No government agency, ministry, department or commission can function effectively and efficiently without ‘independence or autonomy’ from political influence. The Nigerian system is now characterised by Impunity: political bullying, right infringement, secrecy, and a corruptible judicial system. While we ridiculously celebrate the rebased-GDP and nominal positioning of Nigeria as the largest economy in Africa amidst wide poverty and unemployment that has germinated into our current stage of insecurity, it is surprising to find government’s intention focused on eliminating fiscal governance completely.
No government agency, ministry, department or commission can function effectively and efficiently without ‘independence or autonomy’ from political influence. The Nigerian system is now characterised by Impunity: political bullying, right infringement, secrecy, and a corruptible judicial system. While we ridiculously celebrate the rebased-GDP and nominal positioning of Nigeria as the largest economy in Africa amidst wide poverty and unemployment that has germinated into our current stage of insecurity, it is surprising to find government’s intention focused on eliminating fiscal governance completely.
While a fraction of Nigeria’s insurgence of terrorism (which is no longer limited to the North) can be blame on religious extremism and politics, a larger fraction can also be blamed on the fiscal irresponsibility of government of all tiers. Actions are the outcomes of freewill instigated by the environment. There is no need to stress the truth that a large proportion of the Nigerian environment is clouded by hunger poverty, unemployment, illiteracy, insecurity and anxiety. According to the Minister of Trade and Investment Olusegun Agang in 2012, Nigeria needs to invest about $14.2 billion annually for the next 10 years to meet the current infrastructure gap so as to redeem the epileptic capital infrastructure situation; and ensure the completion of the approximated 12,000 abandoned projects reported in 2012. This will facilitating a reduction in the rate of unemployment which the ‘2012 National Baseline Youth Survey Report’ of the Nigerian Bureau of Statistics (NBS) put at 54%.
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The UNESCO’s EFA Monitoring Report 2013/14 shows that there are 57.2million out of school children in the world with 10.5million of the figure as Nigerian out of school children who are mostly from the in the Northern part of Nigeria. The same report shows that Nigeria has the largest teaching gap to fill in Sub-Saharan Africa; between 2011 and 2015, Nigeria was said to need 212,000 primary school teachers, 13% of the global total. Ironically, Nigeria spends N1.5trillion annually on foreign education and N250billion annually on foreign medical care to the detriment of quality education and affordable health care in the country.
Today we have a rebased-GDP that has catapulted Nigeria to the position of the largest economy in Africa with a GDP of $510billion. This has placed us amongst the fastest growing economy in the world. However, such growth has not translated into development as the above abridged reality suggest otherwise. The rebasing of the GRP was long overdue and deserves commendation, but the bulk of the work remains undone. The rebased GDP ought to have been reflected into sector development and improved welfare. The Vision 20:2020 envisages a transformational growth which can be seen in the vital sectors of the economy and translated in an improvement in the Human Development Index. In achieving the vision 2020 there are guidelines prescribed by the Vision 2020 documents and other enabling acts, which requires a committed and disciplined application by all stakeholders. Overtime, the contrary persist in the pursuit of the vision as governments at all levels have contributed to killing the vision through irresponsible fiscal prioritization.
For instance, both state and federal governments budget are dominated by government operating and personnel cost, instead of a reasonable proportion to capital infrastructural projects. Currently the operating and personnel cost of government is over 70% of the entire budget, while capital budget have hardly exceeded 26%. Aside the low infrastructural appropriations, capital budgets are far from full-utilization. Official figures released from the Budget Office of the Federation, shows that only 51% of the budgeted sum for capital infrastructure provision and maintenance was used in 2012, and 45.7% as at September 2013.
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These are as a result of late budget preparation, presentation and approval, which contrary to Section 18(1) of the Fiscal Responsibility Act (FRA) 2007. There is also the absence of broad consultation with sectoral experts and other stakeholders as required by FRA Section 13(Sub 2a), thus resulting to poor monitoring and evaluation by the stakeholders. Also, Nigeria’s debt borrowings are continually on the rise and are neither channelled into capital projects or human development as required by Section 41 (1a) of the FRA, which states that:
(a) Government at all tiers shall only borrow for capital expenditure and human development, provided that such borrowing shall be on concessional terms with low interest rate and with a reasonably long amortization period subject to the approval of the appropriate legislative body where necessary; and..’
In line with this provision, section 44 (1-3) of the Act also provides that cost-benefits of proposed borrowing or the means of payback must be disclosed as the basis for such borrowing. In contravention of this provision the states and federal government debt stock has risen by N2.63tn ($16.84bn) from N7.53tn ($48.36bn) in March 2013 to N10.162tn ($65.2bn) as of March 31, 2014.
This indicates a 34.93% increase in debt within a period of just one year; this exceeds the increase of Nigeria’s income within the period. It is annoying to state that most state governments have gone on the spree of debt accumulation, by selling of bonds at the eve of their administration. Meanwhile the proceeds of the bonds are hardly deployed for capital investments. This ugly scenario leaves the future generation with the burden of debt servicing with no infrastructure to show.
It will suffice here to state that the re-based GDP has positioned Nigeria as the richest country in Africa with evidence seen in the jumbo pay of legislatures and other high ranking public officers, including top capitalist within the country. For the poor, the re-based GDP means nothing to them because the only reality they have consistently faced with are; unemployment, lack of infrastructures, inaccessibility to affordable and quality education and health care.
For the rebased GDP to have an impact on the entire society there is need for the redistribution of wealth amongst the people. An equitable fiscal system must be put in place: the PAYE system must be fully and widely enforced; Properties that are hardly occupied around the country should be taxed, as well as all corporate bodies and political office holders (in which case a disclosure of remuneration must be enforced). This would require a strengthening and empowering of the Federal Inland Revenue Service (FIRS) to enforce collection; as well as cooperation with the Corporate Affairs Commission (CAC) to ensure compliance.
Areas of revenue leakages need be plugged; the government need to be true and serious in their fight against oil theft and vandalism; oil cabals should at least be named and shamed, if not booked and jailed. The construction of local refineries relative to sizes should be the agenda of all administration, as the current subsidy scheme seem to be bloated with scams. The Petroleum Industry Bill (PIB) which is long overdue should be signed into law. Waivers of custom duties should be abolished as developmental funds are wasted in the name of preference.
Funding commitment need be focused to the agricultural and manufacturing sector as the re-basment suggests. Funding of these sectors need to be tilted towards mechanisation and infrastructure development; for instance factory and processing plants should be erected to engineer the extension of agricultural value chain. This will create more jobs for Nigerians, reduce the over-dependence on oil; cure the effects of Dutch disease, cut down import dependency as more made in Nigeria products come to existence. This effort must be guarded with the right trade policies which must protect the Nigerian manufacturer at all cost. There is also a crucial need to achieve steady power supply; the DISCOs and Transmitting companies need to upgrade their services; improving electric facilities through financial sourcing of floated of securities. This will ensure the needed available long term financial leverage as well as increase ownership by Nigerians.
Intervention schemes such as the SURE-P should be focused on stand-alone-projects against merging with existing projects. Synergising the SURE-P to the federal government projects makes the outcome and impact of the intervention to be rather unclear and questionable especially in the areas of infrastructure. Hence the SURE-P infrastructure projects can be limited to educational infrastructures, health facilities, as well as agricultural projects; along with the social safety nets.
The Nigerian budget process should be timely and participatory in accordance with the fiscal responsibility act. Still on the budget, the cost of governance should be prune down as annual budgets are over-blotted with frivolous and wasteful line items such as the Security Wide votes. These ought to be abolished and channelled into priority areas like the infrastructure, security and defence. According to the Economist Magazine in July 15 2013, Nigerian legislatures are the highest paid in the world; making political offices a do or die affair; susceptible to adverse selection. Such remuneration is not commensurate with Nigeria’s state of want. Despite clamours and appeal to the Revenue Allocation Mobilization and Fiscal Commission (RAMFAC) upon whose shoulder lies the responsibility to restructure the remuneration packages of the public and political office holders, the agency seem rather handicapped, hence, a wider income inequality. This ought not to be.
Vital efforts need to be made on revamping the education sector; tertiary institutions need to be improved infrastructural; more laboratories, class room facilities, accommodations, etc. There is also a vital need to increase the capacity of learning staffs by rolling out more qualified academicians. The government at all levels as well as education stakeholders; need to arrive at common ground towards resolving issues instead of the common practice of academics staff strike and government neglect. Other forms of education such as the Almajeri education in the northern part of the country should be encouraged, through the collaborative sensitisation and support from the traditional rulers and local governments and chiefs.
All efforts and jingles to bring in foreign direct investment into the country will be blowing hot air into the wide if safety cannot be guaranteed. The government must be proactive in handling the security threat in the country; ensure peace within its borders; with the military well funded and fed with military kits and intelligence. Where insurgency seem to overwhelm existing military motivation or capacity; the government must be able to buying or request for international expertise or intervention to ensure full normalcy and peace.
Finally, the rule of law must be upheld. Nigeria must rise to the point were no individual citizen or group stand supreme over the nation or her constitution. Full and stiffer sanction must be played out on offenders; the common practice of plea bargain should be eroded from the constitution and all acts. The Judiciary must be given independence from the executive; from the selection of judges by the governors/presidents to their daily judiciary proceeds. Such autonomy must be granted to all other government agencies. Citizens must also learn to be responsible and inquisitive into the affairs of the government. For Nigeria to attain higher development, the governments at all levels must be fiscally responsible; having an existing fiscal commission to oversee this.
Donald Ikenna Ofoegbu
Public Finance Expert and Researcher
Centre for Social Justice
08030840041
The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of SaharaReporters
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