Posted by News Express | 23 December 2015 | 2,995 times
When we human beings fall prey to illusions, it becomes very easy to wish away difficulties and fly to the highest heavens in reverie.
Hence, the budget presented by President Muhammadu Buhari to the National Assembly Tuesday, December 22, can only be described as budget of illusions, certainly not budget of assumption with which it was tagged.
Swimming in cloud nine, sure it was easy to more than double the capital budget to N1.8 trillion from N557bn in 2015. This new vote, declared the President, represents 30% of the total budget.
Unfortunately, we all know that the very first casualties when revenue does not trickle in as expected is always the capital budget.
Now how easy will it be to hit revenue target in 2016? Answer: Not likely to be easy at all because benchmark crude oil price was already well below budget base $38 per barrel. Meaning hope can only come from great harvest from non oil-revenue drive and a determination to stay on course with capital budget since it is the true justification for planned above one trillion Naira new debts in 2016.
Unfortunately, apparently, the President and his team are far more determined to distribute free food to primary school pupils when compared to reviving the economy through wealth creation, as against wealth distribution policies.
So still swimming in cloud nine, it became very difficult to cut recurrent expenditure by more than 5.45% being targetted relative to 2015 estimate by the Jonathan regime which, we are constantly reminded, was inept and corrupt. So we are to celebrate reduction of recurrent budget from N2.5 trillion to N2.43 trillion from a base overflowing with corruption and ineptitude.
Yet a lot more could have been chopped from the recurrent bill if the frebbies for primary pupils and phased stipend for unemployed youths had been put on hold; and if the petroleum products market had been totally deregulated to block the billions in monthly outflow aka fuel subsidy.
Thus, it is obvious that the more than one trillion to be borrowed to close the deficit in the budget will be borrowed not because of capital expenditure but because a choice has been made to stay in the clouds and hope that God will remain merciful and handle the mess inherited by Buhari and the one he has now decided to add to the heap.
Unfortunately, none stays in cloud nine for ever. Indeed, soon enough 2016 realities will slap His Excellency from his self-imposed illusions. Pity by then he would have frittered away completely the tremendous goodwill that came with the romance of majority of Nigerians with Buhari and change, as a mantra.
•Henry Atenaga, a Lagos-based Financial Analyst and Principal Consultant at Henates & Associates, first published this piece in his http://henates.blogspot.com.ng. Photo shows President Buhari about to hand over the 2016 Budget . . . yesterday at the joint session of the Nationa;l Assembly.
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