18 November 2012

Nigeria: Developing the Real Sector Should Be the Focus of 2013 Budget - Okengwu


Dr Emeka Okengwu is the Chief Executive Officer of Anthill concepts limited and also an expert in development economics. In this encounter with Uche Uduma, the accomplished scholar who was part of the National Technical Working Committee, Vision 20-20-20, takes a look at the grey areas of the 2013 budget as it relate to agriculture, infrastructure and social development.

Can you access the 2013 budget as it relates to agriculture, infrastructure and social development?

That might be a little bit unfair to the whole budgeting process. If you want to isolate agriculture regarding how it relates to the 2013 budget, it simply means probably that, it is the only item in the budget that can help grow the economy or help achieve the budget implementation. I think it might be better and easier to be able to look at the whole budgeting process and how it can affect our socio economic development programmes.

In doing it, we will only be fair if we don't isolate this budget, because remember that the midterm expenditure framework is supposed to be a three-year programme that should be able to capture all the key performance indicators and the midterm sector strategies of the government. It is important that when you try to discuss economic programmes, you don't take them with one little window because the 2013 budget is actually not a stand-alone budget; it is supposed to be a continuation of the whole picture of Jonathan's administration.

What we should be talking about is the previous budgets, because remember we still have one that is running except you are now saying you are giving on that one. Because as at the past three weeks, I understand even the third quarter of the budgetary allocation has been released. You know the capital votes to the MDAs, so let's not give up on the 2012 budget.

While we are talking about it, I think it is important because we mentioned agriculture which is very key to national development as they were but what also is germane for everyone to understand is that agriculture as a stand-alone component cannot help national growth and development because there are concomitant factors to agriculture that are very key. This is critical in whatever we want to do as a country. How does this 4.9 trillion budget change the lives of Nigerians?

Someone in Asaba just told me that if you come to Asaba, a basin of Garri is now N6,000 because someone is now mopping it up to feed those in camps. We should be able to find how much are we spending to be able to keep this camps running on a daily basis and whether it is contributing to the budgetary or your expenditure profile. That is when you can begin to ask if we were ready for such emergencies. What is the role of our grain reserve system, how much of these grains have we been able to release from our food security programme which was the reason those silos were built in the first place?

This food they are taking to the camps, where are they getting it from? How is this mass procurement affecting food security? This is where national and strategic planning should come in. This is where data is very critical. You have for instance, 50 camps with 200,000 in them and you will need to spend probably 200 or 300 naira as cost of feeding.

What that means is that, if you multiply 200,000 by 500 naira, that is the cost of feeding these people on a daily basis, where is that money coming from, where are the food stuffs coming from? This is where you can now begin to now talk about how has agriculture fared?

Have we been able to develop the frame work that now allows us to get what we can call food security programme. This is because part of the essence of building these silos is when you have excess food produced by farmers, the government mops it up and then puts them in as strategic reserve. Is this the matter at the moment? Is that the case?

Is the budget capable of addressing the huge unemployment and poverty among the poor in Nigeria?

The answer will be yes and no. It will be in the affirmative when you recognize that what the budget is supposed to do is to present what you can call the prevalent environment that can allow economic activities to blossom. This meaning what the government does is to be able to regulate and be able to make certain that you have environment that will allow the private sector to operate.

The government does not generate employment in any economy and a budget is not supposed to generate employment directly. What the budget or government's programmes is supposed to do is to be able to open up windows of opportunities for private sector participation. It is a 'no' answer when your budget is not able to meet these expectations. If you look at the budget the way it is done, it is a budget we could drive a little farther up the hill, we might be able to get an equilibrium where we can begin to see more of government limiting its role in social services and critical infrastructure and then probably staying back where it is able to engage in programmes that will be able to open up the space.

Answering 'yes' or 'no' directly might be unfair to both myself and the people who went through pains to bring this budget together, but what I would like to do is to look at the indices and the indicators in the budget. After then, I can ask if those things that were put together can encourage employment. Now procurement should be able to allow for employment generation because it creates demand but this things that we are now procuring using our recurrent expenditure, do we have the capacity to produce them here? If the answer is 'yes', then the budget, of course, can be able to create employment because it means that you have a trillion or more naira depending on what volume of your recurrent is going into procurement which is your productive sector.

If people are producing and agents are buying and government is procuring, then you are creating jobs, but if these things that are going to be run from the procurement sub sector of the economy is going to be imported, you will find out that you are going to be limiting these things to those we call 'oppressor bourgeoisies'.

If you are talking about a situation like the power sector, what percentage of our power equipment is going to be done through companies that are producing the cables, the transformers and all other things? What percentage of it are you producing locally in your economy when you go about buying these things from Russia, Ukraine and so on and so forth. How then does this create employment?

There is an ongoing controversy between the executive and legislature over oil bench mark. The presidency pegged its budget at 75 dollars per barrel, the house projected 80 dollars while the senate budgeted 78 dollars, what is your view about this.

This debate is not about how much we are going to be selling our oil, the debate is how much we are hedging our expectations on. It's really nothing that can't be resolved, the two sides are actually right. Government said people are actually benching under very low bench mark.

Because the economy of the world is now dependent on oil and gas, the whole world and America are pushing against dependence on oil. Anything could have happened and it is not our game plan so we don't have any role in this oil game; however, I think to that extent, you can say the government is right.

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