Democratic Socialist Movement

For Struggle, Solidarity and Socialism in Nigeria

By - DSM

2013 BUDGET: President Jonathan and National Assembly Remain United against the Poor

2013 BUDGET: President Jonathan and National Assembly Remain United against the Poor

By Peluola Adewale

Going through Nigeria budget every year gives one a strong feeling of déjŕ vu. Apart from difference in figures the budgets since the return of civil rule are in all fundamentals the same. They are essentially anti-poor. But there is a little twist this year. The budget is characterized by warfare between the executive and legislature over who are adept better at deceiving the masses.

Several weeks after the National Assembly had passed the 2013 budget the President Goodluck Jonathan did not assent to it. With fanfare the legislators announced the passage of the budget on December 20, 2012 ahead of the fiscal year supposed to begin on January 1. This they considered a feat, being the first time the budget has been passed before the New Year Day since the advent of the civil rule in 1999.

It is reported that the President refused to sign the budget because of the increase in the crude oil benchmark to $79 by the National Assembly from $75 the executive had presented. Both parties have argued their position as if driven by the interest of the ordinary people. Workers and poor masses must not pitch tent with either section of the thieving ruling elite. This disagreement is essentially storm in a tea cup. For ordinary people whether the budget is based on $75 or $79, as it obtained in the previous budgets, they cannot fundamentally benefit anything.

Leading the line for the executive, Minister of Finance, Ngozi Okonjo-Iweala argued that the $75 was scientifically arrived at, through what she called an econometric module, as the most appropriate benchmark that would enable saving for rainy day in the face of volatility of oil price. She also erected a scarecrow on the benchmark. Anything above that, according to her, would trigger high inflation, high interest rate, devaluation of naira, etc.

The saving which Okonjo-Iweala is referring to is the excess crude account which is the difference between actual oil price and the budget benchmark. The proceeds in this account, which is illegal, are usually shared between the president and state governors without appropriation by the either national or state assemblies.

For instance just recently President Jonathan approved the sharing of $1bn among the 36 states and FCT from the Excess Crude Account currently put at $9.24bn. According to Minister of State for Finance Yerima Ngama this extra-budgetary allocation is to enable state governors “execute more people-oriented projects in line with the government’s transformation agenda and the need to deliver more democracy dividends” (Punch, January 30, 2013).

“People oriented projects”? The poor working masses cannot be deceived by this. Over the years, the governments, at all levels, have not shown anything in term of developmental projects from the previous sharing of excess crude account proceeds . Earlier, a very huge sum of $1bn had been removed from the account for the so-called fuel subsidy which has proved to be a monumental fraud.

Excess crude account is a treasure trove for the looters capitalist ruling elite in the government. Recently, Oby Ezekwesili, a former Vice President of the World Bank accused Yar’Adua-Jonathan administration of squandering $22 billion in the Excess Crude Account (ECA) left by the Obasanjo government he served as a minister (This Day, January 25, 2013).

While this revelation is shocking, it is a half-truth. There is a veiled attempt to present Obasanjo administration as saintly and incorruptible. That administration witnessed the longest run of windfall in Nigeria’s history yet it had nothing to show for it in term of infrastructure development and living condition of the working people. Behind the anti-corruption façade is egregiously corrupt government.

For instance, the $16bn Obasanjo reportedly spent on power project only went to the bank accounts of the anointed thieves, both in government and private sector, as there was no light to show for it. Besides, several billion of naira was also spent on the turnaround maintenance of refineries yet Obasanjo government left them in much worse condition than it met them. This partly accounts for importation of fuel which has been become a veritable avenue for corrupt enrichment for top government functionaries and their fronts in private sector as the fuel subsidy scandal has revealed.

In raising the benchmark, the national assembly has argued that it was done in order to reduce the budget deficit and domestic borrowing. Truly, as against the original proposal of the president; deficit was cut from N1.03tn to N887bn, while the domestic borrowing was reduced to N534bn from N727bn.

But there is nothing altruistic and pro-poor masses in what the legislators have done. Both parties are fundamentally in agreement to continue to borrow despite the fact there is no need for it except to gratify the profit interest of private vampires. For instance, while it reduced the domestic borrowing the national assembly included $1bn Eurobond issue (external borrowing) in the budget. This means the total debt stock which was N7.554tn ($48.4bn) as of December 31, 2012 will remain outrageously high.

In 2005, after Nigeria gifted the Paris Club $12.6bn under the guise of debt relief, the debt stock was $12bn. Now the debt stock is over $48.4bn despite several billions of naira paid every year as debt service without anything to show for this debt burden in term of living conditions and infrastructural development.

For this year budget, N597.7bn was approved as debt service. This is much more than the total capital allocation to works (N168.2bn), water resources (N84.2bn), Power (N73.1bn), Education (N71.9bn), Health (N60bn), Agriculture and Rural Development (N50.8) and Transport (N44.5bn). These are the areas where the impacts of the government are supposed to be felt by the ordinary people.

It should be stressed however that on the basis of the anti-poor corruption capitalist arrangement there is no guarantee that the poor masses will benefit from huge allocation on capital projects or social service. Capitalist politicians see money voted for projects as another avenue for looting. Therefore, it is not enough to call for allocation of huge public resources to capital projects. It has to be matched with a demand for open democratic control of such allocations and projects with elected committees of the working people, communities and relevant professionals.

In essence, both the proposed budget by President Jonathan and the version passed by the National Assembly are anti-poor and pro-rich with neo-liberal capitalist philosophy as the common central thrust. To make budget pro-masses, there must be a clean break from neo-liberal economic policies. But this does not mean workers, youths and poor should throw up hands without a fight. Struggle can win concessions like the granting of national minimum wage in 2011. But as also the refusal of most state governors to pay the minimum wage has shown without a consistent fight the concession will be short-lived.

The January 2012 struggle, the largest general strike and mass protest in the history of Nigeria, has shown the working people have the capacity to fight against the anti-poor policies of the ruling elite if provided with fighting leadership. Labour and pro-masses’ organizations must constantly mobilize workers, youths and poor masses against privatization, deregulation and other anti-poor policies and for adequate public spending on education, health care, road, power, etc. with open democratic control of the working people.

But on the basis of capitalism, especially the neo-liberal variant, the government will resist meeting such demands despite huge resources at its disposal, and even if the working people win some of the demands the government and bosses will seek ways to snatch these gains back. This is one of the reasons workers and poor masses have to join the struggle for formation of a mass-based working peoples’ party that could wrest power from the thieving ruling elite, irrespective of tribes, religion or political parties, and commit the huge resources of the country to provision of basic necessities like electricity, water, housing, road, education, decent jobs, health care, etc. for workers and poor masses as well as infra structural development.

However, for such party to be able to mobilise resources to actualise this programme on a lasting basis, it has to take into public ownership the commanding heights of the economy and resources of nature under democratic control and management of the working people themselves. While continuing to campaign and work towards formation of such mass working people party, we of DSM has come up with the initiative of Socialist Party of Nigeria (SPN) to contest elections and intervene in daily struggle of the working people in workplaces, communities and workplaces as well as against anti-poor policies of the government at all levels.