The 2015 Budget of Austerity The 2015 Budget Appropriation Bill - TopicsExpress

The 2015 Budget of Austerity The 2015 Budget Appropriation Bill by the Federal Government has been tagged the Budget of Transition, a budget that would transit Nigerians not only into the second term of Goodluck Jonathan’s regime and the continuation of the “Transformation Agenda”, but a transition from an oil dependent economy to one that is diversified to non-oil driven sector. The regime has announced some austerity programmes where it intend to raise N10billion on surcharges on private jets, mansions worth N300million, yatchs, wines and drinks, another increase of 5%. This it argued is to be targeted at the rich. But the N10billlion to be raised from all these in an expected revenue of N4.358trillion too insignificant and the differences between allocation for capital expenditure and recurrent expenditures contradicts all the supposed transition that the regime claims it is implementing. The real plan that has not be said is the attack coming against the workers and poor Nigerians. The budget we have before the National Assembly is clearly a “Budget of Austerity” for the working class and poor Nigerians. The N4.357trillion budget proposal to the National Assembly only budgetted a sum of N627 billion for capital expenditure (inclusive of Sure-P) while the chunk of N3.97 trillion which goes to recurrent expenditure. The impression is that if the total recurrent expenditure of N3.97 trillion is removed from the aggregated budget expenditure of N4.358trillion then what is left for capital project is actually a paltry N387trillion, a mere 9% of the budget for Nigerians. In their professional act of deceit and raising of false hope, the Coordinating Minister for the Economy and Minister of Finance, Ngozi Okonjo Iweala, has boldly announced to the world that ordinary Nigerians will be protected from falling oil prices, which obviously contradicts the allocation towards capital expenditure and pro-people policies. The budget sent to the national Assembly does not have ordinary Nigerians in mind. The fall of oil prices is the excuse for this current situation. Unlike the past 6 years when oil prices was sold above $100 per barrel, the recent fall to below $60 per barrel has revealed the ineptitude and the high level of corruption carried by the Jonathan regime. For one it has failed to save the excesses dollars when crude oil was above its previous bench mark of below $80 per barrel. Nigeria is one of the OPEC member nations with the lowest foreign reserve of $35billion. Saudi has $739billion, Algeria has $183billion, Iran has $109billion Libya has $100billion, Iraq has $80billion, UAE has $78billion, Qatar has $43, Kuwait $30billion and Venezuela $21.5billion. In essence Nigeria is the bottom three one of the lowest Foreign Reserves in OPEC. What is clear is that countries with high foreign reserves have more staying power in the short and medium term during this period of oil crises than those with low foreign reserve. Nigeria with a mono-culture posture, which crude oil accounts for 90% of foreign revenue and 80% of GDP, the fall of crude oil price would affect the working class and poor Nigerians adversely since there is no savings to cushion the negative effect. Still yet the noise about transformation that transforms nothing still continues, Imagine a regime that wants to transform Nigeria, It has budgeted N943 billion to service the debt it owes its master, while budgeting a paltry N387 billion for Capital Expenditure. According to the Debt Management Office Nigeria’s Debt stands at N10.48 trillion as at end of September, and external debts of both the Federal and State governments stands at $9.52billion (N1.48trillion). No mention of what programmes this debt were used for, now the master’s debt would have to serviced, the burden of which would be shouldered by Nigerians. Debt serving which favours the ruling class shows that the welfare of Nigerians is not in the agenda. What is more touching is that it is only the interest rates of the debt that is being serviced while the principal is left intact. No mention of when the debt would be cleared, instead all indications are pointing to the direction that the 2015 budget would be funded by debt. The 2015 proposed budget is another indication that the ruling class in not capable of addressing the crisis at hand. The N387billion out of N4.357 trillion budgeted for capital expenditure carries the implication that there wont be job creation, investment in industries and other infrastructure projects. It shows government has no plan to cushion the impact of the economic crises that is already biting the masses. All Ngozi Okonko Iweala is saying and has been saying is a scam, only to raise false hope because we are approaching an election year. The budget and the boasting are completing out of touch with the reality on ground. The fact still remains that austerity is the only plan the regime has in stock for Nigerians. To understand the lies of Ngozi Okonjo-Iweala, who boasted that the regime would not borrow money to fund the budget, we need to look at the budgetry benchmark which the budget is pegged. The benchmark is $65 per barrel when crude oil internationally is sold at $60 per barrel and still slippery down to the abyss. Where would this bourgeois economist get 5dollar and even more to fund a deficit budget without borrowing? What is clear is that a deficit budget is presented before the National Assembly. The burden of which would be thrown at the working class in the future. In the same vein, the exchange rate of dollar to naira as captured in the 2015 budget is $1 to N165. But the current devaluation is a big pointer as $1r is exchanged at N188.50. The crises at hand shows that naira would fall when the Central Bank of Nigeria are tired of defending its continuous devaluation. In the absence of Nigerian products, aside crude oil, sold abroad to earn hard currency for Nigeria, it would be difficult to meet the demand of dollar locally. How would the regime meet up its budgetry demands with a weak naira is yet to be stated. When would the CBN depleting the foreign reserve to defend the naira if crude oil prices continues to slump? A devalued naira means highcost of import, low cost of export and high cost of goods and services within the economy and a shrinking purchasing power. The working class and the poverty stricken masses would be the worst hit as we move into the heart of the crises. The Jonathan regime has been talking about agriculture and diversification from dependency on crude oil. But looking at the budget, the regime is still hoping that oil price climbs to its previous height. Hypocritically, the regime still hopes to sale about 2.27million barrels of crude oil a day when it has not been able to find a replacement to her lost market, the United States. Add to that is the crises of overproduction of crude oil at the international market. As we speak the total output of crude oil internationally is 90million barrels per day, OPEC cartels churns out 30million barrel while the non-OPEC produces slightly over 60million barrels. An excess of over 2million barrels of crude oil is above the demand of the market. It is a tough competition out there for Nigeria to scale through, not to mention the low economic growth in China and United States, and near recession in the European Union which is affecting the global economy. Moreso, it is not also certain that the production of crude oil at 2.27million barrels of crude oil can be produced daily taking into account oil theft, of which no individual have been brought before the law. The Niger Delta Militants who were given contracts to secure Nigerian waterways in the creeks are been paid billions of naira, and yet under their watch 400,000 barrels is declared missing daily. To tell you how unserious this regime is to address the crises. No plan to revamp the present moribund refineries in Kaduna and Port Harcourt. The promise to carry out Turn Around Maintenance on our four refineries during the January 2012 mass movement has not seen the light of the day. The four refineries still produced 10% of their combined installed capacity of 445,000 barrels per day, meaning that the currently estimated $10billion dollars annually spent on refined products would continue in the year 2015. In 2010 NNPC signed a $28.5billion Memorandum of Understanding with the China State Construction Engineering Corporation (CSCEC) Limited to build the NNPC Green field Refineries in Bayelsa, Kogi and Lagos States so far none has been built four years after. After all said and done BPE said Nigeria needs 113billion dollars to build infrastructure across the country. No savings to fix this demand. We have not mention the capital to build industries to employ the over 50percent unemployed and underemployed. The picture is becoming even clearer as the Minister of Finance has promised to implement part of the Oronsaya’s report of rationalization and restructuring in the year 2015 all in the bid to cut cost. Workers in Nigerian civil service should be prepared for the attack as the regime has no plans to cut their over-bloated pay check and allowances. Sack and mass retrenchment is at the top of their agenda. It is now they know that there are ghost workers in the service and there are duplication of function within different commissions, agencies and parastatals. Under the rule of the capitalist and their imperial masters there is no hope for common man in Nigeria. All hope is not lost. The crisis can be address when the working class takes over power. The enormous amount spent on debt serving would end, same applies to the debts. The capital that we need to fix Nigeria would not fall from heaven, it is here with us. It is in the hands of the ruling class. All we need to do is to expropriate the wealth in the hands of this few super-rich. Nationalized the multinational corporations draining the country’s wealth, nationalized the banks and other big businesses, and have it placed, controlled and run by the working class. Reinvest this enormous capital into the economy, revamp old and build new industries and infrastructure, and engage the large army of the unemployed. Have working hours reduced to 7hours so there can be capacity to engage more hands. This is not a rocket science, it is possible. The challenges are surmountable but only by a revolutionary government of the working class. The working class must wake up to its historic responsibility in Nigeria.