Some years ago, the Federal Government of Nigeria dreamed big. The government unfolded an ambitious development plan, called the Vision 2020, wherein it envisioned or projected that, by next year, 2020, Nigeria would be one of the first 20 economies in the world. It was a programme that required the government and the citizens to work progressively as individuals and collectively as a people to place the country on a transformative path that would propel it to a big economy.
With a vision statement, which said, “by 2020, Nigeria will have a large, strong, diversified, sustainable and competitive economy that effectively harnesses the talents and energies of its people and responsibly exploits its natural endowments to guarantee a high standard of living and quality of life to its citizens,” the government planned, in the main, to “make efficient use of human and natural resources to achieve rapid economic growth” and “to translate the economic growth into equitable social development for all citizens.” The projection was to “build a peaceful, equitable, harmonious and just society; develop a globally competitive economy; have and ensure a stable and functional democracy; and achieve a sustainable management of the nation’s natural resources,” according to the position paper on the Vision 2020.
Under the Vision 2020, it was expected that, by next year, 2020, the economy would have been turned around as the “manufacturing and services are expected to dominate the structure of national output, while gross national investment is expected to increase, and the infrastructure base of production is expected to improve considerably. Income per capita should have risen to US$4,000 from the current (2008) estimate of US$1,230. The current structure of production is expected to reverse, as the relative contribution of agriculture to national output declines to a maximum of 15 per cent over the long-term, as the sector continues to grow.” That was the dream.
In the economic growth programme, there was a plan to improve productivity, eradicate hunger and poverty, ensure food security, accessibility to quality/affordable healthcare, access to clean water, make housing affordable, develop human capital, ensure acquisition of education/skill and job generation, etc. It was a programme that would have, if implemented with precision, made Nigeria a force to be reckoned with in the global economy by next year.
The year 2020 is three months away, when the country ought to be among the first 20 strongest economies in the world. Incidentally, the vision has not been realised. In fact, the country is far from realising it, as the goals have not been met. Three months away, Nigeria has been rated as the poverty capital of the world, with millions below the poverty line. Millions of people are without jobs, with those who have jobs daily losing theirs in rapid proportion. Healthcare system is in shambles. There is dearth of modern infrastructure, while the old ones are decaying. Security is nothing to write home about, with kidnapping, armed robbery, insurgency and banditry on the rise across the country. Housing is not affordable.
To show how bad things have become, for next year, 2020, the Federal Government has proposed a national budget of N10.33 trillion, with recurrent expenditure taking N4.88 trillion, while budget for capital expenditure is N2.14 trillion. In the 2020 budget, Works and Housing Ministry has the biggest allocation of N262 billion, in a nation where roads are in terrible condition nationwide. The budget for education is N48 billion, with Universal Basic Education Commission (UBEC) getting N112 billion, at a time when education should be the foundation for future development. The power sector was allocated a budget of N127 billion and transportation will get N123 billion.
Many things have been said about the 2020 budget. Some say it is a budget of tax, as it is predicated on, for instance, the expected 7.5 Value Added Tax (VAT) and others. Others say it is a debt-servicing budget, with N2.45 trillion earmarked for this. Yet others see it as a budget to sustain the lifestyle of those in government, with N4.88 trillion set aside for recurrent expenditure and other huge sums allocated for the welfare of those in government. Whatever it is, one thing that is clear about the 2020 budget is that it shows how small the Nigerian economy is. For a country that previously aimed to be among the first 20 economies in the world to budget N10.33 trillion for 2020 is an indication of economic stagnation. We are indeed a little economy. This year, the budget of New York City in the United State of America is $92.2 billion. This is about N33.192 trillion at the rate of N360 to $1. Out of this, the Fire Department of New York (FDNY) got $2 billion, which is N720 billion, at the rate of N360 to $1. From this, the budget of FDNY, an agency in the US, is bigger than four ministries of Education, Works and Housing, Transportation and Power in Nigeria, including UBEC, put together. These four ministries and agency’s budget allocations in Nigeria come to N672 billion.
The 2020 budget, therefore, is a small budget for a big nation like Nigeria. It tells a sorry story of the state of things in the country. If we had a vibrant economy, where the private sector blossomed, where foreign direct investments were high, where critical infrastructure existed and functioned, Nigeria’s economic base would be far bigger. Indeed, it is strange that the Federal Government based the 2020 budget strongly on the expectations of a hike in VAT. The question is: Did anybody reckon that the National Assembly, which has the final say as to whether VAT would be increased or not, could decline to amend the enabling law, the VAT Act? Certainly, if the VAT Act is not amended to accommodate the 7.5 per cent projected rate, there won’t be an increase and government would not meet its projected VAT income.
It is one thing to propose a budget and another thing to implement the budget. What is the percentage of implementation of previous budgets? In situations where implementation is less than 75 per cent, the whole exercise is meaningless. Of all the allocations for the respective ministries, what percentage will eventually be released for the execution of their projects? Where budgeted funds are not realised and where they are realised but not released for use, the country is going nowhere.
It is cheering that President Muhammadu Buhari has raised an Economic Advisory Council to help the government in its economic and development plan. The government should listen to the council and implement its good recommendations when they come. Indeed, the government should pursue its economic development plan vigorously. It should invest in key infrastructure, which will be the drivers of the economy. Electricity or power still remains critical. Decisive action should be taken in the sector because economic growth rests on it. I believe that, if we get the power sector right, where enough and stable electricity is guaranteed, the path to economic growth is set. Also, the government should invest in science and technology, as the future lies in the sector.
Importantly, the Federal Government must do something about the cost of governance. It is good that President Buhari has announced the slash of estacodes or travel allowances for government officials on assignment abroad as well as reduction in the size of delegations travelling overseas on behalf of government. This is a step in the right direction. Government should, indeed, introduce strict austerity measures to reduce public expenditure on things that won’t grow the economy or bring about development. If we cannot increase our revenue base, we should, at least, reduce the cost of operations or expenditure. That is one of the ways to survive in a bad economy.