BUDGET 2012 – BROKE COUNTRY, EXPENSIVE LEADERS By: Nasir Ahmad El-Rufai

Published:20 Jan, 2012

20120120-054620.jpg

The attempt by President Jonathan to withdraw the ‘fuel subsidy’ largely to raise revenues for a wasteful government united Nigerians across ethnic, religious and social strata for over a week. One of the unintended consequences of the administration’s unilateral action was bringing to the front-burner questions about the size of government, the excessive cost of governance, and the fraud and corruption in the oil sector. Nigerians now know that their president would rather impose an overnight tax on them than undertake an orderly deregulation of the petroleum sector. They also know the difference between an isolated fuel price hike (for immediate revenue) and the policy review-legislation-independent regulation-competitive markets path that was implemented in the telecoms sector deregulation between 2000 and 2001. Nigeria will be the better for it, as we are now unanimous on seeing that some of the spending items like the near N1 billion for food in the Villa are justified and put in context.

For this reason, over the ensuing weeks, this column will undertake a detailed sectoral analysis of the 2012 budget proposal submitted by the President to the National Assembly in December 2011. Our objective is to enlighten all stakeholders on the provisions contained in the budget and suggest areas to reduce waste, question spending priorities and cut out what appears dysfunctional. Our hope is that the National Assembly will in the end make the budget work for the people of Nigeria. Today, we will look at the revenues profile for 2012 and issues arising there-from, and then throw a searchlight on the much-headlined expenditure for the security sector. Details of the budget are available online on http://budgetoffice.gov.ng/2012_budget_proposal.html or if for any reason unavailable, http://el-rufai.org/2012/01/full-access-to-2012-budget-proposal/

The federation expects to generate about N9.4 trillion in revenues in 2012, consisting of about N6.4 trillion from oil and gas, N2.7 trillion from personal income and company taxes, custom duties, and value-added tax. Another N250 billion is expected from special levies and taxes like the Education Tax. Out of this total, the Federal Government share amounts to about N3.6 trillion. This is because the FGN gets about 48.5% of the oil and non-oil revenues and taxes, about 14% of VAT and gets to keep all of its independent revenue. Omitted from the budget is an additional 7.5% of the total – special funds that include the ecological fund, the Federal Capital Territory and mineral resources fund. Also omitted is how much is deducted from the gross oil revenue as our contribution to the Joint Venture Cash Calls. All these need to be detailed out for the National Assembly to do its constitutional duty and ensure accountability, but they are missing from both the Budget and the Medium Term Expenditure Framework for 2012-2015.

Starting with projected revenue of about N3.6 trillion, the budget envisages a total spend of N4.7 trillion, meaning that we intend to spend about N1.1 trillion more than we expect to earn this year. Where is the extra cash coming from? It is not from ‘fuel subsidy’. The 2012 budget already assumed that not a penny will be deducted to subsidize petrol. The FGN hopes to finance the deficit by borrowing some N794 billion this year, and get some windfall from privatization (N10 billion), signature bonus (N75 billion) and the now-depleted excess crude account (N225 billion). No provision has been made in the Budget to transfer any amounts to the Sovereign Wealth Fund. Once again, these are items that need to be detailed for us as citizens to know, and for the National Assembly to decide upon.

What are the implications of these pieces of information? How does the plan to borrow an additional N794 billion sit with the administration’s desire to “reduce” our borrowing from the current levels nearing 20% of GDP? What does the projected medium term expenditure framework reveal about our revenue and spending patterns? Are these consistent with the desire of Nigerians to see a smaller, less expensive and more efficient federal government? We ask our readers to bear these in mind as they reflect on the numbers presented herein.
We should also note that with the ‘fuel subsidy’ not fully gone, the FGN’s assumption of zero-subsidy-deduction is off the table, and the hole in the budget will increase by at least half of the ‘expected N400+ billion’ to N1.3 trillion, so further borrowing is necessary to fund this gap. And as I wrote last week, there is not a single kobo anywhere for the so-called SURE-P programme unless the National Assembly raises the benchmark price of crude oil by at least another $20 with the risks attendant to that.

Looking closely at the spending proposals, commendable efforts have been made to reduce the level of statutory transfers to INEC, UBEC, NDDC and the National Judicial Council. Sadly, the transfer to the National Assembly remains at the 2011 level of N150 billion. Unless this is reduced, we will spend an average of N320 million per legislator in 2012 at a time when Nigerians are clearly disgusted at the very high quarterly allowances they draw, over and above what the Revenue Mobilization Allocation and Fiscal Commission has approved for them. The National Assembly should listen to the voice of Nigerians and reduce this provision substantially. The provision for the salaries and allowances of public servants has risen by about N150 billion from the 2011 levels to N1.655 trillion. This increase cannot be due to the usual annual salary increment. There is something more and it contradicts the stated goal of the administration to reduce the cost of governance. The National Assembly should scrutinize this more closely with a very sharp knife!

Other items of expenditure that need closer review are the overheads – the N11 billion for international travel, more than N30 billion for “research and development”, maintenance of vehicles, furniture, etc., over N20 billion, stationery, magazines and newspapers at over N5 billion, and nearly N17 billion (more than $110 million) to purchase yet another plane for the president, at a time when we are being asked to sacrifice and pay more for petrol, transportation, food and rent. There are other items we will highlight in each sector but these broad areas are indicative for the time being of the need for close scrutiny by the citizens and the National Assembly.

We will now briefly look at the provisions for the security sector. The president announced that the sector got allocated some N922 billion for 2011. This number is the sum of the budgetary allocations of the ministries of defence, police affairs, and Interior plus Police Commands and Formations and the Intelligence Community (NSA’s office). The president forgot to add the following – (1) Amnesty Programme (N74 billion), (2) Military Pensions N60 billion, (3) Army Internal Operations (N17 billion), (5) Police Service Commission (N2.5bn), (6) Customs, Immigration & Pensions (N8.6bn), (7) SSS/NIA Pensions (N11.2bn), (9) Death Benefits – Army & Police (N5.4bn), (10) Federal Road Safety Commission (N28.9bn), (11) Maritime Security (N4bn) and Police Reform Fund (N15bn). Adding all these up brings the total of our spending on the security sector to N1.145 trillion, not the N922bn highlighted. The equivalent tally for 2011 was N1.174 trillion, about N30 billion higher than this year.

We will begin the analysis of the security sector with the budget of the Intelligence Community – the office of the NSA, the SSS (Internal Security), the National Intelligence Agency (External Counter-Intelligence) and the Presidential Air Fleet (PAF). The budget of the Defence Intelligence Agency and Directorate of Military Intelligence are under the Ministry of Defence, and are therefore excluded.

It is worth noting that the NSA is one of the 20 special advisers approved by the National Assembly for the president, but he sits in the Federal Executive Council as a member. His office is an advisory office and his main job is coordinating the activities of the security agencies, with staff strength of about 100. Each agency is independent of the NSA and routinely reports directly to the president. It is therefore difficult to explain how the NSA has the highest budget of all in the intelligence community- higher than that of the SSS with about 15,000 staff and the smaller but far more effective, NIA. The NSA’s budget consists of N212 million for personnel cost, N3.64 billion for overheads and a whopping N33 billion for capital projects! The respective proposals for the SSS are N17bn, N5bn and a paltry N1.8bn! No wonder the SSS is handicapped in dealing with security threats within our borders! The NIA is not much better with N19.7bn for staff costs, N3.9bn for overheads and N2.6bn for cap[ital projects.

A cursory look at the NSA’s capital projects is even more revealing. Over N1.1bn will be spent on satellite communications, over N3.5bn on something called “data signal centre/equipment” and N717 million for Iridium/Thuraya Communication platform. I thought that Iridium went out of business nearly a decade ago, and Thuraya is an insecure form of communication used mainly by global companies to connect far-flung personnel. Are our agencies using this for secure communications in the 21st century? I wondered about that until I saw the provision of N78 million for a presidential communications network and N27bn for the establishment of a “strategic operations centre”. We all hope that the most advanced technologies will be adopted in deploying these – and certainly not low-earth orbit satellite systems like the defunct Iridium!

The Presidential Air Fleet is under the NSA’s office. Apart from modest provisions of N15.6 million for personnel costs, N969 million for overheads (spares, checks, and aviation fuel can be expensive!), there is a provision of N16.8bn ($110 million) for a brand new plane for the presidency. This is quite an expensive plane because a fully-equipped high-end Gulfstream 5 can be acquired brand new for between $40-50 million. The plane type and specifications were not mentioned in the budget, and these should interest the citizens of Nigeria and the National Assembly.

Within the budget of the State House is a proposal to buy two brand new, bullet-proof Mercedes Benz 600E cars for the presidency at about $1 million each. I guess since our two topmen are getting new cars, it makes sense for them to have an additional new aircraft as well – but in a year in which we are living above our means, spending at least N1.1 trillion we do not have, and borrowing N794 billion to make ends meet? We are broke as a nation, we now know. We will collapse if the fuel subsidy is not withdrawn, according to our president. Are our leaders not too expensive? Are they sensitive to our cries for improved electricity, affordable transportation and jobs for our youths? The ball is in the court of the National Assembly to restructure this budget.`

Nasir Ahmad El-Rufai

  • Abba Waziri

    When the head of the family deprieves u of basic needs,starves u.oh papa we r poor! but when he borrows nd lives extravagantly I’m afraid he’s a lunatic!!!

  • sulaiman muhammad

    GEJ. is a real drunkard, He’s not reasonable at all. He is not serving the people but him self…

  • smartkid

    Sulaiman Muhammed,
    Your comment is pregnant with prejudice.Obviously,truth is bitting on the flesh of a corrupt person
    Islam taught equity and justice.We would be wise to live by it.

  • Redondo Fernardo

    GEJ is a blood drunken ruler. He isn’t a leader but a disgusting stealing liar. I see him as an agent of darkness sent to punish Nigerians for being docile and cowards.

  • isah

    Nigeria is being governed by crooks, embryonic thieves with no human feelings. So this is the transformation agenda they are setting out; new aircraft, cars and out-dated communications equipments. Security and fuel subsidy are the main conduits for stealing by the rouges in power; the national assembly should live up to its constitutional responsibilities and revisit the jaundiced 2012 budget proposal.

  • Olabamiji Adeyeye

    Hmmm!!! Our country is not broke, we just have leaders who are wasters and frivolous. The Government is just interested in maintaining and expanding their extravagant lifestyles. This is what in Yoruba land we call “APA”. GEJ (APA ni ee) you are a waster.

  • deji

    We need to translate this information into different languages and educated every single Nigerian that our system of governance is bogus,extravagant and above all we have wasteful
    Leaders!

  • mustapha sodangi

    peruvian president one came to Nigeria and made his finance & interiot minister + their aides sleep in d same suit with himself at transcorp hilton just to cost for his nation. Can our leaders make such sarcrifices for us? I wonder.
    Thank you Mal Nasir

  • mildafrican

    Iridium is still operational! The US department of defense is a big customer and contributes significantly to their revenues. Otherwise, a very insightful writeup.

  • bassey

    ”the ball is in the court of national assembly to restructure the budget”
    you can abuse member of na reprenting your constituency who could
    not have a say or contribute to reduce this excess.
    GEJ is trying and he appreciate a constructive criticism and/or contribution to get nigeria out of this mess the likes of shagari, gowon, babagida, abacha, abdusalam and obj digged…..
    If this is done with absolute sincerity, niger delta would dream to be like abuja and lagos.

  • Ahmed @alpha1marine

    NOI said at the NA hearing that removal of #fuelsubsidy will prevent Nigeria from going the Greece way. I ask, with this budget is Nigeria not gone far and above the #Greece way ?

  • Samuel A.

    This is simply what we’ll refer to as shuffering & shmilling in the midst of plenty, its a real pitiful situation we’ve found ourselves

  • Mines and elixir routinely harvest the currencies once positioned within the floor.
    Whenever they get created, they traverse Wo — W rapidly, until anybody finds how you can dismantle
    these. He does show up for the gig but he and Gunnar almost come to blows before they go on stage.

    Feel free to visit my weblog :: clash of clans triche gemmes illimité (Julian)

Related Posts

Recent Posts

Manchester United’s Mourinho needs to play attacking football – Eto’o

Manchester United manager Jose Mourinho needs to keep playing attacking football, his former Inter Milan striker Samuel Eto’o has said. Eto’o played under Mourinho at Inter when the club won the Treble in 2010 and also worked with him at Chelsea in 2013-14. Success in Italy was built on a solid defence — something Mourinho has become strongly associated with — but this week he praised the “beautiful, attacking football” he feels United are playing. Eto’o told Telefoot: “Jose has changed a...

Yemi Alade, Falz, Tekno make Future Awards nominee list. [See Full List]

Ahead of the 11th edition of The Future Awards Africa, which holds on December 18 in Lagos, the organisers have unveiled the 2016 nominees. The nominee list was contained in a statement made available to PREMIUM TIMES. Top Nigerian music artistes, Yemi Alade(27), Falz(26), Teckno(22), Kiss Danielz(23) and Mr. Eazi(25) will compete...

Ignore dubious adverts, no sale of JAMB forms yet – Official

The Joint Admissions and Matriculation Board, JAMB, has urged the public to disregard the speculations that it had commenced the sales of its application documents for 2017 UTME by some group of persons. The board’s head of media and information, Fabian Benjamin, debunked the speculations in a statement made available to the News Agency of Nigeria, NAN, on Sunday in Lagos. According to the statement, the registrar of the examination body, Ishaq Oloyede, has expressed disappointment with the development and called...

Obasanjo’s Challenge Of Buhari By Sonala Olumhense

As one who firmly believes that one Olusegun Obasanjo squandered the finest opportunity of any Nigerian leader since independence, I have often criticized him. Between 1999 and 2007, he could have transformed Nigeria into Africa’s most developed, most productive and most functional economy.  The records show that he compounded the situation, and then handed over to his handpicked successors who made matters considerably worse. That led, inevitably, to the arrival of one Muhammadu Buhari, who had sworn for years Nigeria...

Revealed: 40 Reps, 5 Senators Parade O’ Level certificates

A peek into the qualification details of the members of the National Assembly by Daily Trust on Sunday reveals that a staggering number of the parliamentarians got elected with Ordinary Level certificates during the 2015 general elections, a development that leaves doubts on the capacity and quality of legislation in the 8th National Assembly. A total of 45 federal lawmakers who got elected into the Nigerian parliament during the 2015 general elections to represent their various constituencies across the...

Atiku, Tinubu, Makarfi Converge Over Formation Of New Mega-Party

Barring any last-minute change of plans, the proposed mega opposition party in the country will be formed before the end of March, 2017, SUNDAY PUNCH has learnt. It was gathered that the Ahmed Makarfi faction of the Peoples Democratic Party and aggrieved chieftains of the All Progressives Congress had intensified efforts aimed at forming the party since the result of the Ondo State election was released. Findings showed that besides the plan to form a new mega party, those involved in the...

Money Laundering: Ex-Lagos Speaker, Aide File Appeal At Supreme Court

A former Speaker of the Lagos State House of Assembly, Ikuforiji Sabit Adeyemi, and his personal assistant, Olabode Alade Atoyebi, have filed an appeal at the Supreme Court of Nigeria, challenging a Court of Appeal judgment that recently ordered their re-trial on money laundering charges. In their separate notices of appeal, the duo’s lawyer, Barrister Abiodun Onidare, is urging the Supreme Court to set aside the whole ruling of the Appeal Court. In their filings, the former Speaker and...

OGFZA extends regulatory control to more oil & gas FZs

The Oil & Gas Free Zones Authority – OGFZA has begun the process of implementing the provisions of its enabling law and Federal Government directives ceding regulatory control of all Oil and Gas Free Zones in the country to OGFZA. In a letter dated 17 November 2016 to the managing director of Lagos Deep Offshore & Logistics Services Limited (LADOL) and the managing director of Snake Island Integrated Free Zone (SIIFZ), the chief executive officer of OGFZA, Mr Umana...

Police arrest two for allegedly hiding money abandoned by fleeing robbers

The Lagos State Police Command have arrested two men for allegedly stuffing N1.5 million abandoned by fleeing armed robbers into their private parts. Adegoke Adewale and Ganiyu Idowu were caught on Thursday evening by the operatives of the Rapid Response Squad, the police said in a statement on Sunday. The police said they were in hot pursuit of three armed robbers who had allegedly snatched N3 million from a yet to be identified bank customer in Oshodi. The suspects, whom the police...

Nigeria turns to Pakistan, China for war planes, helicopters, others

Concerned about global politics surrounding procurement of sophisticated arms from western countries, Nigerian Air Force is expecting arrival of war-planes and helicopters from Pakistan and Russia to boost its fleets. The Chief of Air Staff, Sadique Abubakar, made the disclosure at a breakfast briefing with editors of online media in Abuja at the weekend. Mr. Abubakar said: “I want to say that we have been enjoying support from other countries. (Sometimes arm procurement) is shrouded in a lot of politics. Unfortunately,...

Super Falcons stars celebrate 8th African title

The Super Falcons players have continued in their celebrations after they won a record eighth African title in Cameroon on Saturday. The AWCON 2016 top scorer, Asisat Oshoala, Francesca Ordega as well as Courtney Dike have all expressed their delight following the lone goal victory against the Indomitable Lionesses on Saturday in Yaounde. Desire Oparanozie’s solitary strike in the 84th minute was enough to help the Falcons to their eighth African title. Oshoala who won the Golden Boot award having scored six...

SERAP wants Nigeria’s Attorney General, Accountant General jailed

The Socio-Economic Rights and Accountability Project, SERAP, has commenced committal to prison hearings against the Federal Government; Abubakar Malami, Attorney-General of the Federation and Minister of Justice; and Ahmed Idris, Accountant-General of the Federation “for having neglected to obey the order of the court made on Friday the 26th of February, 2016, requiring them to provide SERAP with up to date information on the spending of recovered stolen funds since the return of democracy in 1999.” The information ordered to...

APC wins Lagos by-election

Nurudeen Akinwunmi, candidate of the All Progressives Congress, APC, on Saturday defeated his opponents to emerge winner of the Ifako-Ijaiye Federal Constituency bye-election in Lagos. The returning officer of the election, Clement Aghatise, made the declaration at the INEC office in Ifako-Ijaiye Local Government, minutes before midnight. Declaring the winner, Mr. Aghatise said that Mr. Akinwunmi polled 7640 votes to defeat his closest rival, Babatope Akinyele, candidate of Peoples Democratic Party, PDP, who polled 1771 votes at the poll. According to him,...

CBN denies allocating dollars

The Central Bank of Nigeria, CBN, has denied reports from some quarters that it allocates dollars unilaterally. A statement by Isaac Okoroafor, Acting Director, Corporate Communications on Saturday in Abuja, decried the way some Nigerians chose to disparage those in leadership at this time in total insensitivity to the larger interests of the Nation’s economy. He added that the CBN had set up an inter-bank foreign exchange market where anyone who wishes to buy foreign exchange could bid for and buy...

About 500 Nigerians die of HIV/AIDs daily – NACA

At least 500 Nigerians die of HIV/AIDs daily, with an average new infection of 600 people every day, says Sani Aliyu, Director General, National Agency for the Control of AIDs, NACA. Mr. Aliyu gave the figure during an interview with the Nigerian Television Authority, NTA, about HIV/AIDs, aired on Saturday night. He said although the country has achieved great heights with the support of government and the international community, a lot of help is still needed from private individuals to address...

NEMA takes food to Nigerian refugees in Cameroon

The National Emergency Management Agency, NEMA, said on Sunday that it has conveyed a total of 1,460 bags of assorted food items to the 80,709 Nigerian refugees that were forced by Boko Haram into Cameroon. NEMA had said that at least a documented 240,000 Nigerian refugees had fled into Cameroon, Chad and Niger in the wake of Boko Haram insurgents’ rampage and seizure of communities. The relief agency had last week said in a report that it has recorded the return...

Borno records 512 new HIV cases in IDP camps

The Executive Secretary, Borno Agency for the Control of HIV/AIDS, BOSACA, Barkindo Saidu, says 512 new cases of HIV infections have been recorded in Internally Displaced Persons, IDPs, camps in the state. He spoke on Sunday in Maiduguri while briefing journalists. Mr. Saidu said that the cases were recorded after voluntary screening in some IDP camps in the state. He pointed out that two out of the 512 persons were children. “We are currently conducting voluntary screening on HIV/AIDS in IDPs’ camps across...

Gowon, Obasanjo, Shonekan, Osinbajo grace Villa Chapel thanksgiving

The Aso Villa Chapel on Sunday organised its annual end of the year thanksgiving with former Heads of State, Yakubu Gowon, Olusegun Obasanjo and Ernest Shonekan in attendance. The service which took place in the chapel was also attended by former Vice President Alex Ekwueme, former Chiefs of General Staff, Ebitu Ukiwe and Oladipo Diya, and host Vice President Yemi Osinbajo. Vice President Osinbajo said the service was an exciting time to thank God for all he had done for the...

Nigerians in U.S. celebrate Trump’s appointment of Bayo Ogunlesi

The Nigerian community in U.S. has lauded the appointment of Bayo Ogunlesi by U.S. President-elect Donald Trump into his Economic Advisory Team, saying it could signal a positive trend for Africa. The Nigerians told the Correspondent of the News Agency of Nigeria in New York, that Mr. Ogunlesi has been an excellent ambassador for Africa and Nigeria in particular. Michael Adeniyi, former President of a Nigerian U.S.-based group, the Organisation for the Advancement of Nigerians Inc., told NAN that “Bayo Ogunlesi...

Buhari to attend security forum in Senegal

President Muhammadu Buhari will attend the Third Dakar International Forum on Peace and Security in Africa in Dakar, Senegal, from December 5 to 6.   The Forum, convened by President Macky Sall of Senegal with support from the African Union to discuss security-related challenges on the continent, will be attended by African leaders and representatives of regional and international organisations.   President Buhari is scheduled to participate in the Panel of Heads of State on Tuesday, December 6.   The President, who has identified improved...

Two Nigerians Create Epic Fight Game Based On African Mythology

There has never really been a space for African mythology in fantasy realms, and that’s why projects like these – ones that tap into Africa’s rich culture – are always welcome.   Creative artist, Akdogan Ali, and programmer, Umusu Samson Iruo, decided to embark on a journey in creating a video game that will showcase Africa to the world: Throne of gods.   (Photo: Throne...