N8.7trillion 2019 budget without N30,000 minimum wage

As President Muhammadu Buhari presents 2019 budget proposal of N8.7 trillion to the joint session of the National Assembly tomorrow, one of the items to be sought for in the proposal is whether the N30,000 minimum wage agitation by Nigerian workers are captured in it or not . Taiye Odewale puts up a prognosis.

Subsidy palaver
As posited last week that after the controversy on non-singning of the 2018 Electoral (Amendment) Bill by President Muhammadu Buhari, must have fizzled out, the next issue that will generate debate in the polity, is the presentation of the 2019 budget estimates. One of the key talking points would be the issue of subsidy regime being allegedly illegally run by the government since last year after the 2016 perceived removal when pump price of petrol per litre was jerked up from N87 to N145 and most importantly, whether votes to take care of minimum wage increase is included.

It would be recalled that early last month, allegation of illegal withdrawal of $3.5bn from dividends of the Nigeria Liquefied Natural Gas (NLNG) was leveled against the management of the Nigerian National Petroleum Corporation (NNPC) on the floor of the Senate by no less a senator than the Minority Leader, Senator Biodun Olujimi (PDP Ekiti South).

Expectedly the allegation led to the setting up of the Senator Ahmed Lawan-led Ad- hoc committee to probe the allegation. The process led to the disclosure by the Group Managing Director (GMD) of NNPC, Mikanti Baru, that it was only $1.05bn that was taken from the account which is domiciled with the Central Bank of Nigeria (CBN) tagged: “National Petroleum Stabilization Fund ” to help in augmenting the losses being incurred on daily basis between the landing cost of N195 to retail pump price of N145 per litre.

According to him, the $1 .05 bn Petroleum Stabilization Fund obtained from the dividend of the Nigerian Liquefied Natural Gas company prevented petroleum products’ chaos in Nigeria.

“It is important to state that if we didn’t source for that fund, the nation could have been in chaos. They are not looking at that but claim we spent $3 .5 bn when there is nothing like that. You can’t place something on nothing.

“It is for a year. It is for 2018. That is another reason why we are not going to see queues during the Yuletide and beyond because we are augmenting what is imported with our local production. So, Nigeria will not experience fuel shortage this festive period”, he stressed.

No minimum wage?
Aside subsidy, another item that Nigerians would be looking for in the budget is whether any provisions are made in it for wage increase for workers next year which is most likely not to be captured going by outcome of meeting President Buhari held with the 36 states governors last week Friday.

It would be recalled that the chairman of the Governors’ Forum, Governor Abdulaziz Yari of Zamfara State quoted President Buhari to have declared that the economy was in bad shape and that Nigerians should tighten their belts for tougher times ahead. Labour has yet to officially react or responded to the declaration up till now as regards the N30, 000 minimum wage agitation.

The N8.7trillion budget proposals to be made by President Buhari is even N400bn lower than that of this year (N9.12trillion) and just N100bn higher than the original budget estimates of N8.6trillion presented to joint session of the National
Assembly on the 7th of November, 2017 as original budget profile for 2018 before the federal lawmakers injected N578bn into it to cover the 1,403 projects they added to the capital component of the budget.

It will be recalled that the Minister of Budget and National Planning, Senator Udoma Udo Udoma, had last month announced that the federal government was considering a leaner 2019 budget of N8.6 trillion, which is leaner than the N9.1 trillion approved by lawmakers for 2018.

He had explained at a consultative forum on the medium term expenditure framework (MTEF) and fiscal strategy paper (FSP) 2019-2021, that the decision was due to reduced government revenue projection for the year. Udoma also said government plans to cut down the level of borrowing from N1.6 trillion in 2018 to N1.5 trillion in 2019, while the deficit component would be reduced from N1.9 trillion in 2018 to N1.6 trillion.

According to him, in spite of the recent oil output drop to about 1.9 million barrels per day, government was optimistic that the 2.3 million barrels a day target was achievable with production now rising to about 2.15 million barrels a day and new oil productions being put into play.

Although a $50 per barrel oil price benchmark was proposed in the ERGP, the minister had expressed confidence that with a significant rise in the price above $80 per barrel currently, government has proposed a $60 per barrel oil price for the budget.

He further stated that N305 was proposed as exchange rate to the dollar, with government working to keep inflation down after slight increases in the last two months on the heels of 18 months consecutive decline.

The projected target gross domestic product (GDP) growth rate for the budget was put at 3.01 per cent, reduced from 4.5 per cent in the ERGP; 3.6 per cent in 2020 and 3.9 per cent in 2021.

He added that “Growth is expected to increase from 0.8 per cent in 2017 to 2.1 per cent this year and 3.01 per cent in 2019 with the continued implementation of the ERGP in 2019 and improved outlook for oil prices.

Specifically on revenue, the minister explained that based on the oil price and oil production assumptions, government expected to generate about N3.6 trillion from oil, up by about N500 billion from last year’s figure. About N6.9 trillion revenue is projected to be available to the budget in 2019.

With other projections showing government expects to collect less revenue from some independent sources, he said only about N624 billion is expected to be realised against about N847 billion in the 2018 budget, among others.

Budget delay in the offing?
Aside that, the budget presentation coming almost six weeks after that of last year, signals problems ahead as regards its consideration and approval by NASS going by the six months duration spent on the 2018 budget proposals.

It would be recalled that the N9.12trillion 2018 budget estimates were passed by both chambers of the National Assembly on the 16th of May this year and assented to by President Buhari on the 14th of June this year.

If a similar scenario is to take place this year, a debacle may be in the offing, as the tenure of the current 8th National Assembly ends on the 9th of June 2019.

The worries are even compounded by the fact that the possibility of the federal lawmakers fast-tracking the consideration and approval of the about to be presented 2019 budget estimates is slim going by the fact that political activities for their reelection in form of campaigns have started in preparation for the February 16, Presidential and National Assembly elections.

 

Whichever or whatever way the looming debacle over the consideration and approval of the about to be presented N8.7trillion 2019 budget would be handled by both the Presidency and the National Assembly is certainly in the womb of time.

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