It has been necessary to bring back the summary of the 2021 Budget provided last week for speedy recollection. The first part of this series focussed on the, once again, unrealistic N13.1 trillion expenditure projected. Since, “Even God cannot change the past” (Agathon, 447-401 BC) and perhaps some of the present, it is a historical fact that the Buhari government had failed to achieve its stated expenditure objectives from 2016 to 2019. it is already on course to miss the 2020 target by a wide margin. With that dismal track record, few financial experts will rely on their submissions for next year. No Board and Executive Management team of any company would have survived those calamities. Elected officials get away with failures which no football team will tolerate from their managers. We obviously take football more seriously than governance.
The second thing to dispose of in the basic submission of government is the 3.64 per cent attributed to debt deficit of N5.12tn. The deception was totally deliberate. Deficit, debt and debt service go in tandem. Debt service actually represents 23.85 per cent of the 2021 expenditure. Realising that even the most stupid Nigerian would immediately grasp the impending disaster involved in spending almost one quarter of expenditure paying debts, Buhari switched to rendering deficit as a percentage of Gross Domestic Product, GDP – 3.64 per cent. In reality, it is 39.08 per cent of expenditure – a truly alarming percentage, even if achieved. Unfortunately, even that frightening target will most likely be missed by a wide margin. That was the pattern in five years; nothing suggests the sixth year will be different. You don’t do the same thing over again and expect a different result – unless a miracle occurs. The reason is simple.
Once the IGR target shows a negative variance, larger deficit occurs which is always covered by more loans than was envisaged in the beginning. And, the more loans the higher the debt-servicing ratio climbs. The entire process is so elementary; one is at a loss why nobody in the Executive or the National Assembly, NASS can understand it. Obviously, the 2021 Budget is set to repeat the dreary annual budgetary cycle all over again. The FG will eventually borrow more than they budgeted and debt-servicing will gulp a higher percentage of revenue. Buhari might leave office in 2023 with debt consuming up to 60 per cent of our annual national income.
When the mind turns to poverty alleviation, or more correctly, poverty escalation, the heart bleeds. Everybody recollects Bihar on May 29, 2019 telling Nigerians that since China and India succeeded in lifting 100 million of their citizens out of poverty; his government was committed to achieving the same feat in ten years. He repeated the same pledge in the 2021 Budget presentation. It was simply outrageous! The line between fact and fantasy (sanity and insanity) is a thin but firm one. Politics is always the art of the possible. Presidents are not elected to broadcast fairy tales but possibilities.
China and India lifted so many millions out of poverty by growing their Gross Domestic Product, GDP, at double digits for ten or more years. By May 2019, Nigeria, under Buhari recorded the following annual GDP growth rates: 2016, -1.4%; 2017, 0.8 per cent, 2018, 1.98 per cent. Can anybody discern any similarity between Nigeria and China that would warrant Buhari’s “determination” to achieve the same feat as China? Most readers would recollect that in late 2018, the World Poverty Clock, WPC, had proclaimed Nigeria the poverty capital of the world – largely on account of the three years of the Buhari government. Undeterred by facts, preferring to stick to his own fiction, Buhari still promises to reduce the nation’s poor by 100 million in ten years. Where do we stand now – more than a year after the promise?
“Population of extremely poor persons in Nigeria hits 102m – NECA.”
VANGUARD, OCTOBER 12, 2020 p 19.
Before going into the NECA report, it is necessary to step back a bit to 2018.
So, in June 2018, 87 million Nigerians were living in extreme poverty. Now, 102 million or 15 million more, are in that disastrous situation. Yet, the President responsible for adding 15 million in two years is still talking about “commitment to lift 100 million in ten years?” Let us be serious. Granted it takes millions of fools to make “My Fellow Countrymen”, but, this is close to total national loss of senses on display. What would we think of the person making such claims, after five dreadful years if he is not the President of Nigeria?
Just in case you think NECA was exaggerating, then consider this piece of information and shed more tears for Nigerians under Buhari.
“Albert Zeufack, World Bank’s Chuef Economist for African Region, while speaking at the launch of new Africa Pulse….said debt exposure for African countries is set to grow by 61 percent in 2021…CDP per capita will record a decline of close to six percent in 2020 and by 2021; GDP per capita would have decreased to the level where it was in 2007, that’s 13 years of progress completely erased.” DAILY INDEPENDENT, OCTOBER 12, 2020, p 28.
A brief but heart-breaking explanation is required — for the sake of those who might miss the import of that bit of bad news. The Africa region, with the GIANT of the continent leading the pack is borrowing its way into deepening poverty; such that by the end of 2021, the per capita income would have decreased to the 2007 level or approximately when Obasanjo lft office. The Buhari administration which promised in 2019 to start lifting 100 million Nigerians out of poverty over ten years, would by 2021 increase the number of those living in poverty by more than 30 million and reduce the standard of living of the average Nigerian below the 2008 level. Thus, we can again throw another part of the 2021 Budget into the trash can. It will not happen – unless a great miracle, such as the world has never seen, occurs. For sure Buhari would leave us in such a condition by 2023 that it will require three other governments to restore the nation to where it was in 2015.
To be continued…