WHY NIGERIANS ARE GETTING POORER BY DELE SABOWALE
WHY NIGERIANS ARE GETTING POORER, BY DELE SOBOWA LE “Behind the facts of economics are the facts of psychology… The emotions of fear and confidence, the judgments of doubts and certainty constitute a very important medium through which we see economic values” – Arthur S Dewing, Harvard Business Review, 1923. WHY NIGERIAN BUDGETS OFTEN FAIL “Whatever a man prays for, he prays for a miracle; every prayer reduces itself to this; Great God, grant that twice two be not four” – Ivan Turgenev, 1818-1883, VANGUARD BOOK OF QUOTATIONS, VBQ, p 198. Experiential Learning: Building the Wealth of The NationNo federal or, as far as I know, state budget since 1999 has been successfully implemented as written by the president or governors and approved by the lawmakers in Abuja and the states – for one cardinal reason. Almost invariably, they are at best prayers by the Chief Executive Officers (CEOs), rubber-stamped by the legislative branch; and nobody monitors execution from the start to the finish. Occasionally, the CEO returns to request for supplementary budget approval; receives it without anybody among legislators asking questions about projects which were slated for the year. The over 70,000 abandoned projects littering Nigeria, representing monumental waste of public funds are emblematic of the failure of democracy in Nigeria. Neither the executive nor the legislative branches had served the people well. Annual budgets often fail because they constitute more of political gamesmanship than economic plans. To begin with, under civilian governments, since 1999, no budget presentation had started with a review of the current year’s performance. Yet, every adult should know that the present situation is a result of choices made in the past; and it will influence the possibilities available tomorrow. Having failed to deliver on most of their promises, the CEOs ignore the results; present a new year’s budget as if the nation or state is starting on a clean slate without a lot of baggage from the past. Nobody needs to be an economist to realise that this is self-deception. RECURRENT FAILURE OF BUDGETS SINCE 1999 Insanity has been defined as doing the same thing over again and expecting a different result. After Obasanjo’s first two years in office, no Nigerian president should have got into the trap of treating the annual budget as a political document; instead of a framework for economic development and social advancement. That sense of responsibility would always dictate that the framers of the budget be as truthful as possible in their projections. Furthermore, they should always admit it when they fail and set about finding out the reasons for failure. The lessons learnt would help subsequently to achieve better results. Two examples of wishful thinking pervading budgeting at the federal level will help to illustrate the point. Every budget, since 2009, had been based on the assumption of 2.3 million barrels per day, mbpd, of crude oil produced and exported. Yet, records easily available to governments since then would prove beyond reasonable doubt that Nigeria has been producing, for export, approximately 1.4mbpd virtually every year. The records for 2022, 2023 and now 2024 have not altered the pattern. Yet, despite the overwhelming evidence, the budget for each year had been based on 2.3mbpd. Consequently, the budget each and every year was based on predictable negative dollar revenue variance – which would later result in three other shortfalls. One, lower than expected dollar supply will impact exchange rate negatively; the naira will depreciate further. Two, budgeted aggregate deficit will be exceeded. Aggregate revenue would fall below expectations; unless the currency is devalued and inflation rate increases. The Nigerian economy has been suffering from all these budgetary miscalculations for 25 years; and we are about to enter a new year without altering our…
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