NLC, civil society decry cut in health, education budgets
• Seek massive reduction of political appointees’ emoluments
Although it is imperative to reduce 2020 budget estimates, the decision to reduce the budget of the social sub-sector such as health, education and agriculture in the face of economic hardship that COVID-19 has imposed on the global economy may backfire.
The Labour-Civil Society Situation Room on Covid-19 said in Abuja that it is worried about the decision to downsize the budgetary provisions for health, education, agriculture and infrastructure and freeze new recruitments in all the Ministries, Agencies and Departments of government except those in the health and security sectors.
It stated that such a step would make economic recovery from the Covid-19 crisis more difficult, even as it expressed worry that the over-padded emoluments of political leaders in Nigeria remain untouched, including their unregulated access to security votes in the face of COVID-19 pandemic.
The group also bemoaned the incongruities in Nigeria’s public budgeting system, saying: “The persistence of unwieldy recurrent expenditure, replication of similar cost centres, and insertion of vague cost items in the budget indicate an entrenched and thriving culture of official sleaze through budgeting.”
It expressed palpable fear about resorting to increased foreign borrowing as a way out of the current economic quagmire, saying, “just before the Covid-19 pandemic in Nigeria, Nigeria’s external debt had hit a 16-year high of $27billion with a debt servicing commitment of $1.5billion per annum, which is about five per cent of our 2020 federal budget, and 75% of our external reserves. It is of great concern that our current total debt profile is almost at par with what we owed the Paris Club before the debt amnesty of about $18billion from a total debt stock of $35.994billion. CBN records show that the Federal Government borrowed over N4.4trillion by ways and means in 2019. This is far beyond the maximum of N4.5billion allowed in CBN legal statutes.”
The group said it is also concerned about the debt crisis facing the private sector, noting that the withdrawal of labour from the production chain owing to Covid-19 meant that loans sourced for production have been lying idle or are trapped as raw materials without value beneficiation.
The coalition added that while this situation once again re-echoes the fact that labour is the real creator of surplus-value and wealth, it is important for the government to address the debt challenge to save jobs.
It stressed that while different tiers of government seek to boost their internally generated revenue amidst the current crisis, incidences of infringement on statutory revenue sources for the lower tiers of government particularly the local government councils would likely be on the increase.
It said it is worried that recent public financial audits show a gale of widespread mismanagement of government revenues.
Commenting on the planned removal of petrol subsidy, the coalition said the policies of successive governments concerning the downstream petroleum sub-sector reeks of opacity, double standards, corruption and an obstinate desire to transfer the cost of governance failures and inefficiencies to the Nigerian people.
It equally observed that while government groans over the paucity of funds, no serious effort is being made to salvage the Nigerian economy from the dilemma of under-production and under-development.
“The solid minerals sector of our economy has been poorly governed, creating opportunities for government revenue to be siphoned by unscrupulous persons and organised criminal networks who are protected by highly-placed political actors.
Furthermore, the failure of our economy to add value to primary resources has become our albatross. From our crude oil to agricultural products, the breakdown in our resource value chain has deepened our crisis of unemployment, the dearth of foreign exchange reserves and local currency tumult,” it explained.
The coalition also maintained that distribution of palliatives to the informal sector is not sufficient, inclusive and transparent enough.
The group said governments should adopt a measured approach to the fallout of Covid-19, saying resorting to economic stabilization and austerity measures by the Federal government would worsen the current economic crisis.
It added: “Experience from other climes including Nigeria should come handy at this time. Government should not cut down on budgetary allocations to education, health, agriculture and infrastructure as these sectors are critical for the needed economic rebound and growth. Government should unfreeze the embargo on public sector jobs. Also, hike in user access charges on public utilities should be shelved for the next six months.”
It also observed that given the abuse of security votes by many political officeholders in the executive branch of government, scrapping security votes from public budgeting in Nigeria has now become imperative.
“Security votes should be appropriated and accounted for like every other budget item. We call on political officeholders to reduce their salaries and allowances in order to free up finances for other areas of national developmental needs. We also call for an end to medical and education tourism for elected public officials and their families. We call for an immediate stop to the practice of borrowing to finance consumption. We call for foreign loans where necessary to be tied exclusively to capital projects with feasible income and debt repayment potentials cum projections,” it said.