The National Assembly recently passed the 2010 Appropriation Bill ith huge adjustments in the total sum to be spent and the key macroeconomic indices on which the budget estimate was predicated. Under the new dispensation, a total of N4.608 trillion would be spent in the 2010 fiscal year as against N4.079 sent to the National Assembly in November 2009. The passed bill hiked the oil reference price from $57 to $67, while the production quota was raised to 2.350 million barrels per day. The budget is calculated on an exchange rate of N150 to the dollar.
As usual, recurrent expenditure takes the lion's share with N2.077 trillion allocated to it, while a paltry N1.853 trillion is left for capital budget. The National Assembly alone would gulp N138 billion just for doing what is supposed to be a part-time job. Iyiola Omisore, the chairman of the Senate appropriation committee, laboured to explain steps taken to overcome the dangerous trend of unencumbered profligacy. He said the recurrent expenditure was trimmed to save funds for capital budget.
Even with the wan effort of the National Assembly, one thing is clear: the cost of governance in the land is intolerably high. A country with decrepit infrastructure has no business spending close to 60 per cent of its income on salaries and unnecessary perks for civil servants and top politicians. The persistently high cost of governance is responsible for the country's inability to meet its millennium development goals (MDG). Nigeria is expected to reduce the maternal mortality rate from 600 to 200 in 100,000 births by the year 2015. Ironically, the figure has climbed to 1,200.
Besides the senseless concentration of resources on recurrent expenditure, the macroeconomic indices on which the budget is predicated are not only myopic but unnecessarily ambitious. The use of $67 as oil reference price for the budget would put more money into the federation account for easy sharing by the three tiers of governments and deplete the excess crude account which had occasionally kept funds from the reach of spendthrift governors and helped the Central Bank in its fight against inflation.
The budget's production quota of 2.350 million barrels per day does not factor in fears that, with the amnesty programme of the federal government faltering, renewed militancy in the Niger Delta could result in huge shut-ins which could truncate the budget. Even with a stable Niger Delta, changing international market situations could compel OPEC to effect drastic quota reviews that could confront Nigeria with huge budget deficit.
We believe that Nigeria can spend less and save more for the future. This could only be attained if the federal government starts a relentless campaign against corruption. It is at the root of the high cost of governance.
Written by Isah
Leadership Newspaper Sunday, 04 April 2010.
