BUHARI’S 2021 BUDGET OFFERS NO HOPE OF ECONOMIC RECOVERY: ORGANISE AND FIGHTBACK!
By Ayo Ademiluyi
Nigeria’s President, Muhammadu Buhari, on 31st December, 2020 signed into law a budget of N13.58 trillion for the 2021 fiscal year, without any query whatsoever on the additional N505 billion, which the National Assembly had added to its own allocation. The budget which has been tagged ‘BUDGET OF ECONOMIC RECOVERY AND RESILIENCE’, is in reality a budget aimed at ‘CONSOLIDATING POVERTY AND UNDERDEVELOPMENT OF THE ECONOMY AND COUNTRY’. Not with a deficit of N5.2 trillion, and N3.3 trillion for debt services, leaving recurrent expenditure at N5.6 trillion with capital expenditure at N4.1 trillion, and lastly about N496.5 billion for statutory transfers.
If anything is clear from the above, it is that the 2021 budget aims to make meat of the working masses, with no fundamental shift in approach or break from policy orientation from the neoliberal framework or any practical step distinct or different from all other budgets of the past. It is the same of the same and not aimed at breaking the cyclic and endemic nature of poverty in the country. A consequence of the fact that it is the same approach of deregulating, social spending cut, debt servicing to access new loans facilities, and a bogus governance spending which constitutes close to 30% of the budget to tend to the largesse and excess earnings of elected public officials at the dire need for funds for the economy and the entire needs of the working masses.
For a country that has already overtaken India on the World Poverty Clock, as the “poverty capital of the world” with about 90 million people- half of Nigeria’s population – living in extreme poverty, and 80 percent of the population living on less than $1 a day. Can the working masses and youth of Nigeria hope for any form of economic recovery from the Buhari regime’s 2021 budget, of a continuation of the same life of misery and poverty for the working masses?
The 2021 budget is a background by a preceding year of the break down of the world economy occasioned by the coronavirus pandemic, which shut down the world economy for months, resulting into the greatest lost of fund for the public sector and the highest numbers of lost of jobs ever in the private sector, and for a neo-colonial economy that dependent on crude oil exports, which generate 76% of Nigeria’s foreign exchange (and 11.8% of GDP), resulting into crude oil price slash of 60% continues to impact on the Nigeria economy, exposing it to be nothing more than a cash and consumption spending economy with no real or projected development of industrial infrastructures. And yet Buhari in his 2021 new year message credits the 2020 budget with a falsified “impressive” performance of 97.7%, even with all the attendant shocks that the economy witnessed in 2020 can the US or China have given itself such a huge figure of success, only demonstrate that the Buhari regime enjoys in concocting for itself success that cannot be physically verified either on the ground or in the lives of the working masses.
How then will a promise to “lift 100 million Nigerians out of poverty over the next 10 year” be achieved, when the same policies that is responsible over the past period of making the country poverty capital of the world, ever lift anyone out of poverty except serve to protect and further enrich members of the billionaire club. However, the contents of the 2021 Budget is speaking otherwise. The Budget is set on several assumptions among which are benchmark crude price of $40 per barrel, 1.8 million barrels daily oil production, an exchange rate of N379 to a dollar and inflation growth rate of 11.59%.
RECESSION FOR THE POOR MAJORITY, RECOVERY FOR THE RICH FEW
Faster than it could be imagined by Buhari that Nigeria’s recession will come in third quarter of 2021, Nigeria fell into its worst recession since 1987. Analysts say it is Nigeria’s worst economic recession in over three decades. According to Gross Domestic Product numbers released by the National Bureau of Statistics on Saturday, 21st November, 2020, the nation recorded a contraction of 3.62 percent in the third quarter of 2020, attributing the contraction to slow oil production and the COVID-19 pandemic.
The National Bureau of Statistics (NBS) stated that the Cumulative GDP for the first 9 months of 2020 stood at 2.48 percent and that the economy shrank by 6.1 percent in Q2, indicating that two consecutive quarters of negative growth have been recorded in 2020.
This is the second consecutive quarterly GDP decline since the recession of 2016. The cumulative GDP for the first nine months of 2020, therefore, stood at 2.48 percent. The last time Nigeria recorded such cumulative GDP was in 1987, when GDP declined by 10.8 percent.
According to World Bank and NBS figures, this is also the second recession under President Muhamadu Buhari’s democratic reign — and his fourth as head of state. While 2020 global economic recession was predicted across the world as a fallout of the ongoing COVID-19 pandemic, the Buhari-led Federal Government of Nigeria and imperialist financial institutions, the World Bank and International Monetary Fund attributes the collapse in oil prices coupled with the COVID-19 pandemic.
The two Bretton Woods institutions, International Monetary Fund and the World Bank and their overfed underlings in the Nigerian ruling elite, want us to believe that the recession was a “force majeure” situation, the toll that the debt servicing the Buhari-led regime is making to the two institutions is deliberately cut out. As at 11th December, 2020, Nigeria’s external debt profile is put at $27 billion(www.nairametrics.com). Experts put this debt profile has hitting a fifteen years all-time high since 2005.
The point must made that there is no panacea that can come from this stand of the IMF, if anything it is aimed at further handing over whatever has not yet been privatized to the capitalist sharks to further eat off.
Buhari’s optimism that the GDP could expand by 3% in 2021 is now in doubt. The regime is looking to plug the budget shortfall via borrowing N4.28 trillion locally and internationally from the IMF, World Bank and Chinese lenders on chronic conditions. It is nevertheless not up to the N5.4 trillion approved for 2020 comprising essentially domestic bond sales and concessional loans overseas. On 15th December, 2020, the World Bank approved Nigeria’s request for a $1.5 billion, sixteen days to the commencement of 2021.
What is clear is that amidst the global Coronavirus pandemic, the Nigerian ruling elite is preserving its exorbitant and bogus lifestyle with heavy borrowing. Indeed the working masses of Nigeria have been in a “permanent recession” of a sort with over 90 percent living below $1 a day. With that background, the recession or slump in terms of the country’s GDP does not come as a surprise for the ruling class.
This is because they have a ready response to the recession and debt servicing, which is to offload the burden of the crisis on the working masses. Value Added Tax was increased from 5% to 7%. The regime equally imposed an increase in fuel and electricity charges. Petrol prices rose from 121 naira per litre in June,2020 to over 143 naira in July, 150 naira in August and 162 naira in September, 2020. Electricity tariffs was also increased from 30.23 naira for 1 kwh (kilowatt per hour) to 62.33 Naira per kwh (kilowatt per hour). This is nothing but taking blood from an hemorrhage patient!
With the sharp drop in social spending, working class and youth must not take these attacks lying low. We need to build an all-encompassing mass movement to resist this wave of neo-liberal attacks and reclaim the traditional fighting, if anything the budget and its projection from beginning to end, is aimed at taking the little of the working masses to continue to guarantee a luxurious life of excesses for the ruling elites and the members of the billionaire club. Not a trust whatsoever on the Buhari Regime, time to organize and fight back. The NLC and the TUC, must not be hoodwinked by all of these false projection, which the working masses have suffered and endured with no resultant effect of diversification of the economy, only a break from capitalism, and mobilization of fund and wealth of the country, with a focus on industrialization, any linking agriculture to it, can increase production and generate jobs for the working masses, massive investment in all the sector of the economy, can ensure that the educational, housing, food, electricity need are made available and accessible to the working masses. This is the only path to development that can ensure an end to poverty in the country. The working masses must therefore get organize, challenge themselves to reclaim the trade unions, and reposition them to provide the necessary leadership to lead a resistance against the projected attacks on the working masses.
The working masses must also end their support for the APC, PDP, indeed all anti-poor people parties of the bourgeoisies, since they all represent the same thing and step up to build an independent political platform of the working masses that seek to bring about a government of the working people.