Budget 2020 and President Buhari’s Tall Dreams

On Tuesday, 8 October, President Muhammadu Buhari presented the 2020 budget document to legislatures on the floor of the National Assembly. This yearly obligation, as it is known to be law when passed and second in authority only to the Nigerian constitution, is also very symbolic as it indicates a public presentation of the fact for the forthcoming year to the Nigerian people.

The financial plan housed in the national budget is never the same as the actual revenue figures once that financial year has passed. As of June 2019, the actual aggregate revenue (excluding Government-Owned Enterprises) generated by government stood at N2.04 trillion which is a far cry from the amount currently being budgeted. While the 2020 budget has an oil price benchmark of US$57 per barrel and daily oil production estimate of 2.18 million barrels per day; the benchmark oil price of US$60 per barrel, oil production of 2.3 million barrels per day, and an exchange rate of N305 to the United States Dollar was adopted for the 2019 budget. These figures do not seem to present much to be ecstatic about.

The president, of course, with some of the early signs he has shown, seems to be more optimistic about the 2020 budget which is set at a record N10.33 trillion. He has also warned that no minister can travel out without defending their presented budgets at the National Assembly.

One of the tall dreams included in the 2020 budget is the matter of the minimum wage for government workers being considered. It has been suggested by the Federal Inland Revenue boss, Babatunde Fowler, back in May that the proposed minimum wage increment to N30,000 would only be attainable if the Value Added Tax is increased from 5% to 7.5% of most commercial transactions.

However, this proposed initiative to increase the VAT rate by the Federal Government suffered a temporary defeat at the Senate a while ago when Senator Ali Ndume proposed an alternate tax (Communications Consumption Tax); different from the VAT issue.

Aside from the other excessively inflated items reflected in the budget line item, some of the other details filtered into the media and it has already rejuvenated a wild debate about what we really do with our national budget while also raising the question of whether we are really serious about moving the nation forward.

Past Nigerian presidents such as Olusegun Obasanjo, Goodluck Jonathan, Ibrahim Babangida, Abdulsalami Abubakar and even incumbent president, Muhammadu Buhari, are expected to be taking home a fat largesse of up N2.3 billion out of the total N10.33 trillion.

In a situation where a dysfunctional Aso Rock Clinic in the country is taking up budgetary sums in multiples of what is budgeted for 3 major teaching hospitals in the country; yet the president and his family still travel abroad for medical treatment, the ordinary Nigerian will wonder if budgets are really necessary after all.

In an environment where the National Assembly has only one goal of inflating their own budget annually as a share of the National Cake without recourse to shrinking government revenue, the average Nigerian may just have lost faith in the budgeting process and only view it as a rubber stamp of the Executive and Legislative government heist going on underground.

As the revenue-generating fortunes of our crude oil-dependent economy falter the more, the current administration’s shift towards over-taxing the citizenry may come off as a desperate but applaudable measure to ensure that the government is not broke. But this should also sound as a note of warning to the government to tread softly in the shift towards taxes as an alternative lest the people be further impoverished or they will resist any tax burden violently.

Source:

Pulse NG

Featured Image Source: The Africa Report

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adedoyin

Macaddy is mostly a farmer in the day who also dabbles into technology at night, in search of other cutting edge intersections. He's on Twitter @i_fix_you

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