2016 Budget – what promises for working class-people?

2016 Budget – what promises for working class-people?

buhari.budget-2016The budget will not bring any significant change to most Nigerians.  Huge promises were made for spending on public education and health during the election, but the budget only provides for low levels of spending (only six and four percent respectively).  Also the personnel budget is to decline by 8%. This will most likely lead to an overall loss of public sector jobs and small if any wage increments for public service workers.  Efficiency for public sector workers means working harder for no extra money – this will be the result of the promised ‘Efficiency Unit’.

The promise of teaching jobs is great as Buhari promises to “partner with State and Local Governments to recruit, train and deploy 500,000 unemployed graduates and NCE holders”.  But this is only an “emergency measure” and so carries no promise that these will be permanent jobs.  As was shown with youth employment schemes in many states, these are just cheap and temporary jobs – which can end suddenly, as happened in Edo State when 10,000 YES workers were suddenly retrenched earlier this year.

The promised social wage of N5,000 for the 25 million poorest Nigerians is not to be implemented any time soon. This “conditional cash transfer program” is to be implemented with international development partners.  The World Bank, DfID and other donors are not known for giving money directly to the poor and so we are likely to see a further watering down of this promise.

Buhari is not known for acting quickly – it took him nearly nine months after his election to appoint his ministers.  He is now only saying that, in “the coming weeks, we will present the full programme, which will include our home-grown public primary school feeding and free education for science, technology and education students in our tertiary institutions”.  It is welcome that action is to be taken, but the poor need this to happen now.  Also will this not result in a two tier university system where a lucky few students do not have to pay fees?

In 2010, 56 governments of the Global South, members of Global Partnership for Education, agreed to spend at least of 20 per cent of their total annual budgets on education (with half earmarked for pre-primary and primary education). This is supported by UNESCOwhich recommends that governments spend 26% of their budgets on education. In comparison, Buhari is promising to spend only 6% of his budget on education. What is worse, he is proposing to cut this budget by a quarter from the N492billion proposed for 2015 to only N370billion for next year.

In 2001 African governments pledged to spend at least 15% of their budgets on health in the Abuja Declaration. In 2012, WHO estimated the minimum spending per person per year needed to provide basic, life-saving services was at least US$44 (N7,000).  In contrast, Buhari is promising to spend less than 4% of his budget on health – or less than N1,300 per person. This compares to the N50,000 he promised in his manifesto.

One of the key reasons that social spending is so low is that government revenue is, according to the IMF, less than 10% of GDP – the very lowest in the world!  Buhari could go much further in implementing his manifesto, if he was prepared to increase the level of taxation on the rich.  Their level of taxation is only half of the average level for sub-Saharan Africa.

In macro-economic terms, the budget is reasonable with an injection of capital spending (three times last year’s level). “The deficit, which is equivalent to 2.16% of Nigeria’s GDP, will take our overall debt profile to 14% of our GDP. This remains well within acceptable fiscal limits.”  The current low level of government debt means that deficits at this level would be sustainable for several years to come.  Some commentators will try to claim that this proves the budget is not actually sustainable – but they are only repeating the neoliberal mantra of those who want small governments.  Even the EU sets a target of government debt of no more than 60% of GDP – well over three times the current level in Nigeria.

The budget is promising nothing on fuel shortages, where Buhari merely claims the government is working hard.  There is also no promise to keep the fuel subsidy or reduce the price of fuel in line with global trends, he merely said that that he would, “keep the selling price for all marketers of petrol at N87 per litre for now”.  So no promises that the cost of transport and cooking will not increase in the near future.

Falling into debt is one of the greatest fears for many poor people – so the promise of cheap loans for market women will actually result in misery for many who are seduced by such schemes, as a result of the poverty which confronts most working class-people.

“We have increased the capital expenditure portion of the budget from N557 billion in the 2015 budget to N1.8 trillion, in the 2016 budget” – but this will result in a huge corruption risk if done in the traditional way of outsourcing to construction companies, some of which leading APC chieftains have interests in.  There are no clear promises on addressing the lack of electricity or stopping gas flaring (at least enforcing fines on the oil companies would give the Federal Government an additional income comparable to the budget for Kano State).

There are several issues in the budget which will benefit the bosses and improve public infrastructure, but in reality there is preciously little for workers or the wider poor.  The threats to the fuel subsidy remain and there is no provision to increase the minimum wage.  One of the major problems in Nigeria is the huge level of inequality – but this budget will do little or nothing to address this burning issue.

Social spending will hardly increase and spending on education is to be cut by a quarter from an already pitifully low level.  Buhari is not proposing to increase the level of taxes paid by the rich, which is very low, placing greater tax burden on the poor masses. A progressive tax system (with the rich paying much more) is necessary to fund decent schools, hospitals and other public services.

The change that Buhari still talks about will only come about where workers are prepared to fight together to force concessions from this government.



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