Looking at what the government could do with the current economic austerity, the budget would be a good place to start. With debt service taking up 15.34% of the budget, recurrent expenditure at 52.35% and statutory transfer at 8.61%, the only place that the government has room to maneuver without having to fire workers or upset bureaucrats, is in capital expenditure. So instead of increasing it, the government may be forced to decrease it further, never mind the recent non-budgeted ordering of N9.6 bn cooking stoves. In the last four years, crude oil price has hovered around $100 a barrel. The Nigerian government has been swimming in petrol dollars. Looking at government figures, economists determined that Nigerias total crude oil sell came to about $470B in all 5 years of President Jonathans administration and $489B for Yaradua, Obasanjo, Abdusalami, Abacha administrations combined. Adjusted for inflation, the numbers are $488.8B for Jonathan and $594B Yaradua, Obasanjo, Abdusalami, Abacha combined. The boom is reflected in the budgets, too. In 2004, Nigeria’s budget was N1.79 trillion. In the last year of Obasanjo’s administration(2007), Nigeria budgeted N2.26 trillion. But the lowest budget in the last 5 years of Jonathan’s administration was N4.2 trillion. The additional money did not just come from the revenue from crude oil. Nigeria’s gas production within this same period has tripled. In his declaration speech, President Jonathan reported that, “in terms of gas supply, we have grown from less than 500 million cubic feet per day, 4 years ago, to about 1.5 billion cubic feet per day currently. Our goal is to attain 4 billion cubic feet per day, over the next 4 years.” These increases in revenue had not translated into a stable economy that could withstand a shock as normal as a change in oil price. In fact, as more money came, Nigeria became more unstable. If there is a worst time for Nigeria’s economy to be in distress, it is now. With the insurgency in the Northern Nigeria, each day causing more havoc, creating more victims, more destructions and more distrust in the economy, Nigeria is potentially coming face to face with that perfect storm it has avoided for decades. If Nigeria collapses in 2015, don’t look anywhere else for the blame; put the blame where it belongs- squarely at the feet of Nigeria. In the last 15 years of democracy and relative peace, Nigeria had a chance to build a strong economic and political base. But like all the other opportunities the nation has had, we squandered it. For so long, Nigeria has been in denial about the unsustainability of the corruption within its system. In time of boom, the nation can endure the waste, but in time of austerity, corruption will eat up what remains of the nation. In January of 2012, a presidential committee on public service reform discovered that top government officials in Nigeria take home N1.126 trillion a year in salaries and allowances – out of a national budget of N4.6 trillion. These public officers constitute just 0.013 per cent of Nigeria’s population. They include 108 senators who each make over $1.7m a year. That alone is $183.4 million (N28 billion). Then the 360 members of the House of Representatives each takes home over $1.2 million, which amounts to $432 million (N65bn). Again, each state governor collects an average of N200 million naira a month just as security vote. In a year, they each get N2.4 billion naira. So, our 36 governors take home N87 billion naira on security votes alone every year. Add our 38 ministers and ministers of state, 100 plus heads of federal and state agencies, over 432 state commissioners, 774 local government area chairmen or caretakers, almost 10,000 councilors and you will understand where the N1.126 trillion goes. Nigeria had a chance to trim down this N1.126 trillion waste but the leadership of the country, who are the beneficiaries, did not have the will-power to do so. Like the N260 billion naira spent from 2009 to 2013 on ex-Niger Delta militants, these wastes are nothing but hush money paid to postpone doing the right and difficult things needed to birth a modern sociopolitical structure that is fair and balanced, a structure that is sustainable in the long run. Sadly, the day of reckoning is here. The consequence of Nigeria’s self-denial is staring us all in the face. A ministry of finance committee led by Mr. Aigboje Aig-Imoukhuede looked at the subsidy claims of 2011 and discovered that the Federal Government had overpaid importers and marketers of petrol by a whopping N430 billion naira. In 2012, Ngozi Okonjo-Iweala proudly announced that Jonathan’s government had recovered N29 billion naira from oil marketers out of N234 billion certified as stolen. Whatever happened to the rest of the stolen money? Have we stopped paying subsidies two years after? Of course, not. Whatever happened to the promise to retool and repair our refineries? How much did we waste trying to repair our refineries? How much are we paying in subsidies today? Shouldn’t the subsidies we are still paying be coming down now that oil price is falling? You will think that those handling our economy will be answering these questions publicly. But no, they are not. We are beneath them. The subsidy scam is part of the elaborate corruption industry that feeds the mammoth Nigerian unsustainable structure. It has become so entangled in the fabric of the nation that a half-hearted attempt at disentanglement will result in chaos. What could not be done in a time of economic boom cannot be done in a time of economic crisis. A lot of people in Nigeria have been fed fat by corruption. In crunch time, as the nation tightens its belt, the corruption industry will morph and move and when pushed hard will marinate the nation and serve the country for the forces of destruction to eat up. Since 2009 crude oil thieves have been increasing the amount of Nigeria’s oil that they steal. According to the 2012 Ribadu Report, crude oil thieves in 2011 stole over 100,000 barrels a day. That is over $3.6 billion dollars a year. Some foreign sources put the figure of oil theft at 250,000 barrels a day. Mrs. Okonjo-Iweala in 2012 told the Vanguard newspaper that the loss to oil theft could be up to $12 billion that year. If Nigeria had closed avenues for oil theft, that oil could be shipped abroad and refined for Nigerian use, allowing the citizens to enjoy low fuel cost like other oil producing countries when they pay for just the cost of shipping and refining. Meanwhile, as oil price falls, the oil thieves are not going to go out of business. Instead, they need to steal more to make up for the losses due to falling price. With their children in the most expensive schools abroad, dozens of girlfriends to show the good things in life and with private jets to maintain, the oil thieves and all the other looters of the Nigerian economy, are going to do whatever is necessary to maintain their lifestyles. In the political arena, the 2015 election is shaping up to pitch two candidates, like none that we have ever seen, against each other. Oh, yeah, they probably have met each other in a presidential election before, but they have been transformed in some unique ways. In past elections, we used to have two distinct options that fitted into our overall narrative, which was that “the best is impossible and the worst never happens.” A foreign newspaper once described the two candidates offered to Nigerian electorates thus: “one is a fool surrounded by idiots while the other is an idiot surrounded by fools.” What is shaping up for 2015 is an unpalatable option for a weary nation. The option for 2015 is simple: If Nigeria votes for candidate A, Nigeria is finished. If we vote for candidate B, Nigeria is finished. That’s a no-win situation for a country of 170 million people. The scenarios are clear enough to those of us who care to disturb our so-called beautiful dream. saharareporters/2014/12/01/how-nigeria-may-collapse-2015-rudolf-ogoo-okonkwo
Posted on: Mon, 01 Dec 2014 20:31:42 +0000
Trending Topics
Recently Viewed Topics
© 2015