It’s an ugly reckoning time for Nigerian protesters who for the past two weeks marched the streets of major cities demanding the end to police brutality. Violent thugs and looters have successfully infiltrated the rallies, which predictively precipitated arson, looting, and avoidable loss of precious lives. The mass demonstrations had begun with the chief objective of bringing an end to the erstwhile notorious special police squad known as SARS. Within the last few days, however, the protests have increasingly turned violent in several states, which resulted in the enforcement of curfews in Edo, Lagos, Rivers, Osun, Abia, Ondo, Ekiti and Imo states so far.
Meanwhile, the federal government had penultimate week presented a federal budgetary expenditure plan of N13.08 trillion for the year 2021, backed by a projection of N8 trillion revenue line, and a whopping fiscal deficit of N5.2 trillion. This is coming on the backdrop of Covid-19-impacted the financial outing of 2020, which saw a budgetary performance beleaguered by a N4 trillion deficit as at last July, projected to hit N5.6 trillion comes December.
Recall that as part of the federal government capitulation to the #EndSARS protesters, the National Economic Council has mandated that state governors interface with “protesters” in their states, and co-opt them into a special security committee. This would potentially lead to the establishment of another official citizen-to-government channel that would give the youth a seat at the table, thus enabling them to advance their strategic demands for interventions into Nigeria’s problems.
Hence, most pragmatic thing to wrap up the series of citizens’ protests should be a prudent demand for a national socioeconomic reform, which must usher in a new national order of political and economic leadership. This could begin with tackling sectoral budgeting lapses, public spending inefficiencies, and rising levels of external indebtedness, which threatens the economic security and the future of Nigerians.
Over the course of the protest weeks, the demonstrators have shifted their now-famous 5-Demands from items that sought to categorically lead to ending SARS, to items that will converge toward complete police reform, and even more. As long as the protest remains a collective project for a better Nigeria, it wouldn’t be out of bounds to further demand for a realistic one-year reform plan to be bankrolled by an appropriation law in the form of 2021 national budget.
#EndSARS protesters should now clamor for some “5 Fiscal Demands” targeting the 2021 budget proposals as an agency for experimental socioeconomic reform. Since the annual budget legislation sufficiently defines the short-run socioeconomic trajectory of the country, a demand for budget alteration to encompass some key spending adjustments according to vital sectoral emphasis should be the next hashtag-campaign.
Such “5 Fiscal Demands” would address the problem of repeated deliberate inadequate funding of socioeconomic sectors that hit the common people hardest. By its face value, the 2021 appropriation bill doesn’t seem to avail a vision of delivering on the acclaimed Nigerian government economic sustainability plan goals, which include accelerating the pace of economic recovery, promoting economic diversification, enhancing competitiveness and ensuring social inclusion.
Judging by the performance of the Revised 2020 revenue and expenditure budgets, the key assumptions behind the 2021 proposed budget could only indicate very little prospects for robust economic recovery. Already, about 25% of the 2021 budget allocations is billed to service debts, even as the oil revenue-dependent economy continues to be hobbled by falling oil prices!
The 2021 fiscal parameters compose of oil price benchmark at US$40 per barrel, matched by the projected oil production volume of 1.86 million bpd. US dollar to Naira exchange rate is pegged at an inflated ₦379/$1, with annual inflation expected to close at 11.95 percent. Despite a projected GDP growth rate of 3%, ₦3.34 trillion is billed to go to debt servicing, while capital expenditure is put a little over at ₦3.60 trillion.
With a figure of ₦5.65 trillion for non-debt recurrent expenditure, it means one-third of the total expenditure is going to personnel cost, making it the largest single aspect of the aggregate expenditure. Despite its theme of “Budget of Economic Recovery and Resilience”, another gloomy fiscal year in 2021 is an entirely foreseeable outcome— and a completely preventable one, if, and only if the expenditure estimates are adjusted to reflect the surging social crisis tormenting Nigerians. Thus the citizens could collectively demand for a benchmarked funding for five key sectors of defense, education, health, agriculture, and employment generation.
On security and national defense, the federal government must go beyond repeated assurances, and financially overhaul the national security architecture to reflect existent constraints to tackling Nigeria’s myriad of security challenges, from Boko Haram, to kidnapping and banditry. Budget wise, the security sector is in need of comprehensive measures that will curtail spending inefficiencies and enhance fiscal accountability, as already a handsome chunk of the budget is being appropriated for defense spending.
About N840.56 billion recurrent expenditures and N121 billion capital projects are allotted to the Ministry of Defense in the executive bill. Adequate measures are crucially needed to entrench judicious financial management of the national defense and security institutions, to guarantee meaningful results in improved peace and security of the country. Also, in agreement with the Speaker of the House of Representatives, the budget must include compensation to victims of armed forces brutality.
The educational sector is currently allocated N545 billion in recurrent expenditure, to be augmented by N70.05 billion meant for the Universal Basic Education Commission (UBEC). A demand for an end to ASUU strike and a significant upgrading of educational and research centers should also be accompanied by a higher budgetary percentage to education, in the neighborhood of the proverbial UNESCO 26% ratio to total public budget.
The budget reforms must also tackle food security concerns, with a demand for an end to underfunding of the agricultural sector. The interim aim is to meet the benchmark of the 2003 Maputo Declaration, which mandates African Union member states to allocate a minimum of 10 percent of their total annual budgets to agriculture. Based on the submitted appropriation bill currently before the National Assembly, the allocation to the Federal Ministry of Agriculture and Rural Development and all subsidiary agencies under it amounts to only 1.5 percent of the total budget.
The N179 billion proposed allocation to agriculture (capital expenditure N110.2 billion, personnel cost N66 billion, overhead N3.1 billion), builds on the current 2020 poor allocation of N79.79 billion (less than 1 percent). Higher budgetary allocation to agriculture is expected to translate to positive economic multiplier effects on food sufficiency, poverty alleviation, aggregate exports, forex conservation, downstream agric value chain, and overall economic growth.
The 2021 federal appropriation proposal allocates N547 billion for healthcare (N380.21 billion recurrent expenditures, N132 billion capital projects, N35.03 billion Basic Health Provision Fund), which is only about 7 percent of the total budget. This is in spite of the enormous impact of the Covid-19 pandemic on Nigeria, and the dire situation of healthcare systems in the country. The healthcare budget allocation should be raised up to match the 15% AU benchmark for health funding, in line with Nigeria’s commitment to the 2001 Abuja Declaration. This demand must further seek comprehensive improvements on health workers’ salaries, national health insurance packages, supply of modern health equipment and PPEs, upgrade of primary and tertiary health facilities, and provision of adequate interventions funds against epidemics of malaria, tuberculosis, meningitis, and HIV/AIDS, as well as maternal and child mortality. Nigeria’s public health programs and interventions must not continue its over-reliance on foreign donor funds.
Lastly, the #EndSARS youth protests must call for fiscal incentives that would bring about massive employment opportunities for the teeming population of Nigerian youth. More proactive measures need to be put in place to cushion the negative impact of Covid-19 on unemployed young people. There must be strategic plans to create economic schemes that will make available affordable credit support interventions for SMEs, sectoral capacity growth for indigenous entrepreneurs and local value chain players, an increase in private and public investment toward employment generation, as well as vigorous Nigerian local content development strategy.
Mr Idris is a state-building and peace-building spec currently with IBY Corporate Solutions, and PeacePanel Center. He’s on Twitter @Mazhun