Turning Nigeria into a developed nation should be the priority

I am not impressed with the 2018 budget presented to the National Assembly by President Muhammadu Buhari even though it’s the largest in our history at ₦8.6T/$23.9B. The 2018 budget lacks the capacity to grow our economy significantly. ₦5.5T/$15.3B, roughly 64% of our budget is going to salaries and debt servicing, this is insane. Only ₦2.65T/$7.4B (31%) is going to capital projects. How can a country exiting a recession expect significant growth with this type of a budget?

A huge percentage of our annual budget should go towards economic development projects. Turning Nigeria into a developed nation should be the priority. We need audacious, innovative and forward thinking individuals coordinating, managing and driving our economy.

Nigeria has to develop at a quicker pace to catch up with countries like South Africa, Singapore, Kazakhstan, Malaysia, Hong Kong, Qatar, Norway, Israel, Portugal, Greece, UAE, Iran, Bahrain, Denmark, New Zealand and Macau. We do have more natural resources and a larger GDP than all the countries I mentioned. Our Government can not be conservative when it comes to spending on projects that will move us closer to becoming a developed nation.

I am not impressed with the Ministers at the helm of the Ministry of Budget and Planning and the Ministry of Finance. Our budget preparation, presentation and implementation is very poor.

When the 2017 budget was presented in December 2016, the Minister of Budget and Planning told Nigerians that his Ministry would start work immediately on the 2018 budget. If the goal was really to get the 2018 budget passed by December, why did it take the Executive 11 months to prepare and present the 2018 budget to the National Assembly?

The National Assembly has prepared a bill that would require the Executive submit our budget to them by the 1st week of October at the latest. I commend this move but realistically the budget should be presented to the National Assembly in July before their 2 month summer recess. This gives the National Assembly more than enough time to go through the budget and have it passed into law by the final week of December at the latest.

When it comes to budget implementation, we have an abysmal record. Poor budget implementation over the years has stunted our development and growth. Nigeria is littered with abandoned or uncompleted Government projects because of poor budget implementation and liquidity challenges. Poor budget implementation and our supposed liquidity problems can be solved easily if we have an Economic Team that is resourceful, audacious, innovative and hands on.

Nigeria has millions of hectares of arable land, we have almost every mineral you can think of in commercial quantities and a population in the tens of millions that are ready to work. The inability of our Economic Team to grow our revenues exponentially is mind boggling to me.

The Federal Government’s projected revenue for 2018 is pegged at ₦6.6T/$18.3B. For a country that claims to be the Giant of Africa, the 27th largest economy in the world and the largest economy in Africa by GDP, this is laughable. In 2016, Apple’s revenue was $215.6B, that’s almost twelve times what the Federal Government is projected to earn in 2018. Apple is a technology company based in Cupertino, a town in California with a population of roughly 61,000.

With all our human capital, mineral resources and the millions of hectares of arable land we possess, the Federal Government won’t even generate enough money in 2018 to match what Nigerians in the diaspora remitted home in 2016, what a shame. We have about 15 million Nigerians in the diaspora, that’s about 8.3% of our current population. Nigerians in the diaspora remitted ₦12.6T/$35B to Nigeria in 2016, about twice what the Federal Government is going to earn as revenue in 2018. I repeat, we need audacious, innovative and forward thinking individuals coordinating, managing and driving our economy.

The National Assembly need to amend Section 38 of the CBN Act. This move will enable Nigeria turn into a developed nation in about 10-20 years. Why do we keep borrowing from outsiders when the Central Bank of Nigeria (CBN) is supposed to be a lender to the Federal Government?

Section 38(1) of the CBN act states that the Central Bank of Nigeria (CBN) may grant temporary advances to the Federal Government in respect to temporary deficiencies of budget revenues at such a rate of interest as the Bank may determine. Section 38(2) states the total amount of such advances outstanding shall not at any time exceed 5% of the previous year’s revenue.

The Central Bank of Nigeria (CBN) should be able to print Naira notes equal to our budget total and give it as an advance to the Federal Government as soon as the budget is signed into law at an interest rate not exceeding 0.5%. Why should we go elsewhere to borrow when we own a bank that prints money?

The Central Bank of Nigeria (CBN) printing trillions of Naira (₦) every year as a budget advance will also strengthen the position of the Naira (₦) against top global currencies. Contrary to what we are being told by the Central Bank of Nigeria (CBN), there is not enough money in circulation.

With section 38 of the CBN act amended, the Federal Government will be able to release funds in its entirety at the beginning of our financial year to every single Ministry, Agency and arm of Government as opposed to releasing funds in tranches. This process will guarantee 100% budget implementation before the end of our financial year. It will also enable the Federal Ministry of Budget and Planning, the Ministry of Finance, the Accountant General and the National Assembly to effectively hold Ministries, Agencies and every arm of Government to account on how our Money is spent.

We should also introduce a debt ceiling clause into section 38 of the CBN Act. A debt ceiling would be like a cap in regards to money that we can owe the Central Bank of Nigeria (CBN). A debt ceiling of let’s say ₦108T/$300B will be perfect. This will give us room to allocate more cash to capital projects in our annual budget for the next 5-10 years. At a minimum, 70% of our budget should go towards economic development projects. Let’s say our recurrent expenditure is ₦3.5T/$9.7B like it is for 2018, our capital expenditure should be ₦8T/$22.2B at the minimum.

Even if we have an annual deficit of ₦10T/$27.8B for the next 5-10 years because we are pumping money into economic development projects, it will be worth it. Once we have world class infrastructure with an efficient and effective security apparatus in place, investors and industries will flock to Nigeria in droves. Nigeria will become the number one hub for business, manufacturing, agriculture, mining, retail, entertainment, export and tourism on the African continent. We will be able to generate hundreds of billions of dollars in revenue that will translate into a budget surplus for us every year.

We have to start thinking big, it’s the only way. We can take great ideas from countries like the United States, China, UAE, Japan, South Korea and so many others to turn Nigeria into a developed nation in a short amount of time. I am going to say it one more time, we need audacious, innovative and forward thinking individuals coordinating, managing and driving our economy.

Written by Nosa Eweka