Democratic Socialist Movement

For Struggle, Solidarity and Socialism in Nigeria

By - DSM

2016 BUDGET


2016 BUDGET

2016 BUDGET: WORKING PEOPLE MUST PREPARE TO DEFEND THEIR LIVING CONDITIONS

We of the Socialist Party of Nigeria (SPN) call on the mass of the working people to prepare to resist any attempt to make them pay for the current crisis of capitalism. We make this call based on the admissions of the President Muhammadu Buhari himself that the Nigerian economy is experiencing harsh times on the basis of global economic crisis. This is reinforced by the sharp fall in crude oil prices which made the 2016 budget to be set at a benchmark price of $38 per barrel. Indeed, there is now a possibility that crude oil price would be lower than the budget benchmark.

While the expenditure proposal for the 2016 budget is N6.08 trillion, the revenue projection is N3.86 trillion which will result in a deficit of N2.22 trillion. This deficit, which is equivalent to 2.16% of Nigeria’s GDP, will take the country’s overall debt profile to 14% of the GDP. It is the position of government that this year’s budget deficit will be financed by a combination of domestic borrowing of N984 billion and foreign borrowing of N900 billion totaling N1.84 trillion.

Raising false hopes

Though we understand that some hopes may have been raised by the budget’s promises we hold that the effect of the Buhari government is to offload the burden of the economic crisis onto the backs of future generations of workers and the poor. While completely rejecting the PDP’s hypocritical criticisms the SPN believes that pundits who praise the high capital expenditure in the budget are in error.

No doubt this budget may stimulate some activities for instance in the construction sector this year as stalled road and building projects commence. But at the same time however, the debt overhang that this budget implies would mean that in future a bigger chunk of State resources that should go into financing development and vital social services would now be devoted to debt servicing. So at the end of the day while this budget tries to stimulate a slowing economy, it nevertheless contains the seed of new crises that could prolong the economic slowdown or prevent a recovery. What this paradox again underscores is that, without system change, there can be no fundamental solution for the economic crises can be found within capitalism. Only the revolutionary transformation of society along socialist lines which would entail the public ownership of the commanding heights of the economy under working people’s democratic control and management can begin to rid society of periodic economic crises which is the hallmark of capitalism.

Similarly, despite huge decline in oil revenue and expected low federal allocation, 12 states, cutting across both APC and PDP, have also emulated the federal government by increasing their expenditure in some cases by over 100 percent. Given their low internally generated revenue base, these states, with exception of Lagos, will have difficulty in raising the funds, including borrowing, to finance their budgets. Even if they are able to raise the loans, it will be extreme difficult to repay the debt. Already last year some of the states have had to rely on a bailout package which includes debt rescheduling before they could start paying workers’ salaries after many months of arrears. In other words, these budgets will increase the debt burden already passed on to future generation by the state governments.

Looming attacks on living standards

The combination of the current crisis and the overall neo-liberal agenda of the government means that the current generation of working people cannot escape capitalist attacks as seen with the recent increase in electricity tariff, planned introduction of toll gates on highways, possible hike in fuel prices and wage-freeze.

We call on working people to reject this debt enslavement and all capitalist attacks.

We also view the proposed 9% reduction by Buhari government in non-debt recurrent expenditure from N2.59 trillion in the 2015 budget to N2.35 trillion in 2016 as mincemeat to the radical measures the current socio-economic crisis requires. We call for cut of jumbo pay of political office holders at all levels of government including members of National Assembly and military/security top brass as well as the nationalization of the commanding heights of economy (oil sector, big banks, etc) under workers’ democratic control and management in order to meet the challenges of the economic crisis and begin to build a society that prioritizes the needs of the mass majority over the profit of a few.

Working people demand genuine improvements

While we welcome the initiative of government to recruit, train and deploy 500,000 unemployed university and colleges of education graduates whom it promises to deploy as teachers to primary schools, we demand that this should not be made a causal labour scheme but a permanent employment with good conditions of service, decent pay and trade union rights. We note that up till now, there is no clear statement as to what will be the conditions of service of these “graduate teachers”. It is not out of place to conclude that the beneficiaries will be government-employed “casual workers” such as what obtains in some of the APC-controlled states like Osun and Oyo with Osun Youth Employment Scheme (O-YES) and Youth Employment Scheme of Oyo State (YES-O).

The projected spending on infrastructure in the 2016 budget is relatively high when compared with appropriations of previous years, though low to meet the challenges of the sectors. However, recurring decimal in the past years has always been that the budget is not fully implemented and where the funds are disbursed they get stuck in the hands of few individuals in government or private contractors. This year budget can suffer the same fate. This is why the SPN calls for democratic control of allocated funds and projects by elected representatives of workers and relevant professionals to guarantee proper spending of the budgetary allocation.

We hold that the decision to scrap fuel subsidy as deducible from the budget (there is no clear provision for subsidy payments) is the clearest reflection of the looming neo-liberal attack on the mass of working people. The argument of government to introduce “price modulation” which has seen the reduction in pump price by 50k at present means that there will be price hike in the future when the price of crude increases.

For a living wage

We are also opposed to the wage-freeze as contained in the medium term expenditure framework. It means that there will not be increase in national minimum wage despite the fact that devaluation and inflation have rendered the current wage untenable. We call on labour to reject the wage-freeze and resist the resolve of the state governors to use the fall of crude oil price to cut wage or lay off workers.

We call on the labour leadership to refuse to be blackmailed by the backward calls of state governors to reduce even lower the current meager N18, 000 minimum wage but also, without delay, begin a serious campaign to stoutly demand a rise in the minimum wage.

Fight for a socialist alternative to capitalism

What is glaring is that with the global economic crisis clawing at the Nigerian economy, it is clearly now a warfare for the control of depleting resources. Working people must refuse to pay for the mess created by capitalism and its proponents.

We call on all the genuine forces of struggle inthe workers’ movement, students and youth movement and community movement to be prepared to build a mass movement that will place sharp demands on the government for a living wage, decent jobs, quality education, good health care, adequate infrastructure, etc. Such movement must be anchored on a genuine drive to build a genuine pan-Nigerian working class mass political movement armed with a socialist programme to champion the enthronement of a working people’s government that will use the resources of the society for benefit of all and defeat iniquitous, profit-first capitalist system. This is what SPN ultimately stands for.

Segun Sango
National Chairperson
Email: [email protected]