The Ministry of Budget and National Planning has reportedly compiled a budget setting government’s spending at ₦8.9 trillion for 2019 which is set to be a tense election year, according to BusinessDay newspaper. The Special Adviser Media to the Minister of Budget and National Planning, James Akpandem, confirmed that the Ministry had indeed started the process of preparing the 2019 budget although he declined further information on the ongoing process. Details obtained from the Fiscal Strategy Paper of the Federal Government showed that the government intends to spend ₦8.9 trillion for the 2019 fiscal year. The new budget is a reduction of ₦220 billion from the 2018’s ₦9.12 trillion which took a long 171 days before being signed into law, and is yet to be implemented as capital expenditure has not been disbursed.

Nigeria has suspended its plan to relaunch its national airline, a junior aviation minister said on Wednesday. The government had planned to launch the prestige project in December to make good on a promise by Muhammadu Buhari when he ran for president in 2015. He will seek re-election in February. “I regret to announce that the Federal Executive Council has taken the tough decision to suspend the national carrier project in the interim,” Hadi Sirika, junior aviation minister, said on Twitter after the weekly cabinet meeting. “All commitments due will be honoured,” he said. No reason was given for the decision. In a separate statement, he said: “The suspension was strategic and had nothing to do with politics.”

The Economic and Financial Crimes Commission has lambasted HSBC Bank days after the lender predicted that Nigeria’s current economic struggles look set to continue if President Muhammadu Buhari wins a second term in office. The EFCC said in a post on its official Instagram page, @officialefcc, that the multinational banking group, which is Europe’s largest by total asset, was synonymous with money laundering. In the post titled, ‘The Story of HSBC’, the anti-graft agency said over $100m was laundered by the bank on behalf of Abacha. “Since inception, HSBC is synonymous with money laundering and has paid billions of US dollars in fines across the world,” the agency said. The commission said it would do everything possible to ensure that some of the funds stashed in the bank by the late dictator, General Sani Abacha, were repatriated. This comes less than 24 hours after the Presidency also lambasted HSBC, accusing it of benefitting from the corruption that plagued the country.

Over 100 people have died in floods in several Nigerian states following heavy rains that caused the rivers Niger and Benue to overflow, the National Emergency Management Agency announced Monday. The emergency body, NEMA, declared national disaster in Kogi, Niger, Anambra and Delta states. Eight other states, Taraba, Adamawa, Kebbi, Edo, Rivers, Benue, Bayelsa and Kwara are being monitored by the disaster relief agency. ”More than 100 people have died in floods,” Sani Datti, the agency’s spokesperson was quoted by Premium Times on Monday. ”The four states are in very bad condition; the remaining states are being monitored, but if the conditions of the remaining eight states (deteriorate) they would also be declared a national disaster,” Mr Datti said.

Suggestions

  • Nigeria’s budgeting process has never been further divorced from reality as it is today, and questions have been raised by analysts on the chances of the new budget sailing through smoothly into implementation. When you take into consideration the hiccups encountered by the 2018 budget and even previous ones, the picture is gloomy. Implementation information has been sparse, but if 2016 was indicative, then the 2017 implementation was abysmal as well and we can extrapolate that 2018 will go the same way. Debt service to revenue ratio might also rise in 2019 to 36.53 per cent from 30.76 per cent, while debt servicing as a percentage of total federal government revenue could increase from 27.22 per cent to 40.95 per cent. An estimated ₦2.31 trillion is expected to be utilised for debt servicing in 2019 which is higher than ₦1.95 trillion proposed for servicing debt in 2018, while recurrent expenditure is estimated at ₦3.16 trillion. The brakes need to be urgently applied, and a drastic budget readjustment along with the cuts in expenditure that will balance things needs to be done quickly. However, this is unlikely in an election year.
  • The plan to establish the new airline was met with a lot of scepticism (including from us) but after July’s “launch” in the UK, most Nigerians had resigned themselves to the fact that it was a done deal, especially considering the number of high level discussions the minister had with aircraft manufacturers, potential partners and investors. Shortly after, for example, the chief executive of Ethiopian Airlines said that they were the front-runner to set up and manage Nigeria’s new carrier. The news of suspension is therefore a surprise and the government should realise that it owes Nigeria’s an explanation for the cancellation considering that this development, after all the publicity, will only serve to further tarnished Nigeria’s image as a reliable partner.
  • The EFCC’s recent response to the HSBC, which echoed an earlier riposte from the Presidency, reflects the agency’s political exposure and instrumentalisation under the Buhari administration. Both the Presidency and the EFCC have responded to a finding by HSBC to the effect that President Muhammadu Buhari will lose next year’s election with strident ad hominem attacks. The report by the HSBC is one of several such reports that are customarily commissioned by international organisations during election cycles and did not merit such vitriolic responses by the government. For the EFCC, in particular, its response was especially uncalled for given its status as a law enforcement agency. But the agency under Mr Ibrahim Magu’s leadership has evidently dispensed with any pretexts of impartiality and the similarity in tone and substance of its statement to that given by the President’s spokesman, Garba Shehu, suggests that it now sees propaganda as part of its remit. Mr Magu has been known to show up at public events and TV programmes wearing a pro-Buhari lapel pin. There is cause for concern with regard to the EFCC’s continued capacity or willingness to maintain a semblance of non-partisan neutrality as Nigeria moves further into the election campaign season. The two statements which excoriate HSBC for being a recipient of funds stolen by the maximum ruler Sani Abacha carry considerable irony given that President Buhari is on record as having denied that Abacha stole public funds and has also expressed admiration for the dictator.
  • Nigeria has an uncomfortable history with managing floods and other natural disasters. In 2012, the worst year for flooding in four decades, floods which lasted from July till November killed 363 people, displaced over 2.1 million while affecting seven million more across 30 of Nigeria’s 36 states, with NEMA putting economic losses at ₦2.6 trillion. The worst hit states at the time – Adamawa, Taraba, Plateau and Benue – are all on NEMA’s radar this time, save for Plateau. A lot of the affected communities are located in the flood plains of both major rivers and their tributaries – a situation exacerbated by outdated agricultural and irrigation practices that encourage rural producers to situate their farms and homes close to these rivers. While NEMA and the Nigerian Meteorological Agency are to be commended for consistent warnings and forecasts and the FG has directed that new resettlement camps be built for the victims, a lasting solution has to lie in a significant reordering of how much of rural Nigerians live and work, including encouraging residents to adhere to planning restrictions – a problem government planners encounter across the country. The floods are also sure to have an economic impact away from the affected areas in the form of increased prices for such staples such as rice, tomatoes and potatoes – adding yet another unwanted inflationary pressure point on an already weary economy.