Contrived Budget Figures, 2022 Census, 2023 Consensus and other Counted Lies
Nigeria’s 2022 budget was passed after a lot of drama. It was widely reported that President Buhari signed the budget appropriation bill into law reluctantly. This was because the National Assembly members had cut expenditures for some projects and instead pasted their own preferred projects into the original document submitted by the Executive arm.
In the end, the National Assembly shot up the budgeted expenditure by 4.51% from N16.39 trillion to 17.13 trillion, and the President had to sign it under duress.
But the Legislature provided revenue for the extra expenditure in one major way. They increased the budget benchmark price of crude oil. By this action, they moved the expected revenue from crude oil sales closer to reality.
Source: Ministry of Finance, Budget and National Planning
This leads to the question: Who is more technically equipped to benchmark crude oil price for Nigeria’s budget - the Ministry of Finance and the Budget Office or the National Assembly?
Are oil production and price benchmarks and other key figures perfunctorily dropped in the National budget? Are they politically decided or professionally determined?
Contrived Budget Figures: Oil Price and Oil Production Forecasts
As far back as 2007, the Federal Ministry of Finance and the Budget Office raised concerns about the “poor forecasting of total oil revenues” in the budget. This resulted from problems with the calculations of oil prices and oil production, besides the global demand for crude oil and OPEC’s supply quotas.
The issues raised then in the 2008-2010 Medium Term Fiscal Strategy Programme document bordered on “overestimation of production” of crude oil and the difficulties in estimating an “effective benchmark price of oil”, among others.
Unfortunately, these “challenges and issues” still plague the country’s budget and planning procedures today.
Source: Ministry of Finance, Budget and National Planning
As things are presently, it is not clear who has a better forecast of future oil prices between the Executive and the National Assembly. But when the two estimates are compared with other international oil price forecasts, that from the Federal Ministry Of Finance, Budget and National Planning is farther from global market realities.
Source: Ministry of Finance, Budget and National Planning
While one may commend the executive arm for consistently lowering the oil price expectations to stay on the safe side, its high margins of error also make it difficult for realistic planning for government revenue and expenditure on public goods, infrastructure and services.
Between 2010 and 2021, on average, the federal government set the benchmark price for crude oil at $20 less than the actual.
This means for a year like 2020 with Actual selling Price of $41.68 per barrel and actual production of 1.78 million barrel per day, compared to the budget oil price benchmark of $28 per barrel and budget production benchmark of 1.8 mbpd, the Country could make about 23.8 million dollars extra per day or 8.7 billion dollars in 365 days that it did not plan for.
Thus, about 3.5 trillion Naira could be accruable to the Excess Crude Account that year, before other costs discount the excess oil revenue.
Source: Ministry of Finance, Budget and National Planning, MTEF
The executive arm of government is used to crafting a very low figure as the price that crude will sell globally next year. This would afford the government to play around with excess crude oil returns when it eventually sells the oil at a higher price.
But even the non-initiate Nigerian knows how public officials misspend duly-allocated money, talk less of the fate that an unexpected and unplanned money will suffer in their hands.
And many times, a bunch of the excess revenue would have been held back by the NNPC as costs for contrived subsidy payments, among other expenses.
To determine the benchmark oil price and oil production level for the next year, the budget office usually has to rely on the trend in the past years and some other educated guesses.
But it is interesting that oil price projections are usually underestimated while oil production is consistently overestimated.
Source: Ministry of Finance, Budget and National Planning
Yet it is bewildering the estimation methods that the finance ministry and the budget office use to consistently overestimate the country’s oil production for 9 years straight (2012-2020).
Source: Ministry of Finance, Budget and National Planning, MTEF
Source: Ministry of Finance, Budget and National Planning
Hopefully, the 1.88 mbpd production estimate for 2022, may turn out to be a moderate estimate, going by the trend analysis of the actual output in the preceding years 2011-2021.
2022 Census Budget: 60 years of Counted Lies in the Making
Another interesting item on the 2022 Budget that caused a tug of war between the Executive and the Legislative arm of government is the allocation for a demographic and household census during the year.
The Census is coming 16 years after the controversial 2006 census and 60 years after the conflicted 1962 census.
Due to the forthcoming 2022 Census, which is to be conducted by the National Population Commission (NPC), the Commission was given a budgetary allocation of 189.51 billion, which is the 14th highest allocation among 44 like Federal Ministries, Departments and Parastatals (MDAs) in the 2022 MDAs budget.
Of the N189.51 billion was allocated to the commission, 8.88 billion covers recurrent expenditures, while N180.63 billion covers the Commission's Capital expenditure for the year.
Earlier, while making a case for the Commission's budget of N400 billion for the Census exercise before the Senate, the Chairman of the NPC, Alhaji Nasir Isa Kwarra said, “our initial proposal was N217 billion which was presented about four years ago. However, due to inflation, naira devaluation and labour cost, we have to jerk it up. Our job is labour intensive and because we would employ over 1.5 million, we have to increase our budget to about N400bn.
However, the National Assembly was reported to have cut the Census Bill to just over N190 billion, which was even lower than the N217 billion estimate that the NPC made 4 years ago.
In fact, only N177.33 billion was allocated exclusively for the Census exercise out of the N180.63 billion Capital Budget of the Commission.
With these seeming financial constraints on the 2022 census and other security inhibitions, as one of the Senators foresaw, the census funding and timing is already showing signs of becoming another census of counted lies.
Senator Smart Adeyemi, while responding to the presentation of the NPC Chairman, said: “Census may be necessary, but it is not expedient. With the increasing rate of insecurity in the country, it will be difficult to conduct accurate census or get the right figures. He submitted that, “The alternative is to leave some people to sit down somewhere and be writing figures.”
He noted further that, ““All other zones in Nigeria today are unsafe. There are killings every day, especially in the northern region. How do we capture many Nigerians who have no access to their towns and villages?”
Truly, the history of population and demographic census in Nigeria is replete with scenes of discounted truths and counted lies. The proposed census in 2022 marks the 60th anniversary of the inaugural 1962 Census which birthed all the population and election figure feuds in the country, and 16 years after the 2006 Census, which was a classic case of a figure fraud.
An excerpt from “Let figures lead and Ideas follow” by Joshua Olufemi, in “Remaking Nigeria: Sixty Years, Sixty Voices”, edited by Chido Onumah, reads:
“Feyi Fawehinmi discovered a strange match between the 1991 census figures and the last supposed count in 2006: “Since the new states had been carved out of existing states, making the numbers directly comparable meant adding the 2006 numbers for the 6 new states back into the states they had been carved out of.” He then wondered how “each Nigerian state managed to maintain its exact share of the population across two censuses, 15 years apart.”
With a heavily discounted budgetary allocation for the 2022 Census and the ambient insecurity all over the country, this could really “leave some people to sit down somewhere and be writing figures”, especially as was the case in the last Census in 2006
2023 Electoral Consensus: Reminiscent of the 2007 Election
The 2022 budget was not all the President had to assent to without his full consent. President Muhammadu Buhari also reluctantly signed the Electoral Bill into law, under the duress of protesters’ drums.
The President earlier withdrew assent to the bill as passed by the National Assembly until the NASS reviewed the bill to accommodate the President’s interests. One of the President’s recovered interests is the provision for a consensus candidate for parties in the new Electoral Law.
Source: africanelections.tripod.com
The last time a ruling party had a consensus candidate apart from an incumbent was before the PDP party primaries meant to transfer power from President Olusegun AObasanjo to Governor Musa Yar’Adua in 2007.
“Yar’Adua’s victory had been widely expected after the governors of the PDP-controlled states on Friday chose him as their “consensus candidate” and urged all party delegates to vote for him on the grounds that he “presented the best credentials” and was “generally acceptable across the country”, AlJazeera reported then.
That 2007 presidential election result was the most controversial since the return to democratic governance in 1999.
Till date, there is no record of how Yar'adua won the election across the 36 states and 774 local governments, unlike for elections before and after that.
“The presidential election held on April 21 that year is the first and only in Nigeria’s history in which there is no state-by-state breakdown of the candidates’ scores.
Maurice Iwu, a professor and INEC chairman at the time, declared Umaru Musa Yar'Adua of the Peoples Democratic Party (PDP) with a figure of 24,638,063 votes without giving the details.
It remains the highest vote ever amassed by an individual in a single election in Nigeria”, according to the Cable
The forthcoming 2023 election presents a scenario like that of 2007, where the incumbent President of the ruling party desires to have an option to hand over power to his party candidate through a consensus candidate in the primaries.
Nigerians hope the current INEC management can give something better than the contrived election figures that Maurice Iwu submitted to President Obasanjo then.
A Census Budget and its Counted Lies?
Yet, one more intriguing figure in the 2022 budget is a 50 million allocated to the National Population Commission for the "construction and installation of integrated solar street light in various communities of Bali/Gassol Federal Constituency, Taraba.”
Dataphyte is currently investigating, among other issues in the 2022 budget, how the provision of solar lighting across a select federal constituency became the responsibility of the National Population Commission.
Dataphyte’s accountability desk seeks to know further what interest the NPC management has in that federal constituency, and how this possible conflict of interest could alter NPC’s census count of the people and building facilities in Bali Gassol Federal Constituency of Taraba State.
Besides this strange 50 million worth project found as a line item in the National Population Commission's budget, the Senate also chided the Commission for possible inflation of its Census budget for things as little as sanitizers.
“Other members of the Red Chamber also picked holes in the budget after they discovered that the NPC may spend N2 billion on sanitizers and face masks within 13 days for the conduct of the exercise”, the Nation newspaper reported.
These "holes in the budget" seriously questions the readiness of these NPC leadership to give us something better than the discounted truths and counted lies of the past Censuses.