It is to my consternation that despite the crash in the price of oil, and the inability of Nigeria to expand our revenue base through the non oil sector, the Federal Government of Nigeria has only seen fit to slash our budget by a mere 0.6%, from N10.594 trillion to N10.523 trillion. This represents a reduction of only N71 billion.
Putting politics aside, this is grossly insufficient and betrays the fact we have lost touch with the current realities in the global political economy.
For the avoidance of doubt, when this budget was presented to the National Assembly on Tuesday October 8, 2019, it was predicated on a projection that our nation would generate crude oil production of 2.18 million barrels a day, at an expected oil price of $57 per barrel.
Today, that is no longer the case. Both our production, and the price of oil have been severely affected by the corona virus pandemic, to the extent that we have unsold vessels, and our income has tanked by more than 50%.
Given that this is the case, how can anyone justify a reduction in expenditure of just 0.6%? We cannot be the only nation bucking the trend?
Saudi Arabia, a nation with a much stronger production capacity than ours and with a larger global market share, as well as foreign reserves that is 12 times ours, has slashed her budget by almost 30%. Ditto for other oil economies.
Nigeria cannot make up for the loss of expected revenue by taking out more loans and issuing out more bonds. Debt will be the death of our economy and bonds will put our people in bondage.
The best way out of this economic quagmire is to reduce our expenditure. And a 0.6% reduction is no reduction. It is only window dressing.
My counsel to the Federal Government of Nigeria is this: put Nigerians first and cut your coat, not according to your size, but according to your cloth.
Realistically slash the budget. Every pork barrel has to go. The billions budgeted for the travels and feeding of the President and Vice President has to be reduced. The ₦27 billion budget for the renovation of the National Assembly has to go. The massive budgets to run both the Presidency and the Legislature has to be downsized. The budget for purchasing luxury cars for the President, his vice, and other political office holders must be jettisoned. Leave the salaries of civil servants alone, but reduce the salaries of political appointees. Sell 8 or 9 of the jets in the Presidential Air Fleet.
Any budget slash that is less than 25% will not be in the interest of Nigeria. And beyond a budget slash, Nigeria needs a budget realignment, to redirect expenditure away from running a massive bureaucracy, into social development sectors like education, infrastructure, and above all, healthcare. We must invest in the goose that lays the golden egg – the Nigerian people.
These are the types of sacrifices that we need in a time of crisis. We do not need empty gestures that will lead to empty treasuries.
In times of austerity, no nation, not the least a mono product economy, such as ours, should be living in luxury at a leadership level.
Vice President of Nigeria, 1999-2007.