The Nigerian President, Muhammadu Buhari on November 14, presented the 2017 Federal Budget tagged “Budget of Recovery and Growth to the National Assembly for consideration. In his Budget speech, he expressed optimism that the budget presented before the National Assembly will perform the wonder of resuscitating the Nigerian economy, and provide succor for the people. But as we must ask: does the 2017 budget proposal really present any hope for the Nigerian working people?
Answer to this question lies in concrete analysis of the current Nigeria situation, in the light of the fundamental cause of the economic crisis that now plagues the country. We will recall that just about three months after the passage of the 2016 budget in May 2016 year, the Nigerian Minister of Finance announced that Nigeria is in a technical recession but expressed optimism that in a short while the economy would be stabilized.
However, rather than the situation getting better, particularly with the implementation of the 2016 budget, the situation moved from bad to worse. Before the end of August, the federal government had acknowledged that Nigeria is officially in recession without any hope of quick recovery. Now 7 months into the implementation of the 2016 Budget and with over 70% budget implementation, the federal government has not been able to address the economic problems confronting poor people, but is quick to announce that the 2017 budget will do the long awaited magic.
A quick look at the 2017 budget proposal reveals that the federal government proposes a N7.298trillion budget which is a nominal 20.4% increase over the 2016 estimates. According to the budget proposals, 30.7% of this expenditure which amounts to N2.24 trillion will be for capital expenditure in line with its determination to reflate and pull the economy out of recession as quickly as possible.
However, the estimated revenue is put at N4.49 trillion leaving a budget deficit of N2.35 trillion. This implies that over 30% of the amount needed to fund the 2017 budget will be borrowed. N1.067 trillion or about 46% of this borrowing will be from external sources while, N1.254 trillion will be borrowed from the domestic market. It is quite confounding how a budget which has a paltryN2.2 trillion in capital expenditure out of a N7.2 trillion is expected to help to recover the economy.
At this point, it is important to point out the contradiction between the budget document and the expressed intention of the federal government. While the federal government professes that the 2017 budget will help take Nigeria out of the current economic quagmire, the budget allocation figures show that there is every likelihood that the recession will linger much longer, with working class people bearing the brunt. With over N1.2trillion of the total budget expenditure going into debt servicing and N2.9trillion proposed for recurrent, it shows that the entire budget structure is not based on any solid foundation for economic recovery.
We will also recall that, most of the allocations to recurrent in 2016 was actually to finance the activities of the Executives and the Legislators, with barely anything left to pay workers’ salaries. This same situation is expected to play out in 2017, a hug chunk of the recurrent expenditure is meant for taking care of the ruling class while the working people will be made to suffer for the enjoyment of this class.
With inflation currently at 17%, the N18,000 minimum wage, is a take home pay that cannot take any worker beyond the workplace gates on payday. And even at that, the governments at both the federal and states levels have publicly claimed that they do not have the capacity to pay.
Many states owe as much as three to four months’ salary arrears. As people all over the world celebrate the yuletide, Nigerian workers celebrate in pain and hunger as even the federal government is yet to pay November salaries of the workers not to talk of paying the December salaries. In all of this, the bosses and their families enjoy the best of the season with the same budget provisions.
It will be pretentious of the politicians to claim that the 2017 budget will make life better for the working people when the reality of the 2016 budget implementation shows that the poor have no place in government arrangements. The 2017 budget does not reflect any consideration for increased minimum wage in line with the persistent increase in inflation which has further devalued the purchasing power of workers on the basis of the current minimum wage.
It further does not show any real intention to lubricate the economy through increased capital spending. It is only through increased purchasing power and capital spending that economic activities in the country will be stimulated but where these two are silence, what will be experienced in the long run will be stagflation. In order word, working people whose salaries remain stagnant will have to struggle for survival as whatever is left of their purchasing power will be eroded.
It is imperative for Nigerian workers to understand that the bosses only care about themselves and their economic interests at the detriment of the working people, whose meagre wages will be cut to pay for the luxury of the ruling elite. We need to understand that the 2017 budget proposal does not portend any hope for the working people rather it is designed to continue satisfying the greed of the ruling class. Together we must unite and fight any attempt at effecting wage cuts and continue mobilization to demand for a living wage.
by Isaac Botti