Margin Budget of no Effect

President Buhari signing the 2019 budget into law

Victor Ariole
When you are marginalised by those who appropriate to themselves greater stakes in politics or economics, your views are also seen as marginal; so, also, everything about Africa is seen; either as marginal or, at best, as emerging. Nigeria being the most populous country in Africa is still seen as marginal or an emerging economy; so its budget can only take the shape of a marginal budget in a world dominated by knowledge economy as majority of its people remain in the margins of knowledge acquisition. Seventy percent in the north uneducated, 11million out of school, hence a budget of margins, just for tiny portion of Nigeria, reacting as termites.

What I read in the budget of supposedly great economies of the West is how to reduce budget deficit not necessarily what they earn or what they spend, though reducing budget deficit imply such issues as earnings and spending, focus is on waste eliminator not to create ants to destroy their wealth. It also implies that as long as people are productive and at work, deficit reduction could mean an austerity measure which has never worked, as stimulus has always prevailed. Basically, the US Congress’ refusal to approve $5billion border wall of the USA’s president is to reduce the huge budget deficit that the USA has been incurring over the years, ($23trillion debt), yet it is the economy rated as greatly performing with more people getting into the job market than any other country.

It is also known that the Mayor of New York operates far greater capital budget than found in Nigeria’s current budget of mere N8trillion (about $20 billion) yet 23% of capable hands in Nigeria are not finding jobs to enhance the overall “economic carrying capacity” of Nigeria that shows greater marginalization upon which budgeting could only be seen as voodoo budgeting hinged on weak thinking or marginal thinking. What is there to budget for, when most Nigerians seem to be on their own except the politicians.

Marginal activity is what the proposed earning and spending of the budget is based and it could only yield marginal result that exclude the majority; or operates in disdain of capable hands begging to be included so as to form the real norm yet to be used in the budgeting process. One of the basics you learn in MBA class that concerns accounting is that until average cost equates marginal cost, where marginal cost is seen as the contribution of each activity in the assumed average cost of all activities remaining proportional to the value of such activity to the entire activity, it is seen as not yet optimising. This is where subsidy tends to be seen as eroding optimisation process.

In effect, Nigeria’s budgeting process that always see the legislators raising the oil benchmark is completely a weak thinking process and quite a voodoo economic activity as, generally, the oil price is not determined by Nigeria but by those who are directly or secretly in charge of both the oil pricing mechanism and its supply chain, the leading powers. And, even, the Central Bank of Nigeria that must ensure that it does not release into Nigeria’s economy more than Nigeria is contributing to the world, albeit, marginally, vis-à-vis what such greater stakeholder see as partaking in the average costing of maintaining the global economy, costed and regulated by seen and unseen hands of organizations like UNO, IMF World Bank, NATO, etc. These are strategic organisations incurring costs towards regulating world’s economy, and they are very strict in making sure that a given nation does not earn more that it deserves; sanctions could be imposed or whatever they deem necessary to frustrate such nation’s economic prospects.

Nigeria has been clamouring to be among the 20 most developed economy in the world for decades; and a small country like Taiwan had been there for decades; and Taiwan basically operates its budget on earning as function of added value from whatever it is importing from others to reach final products, which is better in attaining optimisation. Nigeria needs to think along that line in its budgeting process as against the legislators’ arbitrarily raising oil price. Like Taiwan like South Korea, smaller in size but greater in GDP than Nigeria.

The minimalist way of evaluating our legislators must be to see the laws that they are making that give Nigerians and investors operating environment that encourages adding values to what the Nigerian knowledge base, its people and its resources’ comparative advantage prospects add in terms of National wealth. For example, it was known that South Korea enacted a law and greatly marketed that law which enabled any investor in the 70s to come with a given amount of dollar and open industry with some tax free benefits as long as such industry engaged in exportable goods. Their aim was for foreign reserve booster and it worked. Some Nigerians were known to have participated in the making of that prosperity. It was even a time when people, there, were eager to acquire Nigerian university degrees, paying for it in dollars in South Korea as Nigeria takes back manufactured products like air-conditioners, fridge and computers. Today South Korea is one of the 20 most industrialized nations from their former poor state.

In effect till Nigeria starts getting out of the margins with its paltry earnings that is far below its optimization capacity, it will be baseless discussing marginal budgetary presentation that makes more mockery of the system as legislators go into executive function of allocating more funds to themselves instead of questioning spending that do not reflect right earnings.
I have never heard any where that legislators make more appropriation to themselves as against either adopting or querying the spending patterns of the executive.

The current budget of about N8trillion does not reflect the production capacity of Nigeria, upon which taxation could be extracted from the entire Nigeria’s people and resources; hence quite a marginal budget. And, as majority of Nigerians remain marginalized in the production system so also will the progress of the entire country remain marginalized in the greater economy of the world.

Time to open the space and allow youthful Nigerians and women participate effectively in a small scale operations for more wealth creation, and it is seen in the great input of the Diaspora as reflected in their remittance and GNP, which has not been matched by internal policy of citizen diplomacy, as no succor for some of them thriving abroad.
Ariole is a Professor of French and Francophone Studies
University of Lagos