IDEAS Radio 11 October 2019

IDEAS in the Budget

Aghogho Oboh: Rainy, rainy day in Lagos, seventeen minutes past four.  I am Aghogho Oboh. Public Square, with the usual members of the Square.

Ayo Obe: Aghogho, you know, if we … you know, with IDEAS, our focus is Integrity and Ethics and you know the old little rhyme about:

“The rain it raineth on the just

And also on the unjust fella

But chiefly on the just, because

The unjust steals the just’s umbrella!”

So …

AgO: Rotimi Sankore will help decipher that one, most definitely!

Rotimi Sankore: I will leave it to listeners to unravel themselves…

AO: No, it’s just that umbrellas can … the rain … the Bible …  the Good Book says that the rain falls on everybody, but a wit added that it falls more on the people who are not sinners, because the sinners have stolen the umbrella of the righteous.  So, because being sinners, they steal. Anyway … but so, my point is that it’s part of the … when it rains like this in Lagos, at least for the period of the rain (which is still falling) then we tend to … we tend to fall, the whole traffic seems to build up, and so …

AgO:  And so, the discussions we will be having  today, will be on whether the Budget was made for the rainy day or not.  This week it’s been the Budget 20 … for next year, presented by President Muhammadu Buhari to a joint sitting of the National Assembly.  And the clock is ticking, because the common saying from the Executive and National Assembly has been that they want to go to a January-December schedule.  I don’t know whether that’s possible or not. But the programme, you can follow on Twitter at @PublicSquareNG, @NigeriaInfoFM, @AghoghoOboh, @RotimiSankore, @ideasradiong, @naijama; any of these handles, you can tweet at us.  We can also take your questions and comments on WhatsApp 08095975805. 

First with the IDEAS segment.  If we’ve got any of those comments, I will have to refer them to Ayo after she’s finished with the IDEAS, because we get a number of comments on the IDEAS segment on WhatsApp, so…

AO: Oh really?

AgO: Oh yes, we do.

AO: Well, unfortunately those questions may have to wait until the following week.  But, I mean, it’s quite interesting because the … when we talk about the Budget, I know that in your main, in the main Public Square you are going to be looking at the wider political picture, the wider economic picture that it tells, but for us from the IDEAS perspective, as you know we’re looking at Integrity, we’re looking at Ethics and we’re looking at Accountability, and all of those play into the value of Democracy in the eyes of the electorate.  So that for … from an IDEAS perspective, we want to say … to see the extent to which the promises that are made, which cause people to exercise their democratic choices, are reflected in the Budget that the President has presented to the National Assembly. Although our main focus Rotimi, will be on the National Budget, I think that we can’t afford to overlook the fact that we also have our State Budgets, and you know, they are always giving them these tags: “Budget of Hope”, “Budget of that”: and so this one is the “Budget of Continued Consolidation”, but … speaking from one of the issues that is of particular interest to me, I have to say that the mere pittance awarded to the Social Investment Programmes was a big surprise, because it’s one of the things that distinguished the current administration, not just in the …

RS: That is, the N30 billion?

AO: Yes, the N30 billion as opposed to what had been being paid before.  Not just because, the way that programme was being administered was being said to be very much on a non-partisan basis, it wasn’t that the list of the poor was drawn up on the basis of who was on the party register, but a real assessment of the … of who was poor and their needs.  And now, we find that even though in the very same Budget that he’s reaffirming his commitment to the Social Investment Programmes, the President is announcing a figure of just N30 billion for the Social Investment Programmes which is … I mean, it is a more than 90% drop in the … 

RS: And it’s one of the few forms of, if it can be described as ‘social security’ … 

AO: Yes!

RS: … in the process.  So, in other words, a reduction means a reduction in social security.

AO: Yeah, and you see, I think that people also would end up looking at the amount that is devoted to the Social Investment Programme … I mean, and the President has tried to also corral under that the money that had been devoted to … I mean dedicated rather, to the North East Development Fund, I’m not sure about NNPC … 

RS: That’s a very specific cost.

AO: Yes, but he’s trying to sort of kind of corral them together, but even then, the amount is really small, and I don’t know whether … I don’t know the extent to which that is a promise fulfilled, or how we see it?  I don’t think that the presidential declaration of commitment to Social Investment Programmes sits easily with this. And I’m aware that we have State Governments that have their own Social Investment Programmes, but not all State Governments do.  And I think also that it doesn’t sit … that that kind of pittance doesn’t sit very easily when we look at the huge amount that’s devoted to the running of the Presidency, the running of the National Assembly … I may even say the running of the Judiciary, but that you compare those amounts, huge as they are …

RS: The judiciary many people would argue, is underfunded.

AO: Yes it may be underfunded, and many of … many also feel that the National Assembly is grossly overfunded.  There it goes, but …

RS: So much so, that some people are now calling for the scrapping of one chamber.

AO: Well, I mean, as we saw in Italy, they recently – and let’s not forget that Italy is a country where somebody who makes a living as a comedian almost became the Prime Minister.  His party, the Five Star Movement, certainly won a huge number of votes, so the comedians had decided … the people who like comedians in government, had decided that they should abolish their upper house and save themselves a huge amount of money.  But here, it’s not just that our upper house is not smelling the coffee or hearing the music of time, they are actually doubling down on the amounts that they think they are entitled to, and you find some of them … the ones who have nothing to say wisely keep silent, but the ones … but there are some who will even come out and say, and use terms like “deserve”!

RS: Well they claim, haven’t they, that they work very hard.

AO: Yes, they do, but let me not divert myself away from the National Assembly to the … I mean from the Budget to the National Assembly, because I think that we also have to look at … when you’ve had a situation where the International Monetary Fund has been to Nigeria and has looked at our economy and our finances, and has warned against … I mean, I think the term they used was “over optimistic projections”, I think that there’s a degree …  it becomes a question of honesty and therefore … 

RS: And the President has responded that their data is not …

AO: … of Integrity.  Well no, I’m coming to what the President has said, but I think that there’s a …  when it comes to … you get these clear statements and then you … it’s a matter of honesty and therefore from our IDEAS perspective it’s a matter of Integrity, whether you pretend that all is well and you say that: “I am still going on with my projected income from this source and that source” when in fact you know that that money is not coming, and you also know that the monies that are going to be paid out first, are not necessarily those that will be of the greatest benefit and value to the people of Nigeria.

But to come back to your point about the figures, you see, it’s one thing for somebody who’s not in government to make freefall statements about the source of statistics and figures, but we have in this country the National Bureau of Statistics which is extremely well regarded, and part of the reason why it’s well regarded and well respected, is because its figures know no political colour.  It just … it may have wrong methods or you may quarrel with those … but you cannot say that the figure that yesterday was X, is now wrong. When it was yesterday you were happy with that figure being described as X, but today because it doesn’t … you now start … attacking the source of the figures, and I think this is part of … again, it goes to Integrity about how you present yourself. Because if you’re not being honest to the people, then the people also have to ask: Are you being honest to yourself about what your political … what your economic prognosis, projections and so on are?  I’m aware that the government is now boasting that it is having a lot more income from non-oil sources and that therefore, we shouldn’t say that because the price of oil is this or that, or because oil production is that or something else, that income will not be as it is. But I think that we should be … that there should be some clarity about what is expected, because this is a country where two years ago, the big boast was how much was being realised from JAMB, how much was being realised from the Customs, now that honest people were in charge. And if people of Integrity were in charge last year, then is that money being reflected and so on?

RS: There’s a question regarding whether the Budget is able to fulfil the promises made during the election which a lot of people have asked.  Gbolahan Olojede who’s an economist, has joined us, an accountant as well. Welcome Gbolahan.

Gbolahan Olojede: Thank you very much Rotimi.  

AO: Hello.

GO: Hello madam, good to see you.

RS:  So your big question for Ayo Obe’s IDEAS segment is as to whether the Budget comes anywhere near fulfilling the promises made during the election, to lift millions of people out of poverty?

GO: Out of poverty …  It’s a far cry from where we need to be.  If … the other time I was talking about this, I said a good way to have a feel of whether the size of the cake has increased, is if we decide to convert it to dollars; and if you take our budget over the last decade and you denominate it on the dollar rate for those respective years, you’ll be surprised that the cake size has remained literally around the same.

AO: But is it right for us to do that when in 2015 $1 was going for N180, and in 2019 one dollar is going for about N360?

GO: Yes, that’s exactly what I’m saying, because if we leave it in Naira, we’ll have an impression for example, that in 2012 when Budget was N4.9 trillion and now it’s N10.33 trillion, the impression is: Oh, it has doubled …

AO: Yes, but we’re not spending dollars in Nigeria!

GO: We’re not spending dollars in Nigeria.  But we now have a lot of things that have dollar implication.  We earn dollars!

AO: Yes, but if I’m buying yam in the market, I’m not buying it in …

RS: The budget is anchored on the price of a barrel of oil.

AO: You get more money!

RS: And most of the machinery …

GO: More money, but what can it buy?  That’s exactly where I’m going. So today, I might have N10.33 trillion: does it have the purchasing power of what I will do with …   N10 now, does it have the same purchasing power as N10 in 2012?

AO: Well, as I said, I mean, from … in IDEAS we deal with Integrity, and Ethics and Accountability, and that’s why we’re talking about whether promises have been made, are they being kept?

RS: We need to take a break for the ads.

AO: Then we’re going to come to the end of our IDEAS …

RS: No, not necessarily, but we do need to take a break now … 

AO: Ok, I’ll come back, I’ll come back and wrap up.

AgO: So let’s take a quick break, be back with this engaging discussion of the Budget 2020, please keep listening.

[BREAK]

AgO: Alright welcome back, it is twenty-four minutes to five.  How time flies when you’re having a great discussion. With IDEAS, Ayo Obe.

AO: Yes, I should just wrap up the IDEAS segment, because I hear that we’re on the cusp of our 15 minutes slot.  But, I just wanted to ask, because … I’ve already complained about the lack of investment, or the reduced investment in Social Investment Policies … it may be that it’s hidden somewhere, and …  an ignoramus like me does not know where it’s been hidden. But another aspect is the infrastructural investment, because … a lot of us believe that with Nigerians, you give us the tools, and we will do the job, we will finish the job.  And, so that while it may not be clear where certain monies are coming from, by the time Nigerians have roads and electricity, that … By the time we have those … let me not say ‘if’, let me say: by the time we have those, then in theory, the economy will take off, so is it that we can see that there is some investment going into these areas of transport, electricity and these other infrastructure which will allow Nigerians to actually create their own wealth by themselves?

GO: Yes.  On the face of the Budget, yes.  But the problem over a couple of years now has been how much of the Budget is actually funded?  That is number one. Number two is … the number two I hope we’ll get past it this year. If you look at last year, capital releases did not start until the third quarter.  So if you start to release for capital projects in quarter three, how much can you really do from there until …

AO: Expect to do yeah.

GO: … here we are, maybe we’ll have the Budget in January, hopefully if we have …  look at 2018 Budget was … I think it was 67% funded, you know, so we had expected 100%, we got 67%, it means that whatever we have allocated had to be pro rata.  Our entire capital budget again, is likely to be borrowed.

AO: Oh dear, and that means that we’re going to be spending a huge amount in Interest.  

Anyway, as I said, I’m not going to … I think I should draw a line under my IDEAS issues, because I think that the whole essence of what we’re effectively looking at, is how much honesty there is about what we’re getting, what we intend to do with it, and what we can actually do with it.  And my sense is that expectations are being raised, a lot of stuff is being papered over, and that at the end of the … when we come to this point next year and the President is reporting on the performance of the 2020 Budget, we may find that we don’t have a lot to show for it, but as I said, I’m hoping that …

GO: … that that will not be the narrative by the time we get to that junction.  I hope so too. For me, I said, maybe we can make this year a Budget of Trust, in which we go back and build a bit of trust with the people …

AO: But how … can we build trust when already we have a problem with the …

GO: How we do this, is if we said … We say we’re not bringing in new projects, for example.  So what it means is that we had said we will going to complete say Lagos-Ibadan in 2020, let’s just …

AO: … Finish it!

GO: … complete Lagos-Ibadan, and people see and they say, oh, the road is there and standing!  If we’ve said we’re going to do this other one …

AO: The railway.

GO:  … let’s just put it in place and let people see it.  When you do that, you build, you rebuild a lost trust …

AO: Then you create trust. 

RS: Not launch the train, use it small for one week, and then after that, there’s no train again! 

AO: Well, I want to thank you for coming on to the IDEAS segment.  I missed the young lady from BudgIT, but … because I know that rain was also beating her road here, but … so I will leave her in the Public Square, and hope that another day I will catch you with my IDEAS, and we will see about Integrity, Democracy, Ethics and Accountability.  So thank you very much listeners for joining us in the IDEAS segment of the Public Square. Back to you Rotimi and Aghogho.

RS: Thank you so much Ayo.

So … we switch gear slightly to …

AO: Now you can just talk about money, you don’t have to worry about Ethics and Integrity!