If Nigeria had any serious opposition, the budget speech of President Buhari no matter how good intended held valuable promise for a team of budget egg heads intent on scoring solid economic and political points. Great on rhetoric and good for the President whom communication never seems to be a strong suit, the budget was high on empathy and low on specifics. It also showed a certain dissonance between policy pronouncements and budgetary gaps.

Almost a week later, all we have is an executive summary of spending with details still missing. Seem very much like me like the whole practice of walking back from the answer not any serious zero budgeting method that Governor El Rufai has since put into practice in Kaduna state. No one is yet to tell us what the National Assembly needs $500 million USD for or why the state house budget is not moving down much despite the well-known frugality of its current occupant compared to his predecessor. 

If the budget failed of specifics, it should not come as a surprise to those following the high rhetoric of the new APC government about zero budgeting but who have noted that this conservative approach to budgeting takes a dedicated team in MDAs working year round to achieve not a 3-4 weeks spring after a belated appointment of much maligned "bench-warming" ministers! 

However to avoid falling in the "wailers" trap, one must acknowledge the positives in this year's budget and budgeting process. Despite what Professor Utomi has said about the hopelessness of budgeting, the Buharist approach to budgeting has restored some hope in some semblance of discipline albeit many improvements are desired. Despite the self-gratifying accolades the National Assembly members sought to heap on the President for presenting the budget himself instead of through a coordinating minister for "underdevelopment" as another chap would have done, there was no doubt from the teeming audience of Nigerians that tuned in that it was the Nigerian people that the President was addressing after months of silence.

The President took the budgeting speech and process serious, and that must be commended. He also acknowledged obvious sufferings of the long suffice electorate from insecurity/Boko Haram menace, corruption, to unemployment to fuel queues he apologized for and the hardship of foreign exchange controls imposed by the Central Bank on trade. Solid proposals on revamping education and nod to the importance of diversifying the economy also showed impeccable vision as was steady leadership. The improved balance towards capital expenditure, promotion of increasing efficiency in spending & cutting waste as well as enhanced revenue recovery especially from independent agencies and customs are also commendable. 

But if the President excelled in empathy, which he was not well known for, he failed in lucidity that he is becoming well known for - especially as a civilian. While he gave a nod to two major economic impediments - the unstable currency and unreliable energy supply –he made no definite policy pronouncements on how he will resolve the situation. 

Because the President did not clarify his own thinking on currency management  (monetary) vis import management (fiscal) policy in that speech, Mr. Emefiele policy summersaults that is ensuring irreparable long term damage to the economy (a topic for another day), continues unchecked. ATM/Debit card from Nigeria are now useless overseas, even as domiciliary account holders are denied access to their accounts against the very premise of banking. These probably pushing more money to the dark side, swelling the ranks of the unbanked, and cash economy at the very time we should be depleting their ranks to benefit the larger economy and generate more revenue. FDI is fleeing as a result; further depleting FOREX reserves and the growth target of the President seems even more optimistic. 

Because the President did not clarify his energy policy if he has any in that speech, policy summersaults by his petroleum minister, Mr. Kachikwu is now a daily occurrence with the bizarre pronouncement of subsidy removal and price control the same time under a new policy designated as modulation or  a strategy of "neither or" as some will say. The danger of being caught in the middle here is real, as Nigerians are still confused as to which energy policy to respond to in the absence of presidential direction. It is even worse when one considers the fate of NNPC. A more descriptive policy pronunciation on either restructuring or break up would have been more productive. While most observers favor some form of commercialization, a road map can boost the stock market for example if it were going to benefit from listing with consequent improvement in optimism in the overall feeling of the country. An opportunity the President seems to have missed. This just being one of many ways the President's lack of elucidation hurts the nation but which seem lost on his handlers. 

Another fatal blow to the overall budget delivered aside from the obvious non-zero budgeting & details such process yields as well as the silence on the key policy directions mentioned above has to be the reality that the biggest spending capacity of the government were excluded from the budget. The simple reality of Nigeria was that the biggest government spenders are the National Oil Company i.e. the Nigeria National Petroleum Company (NNPC) through its various investments and cash calls, as well as direct operational spending which can be as high as $1billion excluding cash calls in a good year and $10billion including cash calls and the special intervention funds directed by the Central Bank of Nigeria (CBN). Good luck trying to find those in the budget.

For a country with $30 billion budget (or $23bn real exchange rate), if NNPC is doling out $10 billion (bn) and it doesn't make it to the budget and aligned with fiscal policy (for example on local content, import substitution etc.) definitely makes mockery of the budget planning process. Leaving out CBN and NNPC, leaves out the biggest spenders in the economy. The CBN control over $15bn directly in various intervention funds in Agriculture, Education, Small Business, Mining even Oil & Gas, and this translates to probably over half of the budget. This excludes other funds it superintends as lender of last resort  (like AMCON) or liquidity provider potentially for the stock market or real estate sector via Federal Mortgage financing. The reality is that a budget without CBN or NNPC only provides a very narrow perspective to the true spending power of Nigeria's government. President Buhari stuck to the same old script of budget subterfuge that befuddles even his most agile supporters. About time we get real. 

If the lack of policy pronouncements and lack of details or scope left much to be desired, then the lack of policy theme or cohesion in the budget will be one that cannot be excused. Security and Anti-Corruption being the President's strong suit does not make for an economic policy of growth vision. At best they make for a clarion call to "stop digging" instead of "start building".  That left Jobs and Creation of quick wins in the economic opportunities front as a theme the President could have seized. While the 500,000 teaching jobs were commendable as were the calls to diversify, and reduce small business tax the lack of details and perennial lack of commitment by alluding to partnering with states and local governments even for administering welfare palliatives did not boost confidence. In truth, the key to unlocking the potential of Nigeria's small business to create jobs can be found in the very agency excluded from the budget- the Central Bank, and it's plethora of badly managed intervention funds that never gets to their intended recipients and are stuck in treasury bonds.  

An economy obsessed with real estate and fixed deposit cannot create jobs, and this is a reality the President had to deal with especially when the banks under the weight of onerous central bank policies have stopped lending even to fixed wage earners. Setting up a Small Business Agency for example to harness and soldier these available funds by positing account officers in banks across the country to grow specific sectors like Agric, Mining, ICT and Manufacturing for example would have been a practical step for job creation. In this sphere, rhetoric simply won't count.  A policy of automatic salary payment to all government workers would also have been welcomed; it never made sense why a government that printed currency would owe its staff. It is one way we’ve figured out how to hamper the economy. 

Be it as it may, it will take another article to jump in the presumptive sphere (in the absence of details from this non-zero budget) to analyze the budget line for line. One thing that is clear though is that a lot of items simply don't make sense. There were plethora of policy and budget mismatches. 

For example, there seem to be bundle of uncoordinated spending on federal assets especially building and vehicles even while the President was preaching efficiency and austerity in recurrent expenditure. Wonder when we will finally put this under a single office. A lot of assets are rotting away while we keep building new ones. The US has the General Service Administration (GSA). We need an equivalent. One sees a new secretariat in Ekiti budgeted for at 1bn naira,  yet combined maintenance  of other 23 secretariat complexes across the country is for the same mere 1bn naira. No mention of the rotting secretariat in Lagos or the thousands of rotten king federal buildings in Ikoyi alone talk less of Lagos that needs consolidation. And imagine a paltry 6bn to refund states for roads - when Lagos alone claims 60bn naira in its own 666 bn (don't joke with those numbers) in her own state budget. 

Furthermore, what about the paltry 1.5 billion naira for severance pay to civil servants affected by public service reforms? This was even lower than funds set aside to pay former heads of states. I bet no civil servant is taking the impending reforms seriously. The sheer amount of intervention or supplementary capital spending (otherwise called "Pork Projects" for the boys) standing at almost 350 billion naira, is simply too much. While the President was all about saving via traditional methods (by PDP standards) of payroll and financial automation, his idea of technology intervention to stop corruption were tuned to the institutional crimes of the 90s (Ghose workers et al) and not the perfected crimes of the 2000s- procurement and contract splitting. It was the right speech to lay out a comprehensive e-Governance and electronic procurement monitoring and acquisition mechanism to run the entire Federal Government and enhance competitive bidding starting from our own GSA. 

A review and objective criticism of the President's budget would not be complete without some parting thoughts and conclusion...

Overall, it was a great budget speech by Mr. President. But still does not go far enough. 4.5% as targeted growth for a poor developing with 110 million people living in poverty does not go far enough. We still need a separate stimulus package focused on kick starting the economy, after the National Assembly does its work and resolve the fatal flaws pointed out especially bringing in NNPC and CBN budgets as part of the National Budget. The normal budget process cannot deliver economic kick-start that Nigeria needs- the stimulus package will. It will be a package of jobs by rebuilding infrastructure, small business interventions by reorganizing existing funds and working with the banking system, tax reforms- suggest a low flat tax for all businesses but FGN licensed big business (Oil, Banks, Telecoms and Mining), and reforms in crucial sectors to create lots of jobs (Agric/Agro Allied Industries, Tourism, ICT and transportation). 

Nigeria should cut the destructive fuel subsidy (and import waivers and licensing regimes) and use the savings plus naira bond raise by selling to pension funds and investors to finance a 20 trillion naira package with private sector financing at least half of it. Let's rebuild this country and stop pussyfooting around poverty and underdevelopment! Final advice for Mr. President: Be bold. Think Big.

Happy New Year in Advance. Wishing you and your family a prosperous 2016.

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