Virtually,all the available analyses of the 2012 Appropriation Bill focused on the expenditure proposals. They examine the various over-funded and under-funded sectors considering their respective contributions to economic growth and the general well-being of the people. But there is a deeper angle to the budget which is the revenue side. How will government raise the resources to fund the budget and where will the resources come from' Expenditure must be based on current income, accumulated savings or borrowing.The Federal Governments retained revenue for 2012 is N3.644.66tn while it proposes to spend N4.749.10tn. This leaves a fiscal deficit of N1.104.44tn which amounts to2.77 per cent of the Gross Domestic Product of N39,904.26tn. The Revenue and Expenditure Framework accompanying the budget declares that deficit financing will come from the Federal Governments share of signature bonus, sharing from the Excess Crude Account and new domestic borrowing in the sums of N75bn, N225bn and N794.44bn respectively. But that is not the end of the story. The Federal Government plans to raise N1.394tn from the domestic capital market comprising N794.44bn to finance the 2012 budget and N600.41bn for the refinancing of maturing bonds. The new borrowing and the borrowing to refinance maturing bonds is definitely more than the fiscal deficit for the year. Leaving the story at the fiscal deficit of N1.104tn does not show the complete picture of proposed borrowing for 2012.The government also wants to borrow over $1.7bn from external sources comprising $679.53m being drawdown on existing loans and new borrowings of $1.032bn. If this is converted to naira at the rate of N155/USD, it is in excess of N264bn. When the proposed local and foreign borrowing is added, it is in excess of N1.658tn which is more than one third of the overall budget proposal. And this borrowing is in excess of the proposed capital budget of N1.32tn by N338bn.The challenge in all these proposals for accumulating debt is that they do not follow the law. Our debts are mounting. It in excess of $40bn. The Federal Government has proposed N560bn for debt servicing and the trajectory is that more money will be required in 2013 to service existing and new debts. Yet, instead of withdrawing from borrowing or even placing a moratorium on borrowing, it is increasing the stock of debts. Evidently, Abuja is borrowing to finance recurrent expenditure in contravention of the Fiscal Responsibility Act. Many posers are raised; where are the capital projects financed by these debts' Where are the capital projects to be financed by the new loans and borrowing' Has the Federal Government shown Nigerians enough respect by its failure to prepare and make public, the cost-benefit analysis of the projects to be financed by borrowing as demanded by the FRA' Why has the National Assembly looked the other way as our laws are routinely violated'The foregoing proposals do not include the sums that will be raised by various state governments from the domestic capital market. The implication of huge borrowing by government at the two tiers Federal and State will be the continuation of credit squeeze and the crowding out of the private sector from the credit market. Government bonds will continue to attract higher yields and investors will continue to invest in them to the detriment of the private sector. The other implication is that the capital market may not likely recover in 2012!The budget still made provisions for the Nigerian National Petroleum Corporations share of incremental joint venture funding gap of N515.68bn at a time the proposed reforms in the petroleum industry would have been earning additional resources instead of incurring unnecessary expenses. If the Petroleum Industry Bill which is yet to be re-presented by the President to the legislature after work on it stalled in the Sixth Session had been passed into law, it would have earned new resources in excess of N3tn annually to the Federation Account. This would have left the Federal Government with additional N144.15bn going by its share of 48.5 per cent of the Federation Account allocation.Reverting to the expenditure side of the budget, something strange, illegal, and non-transparent has become institutionalised in Nigeria. Replicated in the 2012 budget proposal, statutory transfers have always been stated in the budget as lump sums without disaggregation. There is no indication of what the monies will be spent on. Thus, transfers to the Niger Delta Development Commission, National Judicial Council, Universal Basic Education, National Assembly and the Independent National Electoral Commission are lump sums, the details of which are unknown to Nigerians. This practice is illegal, arbitrary and subversive of the fundamental tenets of democratic participation. Section 48 of the FRA mandates the Federal Government to ensure that its fiscal and financial affairs are conducted in a transparent manner and accordingly ensure full and timely disclosure and wide publication of all transactions and decisions involving public revenues and expenditures and their implications for its finances. In the past, Nigerians had the opportunity of reviewing and criticising the budget of the National Assembly but have, apparently, lost the opportunity now that the budget has become a statutory transfer. Basing lump sum transfers of public money to institutions on the need to respect separation of powers or independence of the institutions is a misnormer and has no place in a constitutional democracy where public monies should be spent transparently for public purposes.Further compounding the matter is that debt service is stated as a lump sum without disaggregation. The public is left guessing as to what sums have been borrowed and what they were used for and how the monies appropriated in bulk are to be disbursed. The legislature owes Nigerians a duty to ensure that all these allocations are disaggregated and put up in appropriate websites or published like other expenditure proposals.The 2012 proposals repeated the previous mistake of spreading out too thinly. A clear example is the proposals of the Ministry of Works. Despite the paucity of funds, the budget takes on board hundreds of projects which available funds cannot complete. At the end of the year, the reasonable expectation is that not much progress would be made considering that little, and sometimes no funds, will be released for a good number of the projects. Thus, the budget becomes an exercise is self deceit.In the light of the foregoing, the revenue side of the budget should be re-engineered to ensure that government earns more revenue from the revenue generating agencies and from internally generated revenue. The pruning of wasteful expenditure will ensure we live within our means. Serious consideration should be given to a moratorium on unnecessary new borrowing. Any new proposal to borrow must be backed by a cost benefit analysis and must be for a verifiable capital expenditure.- Onyekpere, Lead Director, Centre for Social Justice, Abuja, wrote in via censoj@gmail.com. 08127235995
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