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Groups raise concerns on feasibility of 2018 budget

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The Minister of Budget and National Planning, Senator Udoma Udo-Udoma<br />

Despite assurances, fiscal governance experts are raising issues with the feasibility of the 2018 budget and its outcome in engendering economic growth as claimed by the Federal Government.

The concerns, which cut across capital expenditure vote, debt service provision and rising recurrent non-debt expenditure, are assessed as conduit to fritter public funds, deprive the poor rural masses and favour the one per cent elite group.

There is also an outright omission of National Health Act, which provides for one per cent of the Consolidated Revenue Fund to be appropriated as a statutory transfer to the Basic Health Care Provision Fund meant for the poor rural mass.

The Lead Director, Centre for Social Justice, Eze Onyekpere, while speaking with The Guardian, said that while the capital expenditure at 30.8 per cent, inclusive of the capital component of statutory transfers, looks good on paper, previous experience shows that the capital vote is very poorly implemented.

Citing the 2017 capital vote, he argued that only N450 billion has been released at the time of budget presentation in a capital vote of N2.174 trillion, which amounts to a paltry 20.7 per cent of the capital expenditure.

“It is not therefore, sufficient to make proposals, which may not be followed through, but also imperative for the administration to ensure that the bulk of the capital expenditure is developmental rather than administrative.

“The second issue is that the rising debt service appears to be crowding out expenditure in critical infrastructure and human development. The debt service, which is 23 per cent of the overall vote when added to the sinking fund for the retirement of maturing bonds add up to 23.22 per cent of the overall vote.

“This is almost one quarter of the expenditure. At the end of the day, if there is a shortfall in revenue, salaries and overheads will be drawn down, debts will be serviced while capital projects suffer,” he said.

He expressed worries over what he described as contradiction in government’s mantra of cutting down waste, improving efficiencies, the use of IPPIS and removal of ghost workers from the payroll when there is rising recurrent non-debt expenditure yearly.

For example, recurrent non-debt expenditure got N2.59 trillion in 2015, moved up to N2.64 trillion in 2016 and got the sum of N2.990.92 trillion in 2017.

“And now, it got a vote of N3.494 trillion in the 2018 proposal; these increments cannot be the sign of a system that is taking steps to remove waste and inefficiencies. Personnel and overhead expenditure are projected to rise by 12 per cent respectively from the value of their 2017 projection,” he said.

He flayed the missing Basic Health Care Provision Fund, which had been so for the past three years, as the executive and legislature have ignored it.

“The statutory transfers indicate that government failed, refused and neglected to provide for the Basic Health Care Provision Fund. This is clearly an act of bad faith, an illegality and outright contempt for the rule of law, constitutionalism and the rights to life and health of the poorest of the poor,” he added.

Also expressing worries over the fiscal plan, the Communications Lead at BudgIT, Abiola Afolabi, said about 42.9 per cent of Capital Projects in the 2018 proposed budget has no direct impact on citizens.

In a note to The Guardian, Afolabi said that approximately N744.48 billion of the N2.65 trillion capital allocation will go into administrative items, which include the procurement of cars, retrofitting of government offices, trainings, consultancies, purchase of furniture, and computers and so on.

According to him, given that the funds marked for capital expenditure will be largely borrowed, it is disheartening to discover that most line items therein show a great disconnect from the developmental goals of government, as stated in its Economic Recovery and Growth Plan (ERGP).

“We have seen several items included in the capital budget that should ordinarily have been excluded given the tight fiscal condition and meagre economic growth. Most of the administrative capital items as shown in our research analysis will benefit less than one per cent of the populace – politicians and civil servants.

“Our scope of developmental capital projects as urgently needed should include the acquisition, upgrading, construction and maintaining of physical assets such as hospital, schools, roads, railways, power plants, street lights, and boreholes among others,” he said.

Besides, he alleged that 94.7 per cent of the 9,331 line items under Capital Expenditure in 2018 proposed budget have monetary values below N500 million each, but also have vague descriptions that will prove difficult to monitor or track in physical and auditing terms.


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