Democratic Socialist Movement

For Struggle, Solidarity and Socialism in Nigeria

By - DSM

Buhari’s 2022 Budget: Not a Way-out from the Worsening Economic Crisis

Working People must prepare for Resistance against more Capitalist Attacks

President Muhammadu Buhari on October 7 2021 presented the proposed budget for the year 2022 to the National Assembly. The N16.4 trillion plan is tagged the Budget of Economic Growth and Sustainability. No doubt, there will be growth even though anaemic and sluggish. However, what will be sustained, if they don’t get worse, are the current socio-economic crises of the high cost of living, mass poverty and youth unemployment. Indeed, working people should be prepared to resist more capitalist attacks that may be unleashed by the government at all levels.

By Peluola Adewale

While the Buhari government has projected 4.2 percent as the annual growth for the country in 2022, the IMF is much less optimistic with a projection of 2.7 percent.  At any rate, whatever projection is correct it would not translate into a better quality of life for the vast majority. For instance, while the economy grew by 5 percent in the second quarter of 2021 the prices of food increased by almost one hundred percent. Also, in the past, before mid-2014, despite the economy growing at the rate of 5 to 7 percent, “the share of people living below the national poverty line increased from 69 million in 2004 to 112 million in 2010”, according to a report by Oxfam, the British charity organization, using the data by Nigerian Bureau of Statistics. So, the problem is much about the economic inequality which heightens both in the period of growth and slowdown, something which is a feature of the iniquitous capitalist system.

There are indications that the current economic crisis may get worse in the year 2022 as the prices of crude oil which are over $80 in October, higher than the proposed 2022 budget $57 benchmark, are projected to get even higher. JP Morgan for instance has projected the crude oil prices to reach $100 in 2021.  It is a paradox that higher crude oil prices may compound the economic problem in a major oil-producing country but it is the reality of Nigeria – a neo-colonial economy with a primitive capitalist ruling elite.


After independence, there were attempts to use state resources and actions to industrialise and build a modern economy. But these ultimately failed because Nigeria remained dominated by the capitalist world economy and, faced with a crisis, there was a turn to neoliberalism and market fundamentalism from the mid-1980s onwards, a turn which put a stop to efforts to develop domestic production.

Thus, the adherence to market fundamentalism now means that the country, for instance, does not have functional refineries despite being one of the world biggest oil-exporting nations. So, it imports petrol, cooking gas, diesel and other petroleum products. Therefore, the masses pay high prices for these commodities at home largely because of the high prices of crude oil globally.  For instance, as of October 2021 the prices of cooking gas and diesel, which do not enjoy subsidy, had increased by almost 100 percent and 70 percent respectively in the last one year.

Ironically, the masses also pay high prices for fuels when crude oil prices are low. This is because at low crude oil prices there are declined oil revenue and a depressed forex exchange reserve which prompt devaluation or depreciation of the currency and hence the rising prices of goods and services including petroleum products locally despite lowering prices globally. Worse still, today for Nigeria and the masses face double jeopardy. The prices of crude oil are increasing globally but this has not translated into an increasing revenue largely because of the country’s quota of the production cut by the OPEC and allies including Russia (OPEC +) which in the first place largely accounted for the current high oil prices. This explains the current relatively low oil revenue despite high oil prices. So, the masses are currently paying for both the rising prices of crude oil globally and the devaluation of naira locally as a result of the low oil revenue. However, even if OPEC+ increases the quota for Nigeria as expected there is no guarantee that the country can produce 1.8m barrels per day projected in the 2022 budget. The political situation in the run-up to 2023 general elections may get worse such that oil installations bombing or destruction cannot be ruled out.

Nonetheless, high crude oil prices which are projected for 2022 also mean that the government may be under pressure to remove petrol subsidy. President Buhari in his budget presentation speech indirectly gave a hint in this direction. He blamed the “significant cost recovery by NNPC to cover the shortfall between its cost of importing petrol and the pump price” in addition to the shortfall in oil production for the current “poor performance of oil revenue relative to the budget”. He then added, “this petrol subsidy significantly eroded revenues that should have been available to fund the budget.”

Already, the Group Managing Director (GMD) of Nigerian National Petroleum Corporation (NNPC), Mele Kyari, who claimed earlier in March that the corporation could no longer bear the over N120bn monthly petrol subsidy, has hinted that while the negotiations with labour unions are ongoing the President has given the corporation the mandate to work out appropriate pricing (Proshare September 24, 2021).

However, it is not only the President that wants the petrol subsidy removed, the state governors also do. At present, there is no provision for petrol subsidy in the federal budget. So, what the NNPC does is to deduct the payment for oil subsidy which it calls “under recovery” from its statutory remittance to the federation accounts which belong to all the tiers of government. If there is a consensus between the APC led federal government and governors including those of the PDP over the subsidy, the Buhari government may not be afraid of the political backlash of increasing petrol prices less than a year to the presidential and general elections, given the absence of a mass working people alternative. In any case, Petroleum Industry Act supported by both parties and recently signed by Buhari already makes subsidy illegal


Workers, trade unionists and pro-masses’ organisations must mount pressure on the leadership of Labour not to enter into a rotten deal with the government in the said ongoing negotiation as they did in September 2020 when they cancelled a general strike meant to protest against the increase in petrol price. The poor masses must not be made to continuously pay for the failure of the successive capitalist governments to build functional oil refineries.

Rather, there must be a demand on the government to build public refineries which are democratically controlled, and not put the masses at the mercy of Dangote’s refinery which will sell its products at international prices whenever it comes on stream, now, after the umpteenth shift, puts at 2023. Also driven by the pursuit for super profit and foreign exchange earnings, Dangote may even decide to prioritize export markets at the expense of the domestic needs as it currently obtains in respect of cooking gas and liquified natural gas. Nigeria Natural Liquefied Gas (NNLG) company in which the government owns 49 percent share, but is run wholly as a private profit-orientated company, has the capacity to meet the domestic demand for cooking gas, for instance, but chooses because of super profit and the forex to repatriate the profit of oil multinationals to prioritize export. This partly accounts for the current high price of cooking gas in Nigeria as the country imports about 60 percent of the domestic need, with devaluation, freight and shipping costs, and customs duties contributing to the spike in the prices.

The current high prices of liquified natural gas internationally, for instance, the European gas futures have already moved beyond a crude oil equivalent of $200 per barrel ( October 8, 2021), also means that the government and electricity companies may plan to further increase electricity prices given that gas-powered power plants contribute the most to the electricity generation in Nigeria. Domestic gas is benchmarked to international prices. Already, the electricity companies have secretly and fraudulently imposed higher tariffs on consumers while the labour leadership has turned a blind eye despite the so-called ongoing negotiation with the government.

Therefore, there must also be a demand on the labour leadership to call a 48-hour general strike and protest as the first step to demonstrate the resolve of the working people to resist the hikes in petrol prices and electricity tariffs as well as an objection against the current high prices of food items. The strike must also be used to resist naira devaluation and other anti-poor capitalist measures that are making workers and the poor masses pay for the crisis of capitalism and the failure of Buhari and past governments. (For more on our call for a general strike see: TIME FOR A 48-HOUR GENERAL STRIKE AND MASS PROTEST)

Already, despite the devastating effects of the recent devaluation of Naira from N360 to 410, at the official market, on the cost and standards of living, Vice President Yemi Osinbajo still strongly believes, “the exchange rate is artificially low” (The Cable, October 11). Therefore, despite the fact that N410 to a dollar which is the current exchange rate is also the projection for 2022 budget, another devaluation is not ruled out.  Even if there is no further devaluation, given the expected high oil prices and better domestic oil production as OPEC+ ease production curbs, the fact that Osinbajo calls for it in the first place underscores the anti-poor character of the Buhari government.


Moreover, while the masses have benefited precious little from the successive budgets, with the proposed 2022 budget Buhari has continued with a fiscal plan that makes the future generation share the burden of the current capitalist crisis. In addition to the existing debt burden, the government plans to borrow N5.2tn in the 2022 fiscal year. Already, since 2015 it has increased the domestic debt by about 100 percent from N8.8th to N17.6tn as of June 2021 while the external debt rose by a whopping 213 percent to about $33.5bn as of June from $10.7bn in 2015. The fiscal plan also means that, like its predecessors, the current government prioritises the profit-first interest of the so-called investors and creditors, locally and internationally, as a huge proportion of the revenue is spent on debt services which are also often more than the total capital expenditures in the actual terms.

For instance, between January and July 2021 out of the total revenue of N3.9tn a sum of N2.89tn was spent on the debt service, representing about 74 per cent of the revenue. However, over the same period, N1.75tn, less than the debt service cost by 65 percent, was spent on the capital expenditures. In the 2022 Budget, N3.61tn, which is 35.6 per cent of the projected revenue, is earmarked for debt service while N5.35tn is meant for capital expenditure. The allocation to debt service is also much higher than the combined budget for education (N1.29tn) and health care (N820bn) However, from the experience with the previous budgets, while the government may not fully implement the capital expenditure as well as education and health funding plans, the debt service will be fully paid.


Worse still, on the basis of the capitalist contract system, the masses do not get value commensurate to the money spent on the so-called capital expenditures as a considerable portion is partly looted by public officers and another part forms the outrageous profit margin of the private companies. That is why Socialists do not just call for adequate allocation to capital projects but always add that such an allocation must be subjected to democratic control by the working people. We also call for the works departments to be well equipped and workers well trained to the extent of being able to execute all categories of capital projects. This would mean that much less will be spent to achieve the same quantum of jobs as the profit-first private companies. However, this measure cannot be carried out by a capitalist government.

Indeed, within the confines of capitalist philosophy and policies, in the face of the global capitalist crisis which led to the decline in oil prices as from 2014 and which was compounded by the pandemic-triggered lockdown, the only option Buhari government has is to choose between borrowing to finance fiscal deficit and outright austerity measures which include cuts in public spending. However, regardless of the option adopted, any capitalist government hardly cut down or sacrifice the opulent lifestyle and luxury of its top functionaries. This explains why despite a huge deficit of over N6 trillion which will be financed by the acquisition of more debt Buhari government still wants to spend over N150 billion on the presidency alone in addition to other allocations on frivolous travels and wastages

Capitalism has failed to develop Nigeria and, as seen in the US and Europe, cannot guarantee living standards for the majority. Socialists argue that the alternative to both borrowing and austerity plan entails the nationalization and democratic control of the commanding heights of the economy including oil and gas, banking, etc. in order to take away the enormous public wealth currently in hands of a few corrupt elites and plan their use to provide basic and social needs for the vast majority, and also avert economic sabotage.

At the same time, immediate action against corruption, placing all the public officers on the average salaries of workers, eliminating wastages in the overhead needs, and replacing the contract system with public works as articulated above is necessary. All this would have helped mitigate the effects of the current global crisis of capitalism. But such economic measures can only be implemented by a socialist government supported by mass mobilisation.

So, workers and youth must in addition to struggles against all anti-poor policies of the Buhari government agitate for the labour movement to form a mass working people party on a socialist program to fight for basic needs and struggle for political power in order to run the society in the interest of the vast majority and on the basis of socialist planning that will begin to end the cycle of crises which are characteristic of the capitalist system.