warranted as the N27.5 trillion budget proposal for 2024, dubbed the ‘Budget of Renewed Hope,’ falls short of the transformative fiscal recalibration that was promised.

At first glance, the budget’s title suggests a fresh start, a breakaway from the past. However, a closer examination reveals a continuation of the same old patterns: “envelope” budgeting, precarious funding assumptions, a bloated recurrent expenditure, a modest capital outlay, a substantial deficit, and an increasing debt burden.

This is not the bold overhaul that Nigerians were promised, but rather a reiteration of the uninspiring fiscal practices of the past two decades.

President Tinubu’s speech to the National Assembly painted an optimistic picture, one where the budget would lay the groundwork for macroeconomic stability, reduce the deficit, and increase capital spending in line with the administration’s priorities. Yet, the reality of the figures tells a different story.

The allocation of N9.92 trillion for non-debt recurrent expenses and N8.25 trillion for debt servicing—which alone consumes a staggering 45 percent of the total budget—signals a continuation of the government’s preference for consumption over investment.

This approach does little to inspire confidence in the budget’s potential to stimulate economic growth or alleviate poverty.Moreover, the projected deficit of N9.18 trillion, which represents 3.88 percent of GDP, though a reduction from the previous year’s 6.11 percent, still underscores a reliance on borrowing.

The planned new borrowings of N7.83 trillion, along with the anticipated N1.05 trillion drawdown on multilateral and bilateral loans, further entrench Nigeria’s precarious revenue position. The expected N298.49 billion from privatisation proceeds is not only insignificant in the grand scheme but also highly speculative, given the government’s historical reluctance to privatize.

The budget reiterates lofty goals such as fostering “job-rich” growth, improving investment stability, and enhancing human capital development. Yet, without a significant shift in the allocation towards capital expenditure and a realistic plan for revenue generation, these objectives seem more aspirational than achievable.

The heavy lean on debt servicing casts a long shadow over the prospects of meeting these goals, as it leaves little room for the necessary investments in infrastructure, education, and healthcare that are critical for sustainable development.

The ‘Budget of Renewed Hope’ was an opportunity for President Tinubu’s administration to demonstrate a commitment to changing the narrative of Nigeria’s economic management. It was a chance to present a budget that would not only reflect the current economic realities but also chart a clear path towards fiscal sustainability and inclusive growth.

Unfortunately, the 2024 budget proposal, as it stands, is a missed opportunity. It is a whimper in the face of Nigeria’s economic challenges, not the bang that was needed to jolt the economy towards a new trajectory.

As the National Assembly deliberates on this budget, it is imperative that lawmakers critically assess the proposed allocations and assumptions. They must push for a more balanced budget that prioritizes capital expenditure and addresses the revenue challenges head-on. It is only through such rigorous scrutiny and a willingness to make tough decisions that Nigeria can hope to achieve the macroeconomic stability and growth that the government so optimistically promises..

Nigeria’s recently announced 2022 budget has been met with criticism from experts who have raised concerns over its assumptions and allocation of funds.

The budget assumes an average oil price of $77.96 per barrel, which is precarious given that prices have averaged $74.38 on Friday.

Additionally, the estimated oil production of 1.78 million barrels per day is questionable, with production averaging 1.35mbpd this year. With 400,000bpd stolen and OPEC seeking to cut production to boost prices, the output target appears unrealistic.

Furthermore, the national budget is still overly dependent on oil and gas revenues. Other assumptions, such as inflation at 21.4 per cent and debt servicing, also raise questions. Inflation rose to 27.3 per cent in October, fuelled by high energy prices, rocketing naira exchange rates and runaway food prices.

The government’s spending over 90 per cent of its revenue on debt-servicing, and still borrowing at breakneck pace, means its deficits and borrowings could eventually exceed estimates. Experts describe annual budgets as an “important instrument of national resource mobilisation, allocation and economic management”.

However, this budget is largely more of the same annual fare, sustaining high recurrent spending. The N1.32 trillion or 5.0 per cent infrastructure vote falls short of the $1.5 billion required under the Reviewed Integrated Infrastructure Master Plan.

The social sectors, primarily education and health, which combined are allotted 12.5 per cent, continue to get short thrift.

This contradicts Tinubu’s electoral promise to allocate at least 10 per cent to health, and the 15 per cent combined agreed for health and education by African countries in 2010. Overall, the budget has been criticised for its assumptions and allocation of funds, which could hinder economic development.

Editorial

Endless turnaround maintenance of Port Harcourt Refinery

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Since 2021 when the turnaround maintenance of the Port Harcourt Refinery started, there have been heaps of failed promises of the production commencement date.

First, it was former Minister of State for Petroleum, Timipre Sylva promising severally of commencement of productions of Port Harcourt Refinery, but these promises never came to limelight till he resigned for political calling.

Next was the Managing Director of Port Harcourt Refinery, Ahmed Dikko who at a time said the turnaround maintenance was 98 percent completed and would have commenced operations in December 2023. That promise again was unfulfilled.

The Group Managing Director of Nigerian National Petroleum Company Limited (NNPC Ltd), Mele Kyari equally said that Port Harcourt Refinery would start production in two weeks time, that elapsed in April, 2024. April has come and gone.

The Head, Corporate Communications of NNPC Ltd, Olufemi Soneye was also quoted to have said that the reason for non-commencement of operations of the Port Harcourt Refinery was regulatory and compliance tests. As it seems, all efforts to restart the operations of the Port Harcourt Refinery and by extension other refineries, have been futile.

Political watchers have adduced poor management, corruption, sabotage and lack of political will as some of the problems confronting smooth operations of our refineries. They particularly accused those benefitting from importation of petroleum products as being responsible for the non-functionality of the four refineries in Nigeria.

Political will, of course, plays a major role in shaping directions the policies go. Political will in this instance translates to good leadership, and in this case, the buck stops at the table of the Federal Government, particularly the President, who doubles as the Minister of Petroleum.

Petroleum being the mainstay of the country’s economy should be given all the attention it deserves. The reason being that virtually everything in the country is tied to the petroleum products situation.

Since the announcement of the removal of fuel subsidy on May 29th, 2023 by President Tinubu on assumption of office, life has not been the same in Nigeria. Cost of living has  risen astronomically, consequent upon the hike in price of petroleum products.

In the midst of plenty, courtesy of the abundant human and material resources, Nigeria is still often described as the poverty capital of the world. What an irony! Turnaround maintenance of the refineries subsists without end. Every hope is now placed on the Dangote Refinery, a private outfit. While the diesel price slash is commendable, how on earth will a single private entity take the whole country to Eldorado?

We cannot regulate what we do not produce, this is a natural principle that cannot be contravened. We only pray that Port Harcourt Refinery comes on stream someday.

We look forward to that time. Our position is that Government agencies saddled with the responsibility of providing fuel and other petroleum products to Nigeria must do their work and justify their pay.

This onerous task is mandatory and statutory to them and shall amount to disservice if they fail. Our prayer is not for them to fail, but that they fulfil their vows and make the country great for the overall interest of all.

Tecnimont, the Italian company undertaking the $1.5 billion rehabilitation project of the Port Harcourt Refinery has through its Local Managing Director, Gian Fabio Del Cioppo pledged to fulfil the terms of contract, so as far as we are concerned, there is nothing stopping the country from achieving the target of the turnaround maintenance project.

The only clog would of course be lack of political will, which we know could be cultivated. So let all hands be put on deck to achieve results.

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Editorial

Gas explosions: Nigeria and its avoidable tragedies 

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Nigerians die daily for reasons  so avoidable it would make  a 19th century peasant weep.  The deaths are often a product of systemic wickedness, nonchalance, and greed. Too often have gas explosions claimed the lives of Nigerians untimely. Whether it is the leaders refusing to enforce the checks and balances for personal gain, or citizens selling defective gas cylinders, it all balls down to a collective aversion for kindness.

The internet is rife with news of this tragedy occurring in a Sisyphean cycle. Jolted by the cries of the populace, the leaders promise reprieve, release press statements and in the weeks that follow, little to nothing happens. “One must imagine Sisyphus happy,” Camus wrote. Unfortunately, our Nigerian dead imagine nothing.

While people relaxed from their labour, were preparing for the Workers Day celebrations, nine people including a pregnant woman were injured in Tuesday’s gas cylinder explosion at Alaba Lane, Alayabiagba Community of Ajegunle-Apapa, Lagos.

“The fire explosion started around 1:30 pm and immediately, two tricycles were burnt, school children coming back from school were affected. A particular young man was seriously affected as his body was peeling off, but rushed to the Gbagada General Hospital,” according to reports.

The usual suspect is, of course, negligence, as the Director of Lagos State Fire and Rescue Service, Margaret Adeseye, puts it: “preliminary investigation revealed that several various gas cylinders traded within the neighbourhood have one triggered from a susceptible leakage leading to the snapping of a high tension cable and resultant Fire.”

The explosion razed down “four commercial tricycles, six lock-up shops, a bungalow part of properties, while salvaging adjoining structures including a major fuel service station.” Children were hurt, the future of the nation plunged, as usual into avoidable misfortune.

The way out is through. The press releases are wonderful PR statements but they do not bring back the dead, as was the case in Ogun State recently where a truck explosion cost the nation another life. The leaders must enforce the checks and balances put in place. The law is no decoration.

We mustn’t wait until a politician’s family member is involved in a tragic gas accident before “banning” (as is the default response of the Nigerian leadership). The leaders must realise that such misfortunes are contagious, and money is hardly a bulwark against 3rd degree burns in a nation where all its doctors are fleeing.

Renewed Hope requires renewed action. This is all that Nigerians ask of its leaders. All agencies responsible for monitoring trucks, cylinders need to work together to defeat this peculiar evil. Like COVID-19, gas explosions are no respecter of persons.

Of course, citizens too must do their part and resist the allure of profit over the death of others. A society without empathy is headed for a dystopia. It will not matter the price of petrol or electricity tariff, if all that matters is the pursuit of super profit at the expense of one’s neighbour. We owe it to the dead to live fully and graciously. To escape, as we should, avoidable tragedies.

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Editorial

Nigeria must act now to mitigate flood disasters

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As the rainy season looms ahead, a palpable sense of concern grips the nation.The recent cautionary message from the                      Federal Government to 31 state governors  regarding the looming threat of floods from April to November serves as a wake-up call, demanding swift and concerted action from both state and federal authorities.

Presented by Minister of Water Resources and Sanitation Joseph Utsev, the 2024 Annual Flood Outlook paints a bleak picture, underscoring the urgent need for preemptive measures. It is not merely an emphasising advisory; it is a resounding call to arms.

The spectre of past flood calamities in Kano, Taraba, Lagos, and other states still haunts our collective memory.

The haunting images of devastated homes, displaced families, and shattered livelihoods serve as poignant reminders of the human toll exacted by our complacency.

It is imperative that we glean lessons from these tragedies and take proactive steps to forestall the impending catastrophe.

The warning issued by the Federal Government is crystal clear: floods are imminent, and the time to act is now.

The Nigeria Hydrological Services Agency’s classification of 148 local government areas across 29 states, including Lagos, Kano, and Delta, as high flood-risk zones emphasising the gravity of the situation.

Every moment of inaction heightens the risk to countless lives and properties. State governors, local authorities, and relevant agencies must set aside differences and collaborate effectively to implement robust flood preparedness and mitigation measures.

From infrastructure reinforcement to early warning systems and community awareness campaigns, a comprehensive approach is imperative to safeguard vulnerable communities.

As responsible stewards of our nation’s welfare, we cannot afford to be caught off guard. Let us heed the warning, unite in purpose, and proactively address this looming threat.

The cost of inaction is too grave to contemplate, and the time to act decisively is now. This is not a drill.

The minister’s revelation that 31 states face high flood risks, while all 36 states and the Federal Capital Territory will experience moderate flooding, demands immediate attention and collective action.

“The high flood-risk states are Adamawa, Akwa Ibom, Anambra, Bauchi, Bayelsa, Benue, Borno, Cross River, Delta, Ebonyi, Edo, Imo, Jigawa, Kaduna, Kano, Katsina, Kebbi, Kogi, Kwara, Lagos, Nasarawa, Niger, Ogun, Ondo, Osun, Oyo, Plateau, Rivers, Sokoto, Taraba, Yobe,” the Minister said.

We cannot afford to wait until the waters rise and lives are lost. The time to act is now. It’s imperative that federal and state governments, agencies, and local communities join forces to mitigate the impact of floods.

This requires a coordinated response, including public awareness campaigns, infrastructure upgrades, emergency preparedness plans, and investment in flood mitigation projects.

The future of our nation depends on it. Let us heed the warning and take proactive steps to build a more resilient Nigeria, where lives and properties are protected from the ravages of flooding. The clock is ticking; let us act now to avoid a catastrophe.

While 31 states face high flood risks, the remaining five states must also be proactive in their preparations. It’s not enough to simply warn residents to relocate from flood-prone areas; state governments must provide safe and conducive spaces for relocation, complete with essential services like relief materials, healthcare, and security.

This will help mitigate the trauma faced by displaced families. Citizens, too, have a critical role to play. They must be willing to relocate from their homes and comfort zones to prevent avoidable deaths and losses. The stark reality is that flood disasters are devastating, as seen in 2023 when 45 lives were lost, 171,545 persons displaced, and 22,666 homes partially damaged, with 5,358 others completely destroyed.

The economic toll was equally staggering, with a $4.6 billion bill that significantly dented Nigeria’s GDP. Let us learn from the past and take collective responsibility for flood preparedness. State and federal governments, agencies, and citizens must work together to build a more resilient nation, where lives and properties are protected from the ravages of flooding. The time to act is now.

In 2022, flooding claimed 662 citizens; 2.43 million others were displaced and 3,174 were injured nationwide, per NEMA.

The financial losses were estimated at $9.12 billion by the Federal Government, and by a United Nations agency at $7 billion. A UN report stated that food insecurity was aggravated in the country as 569,000 hectares of farmland were destroyed by the flood.

According to the then Minister of Water Resources, Suleiman Adamu, 178 LGAs in 32 states were declared “highly probable flood risk states.”

Although climate change remains a global concern, leading to flash floods, droughts, forest fires, and cyclones, the government must not make excuses.

They need to take lessons from previous floodings and replace their nonchalance with strategic actions and campaigns. They must do all they can to avoid the repetition of losses of lives and properties.

The citizens must play their part by clearing drainage in their vicinity, cultivating good waste disposal and environmentally friendly culture. To entrench this, the government must place strict surveillance and enforce stiff penalties against erring residents.

State governments should demolish structures erected on flood paths to enable rainwater to drain appropriately.

NGOs in the environmental niche should activate campaigns distilled in local languages through the media to prepare citizens for the flood.

The federal and state governments should be proactive in the deployment of ecological funds to provide guardrails against natural disasters. This must be used for pre-emptive measures like building bridges, desilting rivers, evacuating canals and drainage, and building dams and levees. The dams would help preserve excess rainfall to irrigate farmland during the dry season.

The government must fully embrace its onerous duty to safeguard lives and properties.

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