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2020 Nigerian Budget: The Questionable Little Line Items

Summary of the Budget and Allocations

A 1969 pages document- the 2020 Nigerian budget specifies the amount of money that will be spent by all the Ministries, Departments and Agencies in the country in 2020. While it did not provide the full details of how the revenue will come, it however provides all the details of expenditure by all the 48 MDAs in the country ranging from the office of the Auditor General of the Federation (AGF), to the Secretary to the Government of the Federation (SGF). These 48 MDAs also have different sub-MDAs (totaling 930) under them. For example, there are 129 sub-MDAs under the Ministry of science and technology as there are two MDAs under the ministry of Niger-Delta (Ministry of Niger Delta HQ and Niger Delta Development Commission). For the ministry of Education, the popular sub-MDAs under it are all the federal universities and federal government colleges (FGCs). The budget therefore specifies all the money to be spent from categories to line items (which represent the smallest amounts such as spending money to buy fuel, newspapers and magazines).

On the 5th of December 2019, the senate passed the 2020 budget as it increased it to N10.59 trillion (budget per head at N52, 950 assuming a population of 200 million) which represents 2.5% increase from the proposed budget of N10.33 trillion and it represents the most ambitious budget in the history of Nigeria due to the expenditure being the highest in history. According to the budget passed on the 5th of December, capital expenditure for 2020 amounts to N2.46 trillion (23% of the budget), N4.84 trillion to be spent on salaries and overheads (denoted as recurrent non-debt expenditure and takes 46% of the total budget), debt servicing to gulp N2.72 trillion (26% of the budget) and statutory transfers amounting to N560 billion (5% of the budget).

While there have been different efforts from all corners talking about the big figures, this article however aims to breakdown the little figures which seem not to matter (to some individuals) but will make much impact if diverted to other areas that matter.

The 48 MDAs are to Spend N524 million on Newspapers in 2020

Based on the recently passed 2020 budget, it shows that all the MDAs will in total, spend the sum of N524 million on newspapers in 2020 with the ministry of Defence spending the most on Newspapers at a cost of N73 million, followed closely by the ministry of Education at a cost of N67 million. Of all the Federal Government secondary schools, FGGC Jalingo got the highest share for Newspapers at N394 thousand while National Open University got the highest amount (N9 Million naira) for newspapers among all the Sub-MDAs under the Ministry of Education.

While it is justifiable for the Federal Government Schools to have newspapers and magazines in their libraries as an alternative to gadgets in order to know what is going on in the economy and beyond, it is questionable for the other MDAs to have fund set aside for this. In fact, it is now a global recommendation to print less in order to preserve the environment. Moreover, there are fund set aside for subscription charges and fuel costs which further denotes duplication in terms of fund allocation as the TV (satellite broadcasting access charges at N718 million can be used as a substitute in keeping an individual abreast of situations instead of the newspapers. This therefore leads to the popular notion: “Who still reads newspapers these days?”

2020 Anniversaries/Celebrations by the MDAs will gulp N4.32 billion

The federal ministry of labour and employment will be spending the sum of N2.72 billion on anniversaries and celebrations in 2019. While the Federal Ministry of Labour HQ will spend N2.5 billion on celebrations, the Geneva labour desk office, National productivity centre and Micheal Imodu Institute of Labour will share the remaining N220 million on annual celebrations.

Majorly, there is only one Nigerian workers celebration in a year and it is the Workers Day, usually celebrated on 1st of May every year which also translates to international labour day. And this shows that the major annual celebration that concerns the ministry of labour and employment is the Workers day, except if the MDA is the one in charge of Democracy day as well as independent day which is unlikely.

Followed is the ministry of science and technology which will spend N461 million, followed closely by secretary to the government and the ministry of information and culture which will spend N278 million and N274 million respectively on annual celebrations in 2020.

Like Newspapers, the MDAs are to Spend N482 Million on Magazines in 2020

Just like the newspapers, MDAs will spend almost half a billion naira on magazines in 2020 of which the ministry of defence will spend the largest amount. However, while it is justifiable for the ministry of foreign affairs and education due to the nature of their activities, the justification to spend N183 million on magazines by the ministry of defence is minimal as the Nigerian Army will spend the largest (N114 million) of all the sub-MDAs under the ministry of defence.

Local and International Travel and Transport

The MDAs will spend a total sum of N24.73 billion on both local and international travel and transport (excluding travelling for training purposes) in 2020. This comprises of local travel and transport at N16.34 billion and international travel and transport at N8.39 billion. It is also worthy to note that apart from this huge sum budgeted for travels, the MDAs will also spend N6.11 billion on motor vehicle fuel cost and N2.33 billion for Aircraft fuel cost. This means that in addition to spending N24.73 billion on travels, they will also spend N8.44 billion on transportation fuel cost.

For the local travel and transport, the ministry of defence will be spending the most amount at N2.77 billion  followed closely by the presidency at N2.05 billion. To some extent, it is justifiable for both MDA especially for the ministry of defence due to the level of insecurity in the country as the need to keep the citizens safe becomes its top priority. However, it is still bogus considering the fact that the same ministry will spend N5.42 billion on aircraft fuel cost, sea boat fuel cost and motor vehicle fuel cost in 2020.

However, the presidency tops the list of MDAs in the ranking for international travel and transport at N2.48 billion (29% of the total international travelling expenses), followed by the ministry of foreign affairs which will spend N2.33 billion on foreign travels and transport in 2020.

Others

Based on the 2020 budget, the former presidents, heads of states, vice presidents and chief of general staff are to be paid N2.3 billion as entitlements in 2020. The government is also sponsoring Muslim and Christian pilgrimages with the sum of N500 million as it keeps on purchasing scanners every year (N209 million in 2020).

Conclusion

As Nigeria enters 2020 with its largest budget in history, it is necessary to cut down unnecessary spendings as well as those spendings that overlap each other. This is because over the past years, the FG has not met its revenue targets but somehow meets recurrent expenditure targets because the government must pay salaries. As it does so, two items suffer- revenue and capital expenditure. As such, the deficit is financed from borrowings and majority used in paying salaries and meeting overheads. As there will surely be some hidden unnecessary projects in the capital expenditure, this research only focuses on the recurrent expenditure as the researcher has observed it is where majority of the funds go into and cutting down unnecessary spendings is identified to bring about reduction in proposed deficits.

From the analysis, it shows a total amount of N1 billion will be spent on newspapers and magazines in 2020 while over N4 billion naira will be spent on celebrations and anniversaries in the year 2020. While some of the celebrations are justifiable, it is also necessary to cut down the size and have modest celebrations as the need to cut down unnecessary expenses arises. Further, this research established the payment of entitlements of head of states and presidents should also be looked into as well as paying for pilgrimages out of tax payers money.

Overall, there is also the opinion of cutting down the cost of running the National Assembly. However, the researcher believes it is generating too much attention than it should as the national assembly only has N125 billion allocated to it for a year while the 3 tiers of government share over N700 billion monthly. So, the public opinions should also be directed towards these as over 90% of local government in Nigeria only exist to pay salaries and do not contribute to local economic development.

Special thanks and recognition to Resa Data Solutions for their support in relation to the analysis and visualizations of the data used in this article.

You can provide your comments in the space provided below. Additionally and should you need data backed research and analysis for your business or research needs, you can contact us with your message in the comment section or send a mail to info@giftedanalysts.com

4 Comments

  • Solutionwheels

    Well detailed analysis.
    It is surprising that Debt Servicing will gulp about 26% of the total budget, so devastating.
    The government keep designing budget without a concrete plan of what to do.
    This is about time we start asking questions about how they plan to finance their plan. Well, what if we even ask? Clueless government everywhere. Does Buhari even understand this Budget himself?

    • Abdulazeez Kuranga

      Thank you Solutionwheels.
      I think it is really not surprising to have debt servicing eating about 26% of the budget because it is what is expected when you are borrowing more money for consumption purposes than for investment purposes. There are cases of borrowing money to pay salaries as well as individuals siphoning money. So it is expected.
      The budget is also an incremental budget which means that the items in the budget are not justified, those responsible just only add a little amount to each items based on what they budgeted for it in the previous years. And they know that Nigerians do not really like reading figures that bore them. So they put the little items in between the figures so you will only think they are small, which they are not. And this is an advantage of visualization because you can never lie with it.

      • Solutionwheels

        Well, maybe expected but then this people don’t want to learn. They want to enrich their own generations so they won’t feel the impact of the generational burdens of all these loans they are collecting. Yet he still wants to add $30 billion to the existing loan they have

        • Abdulazeez Kuranga

          According to them, the interest on the loan is around 1% to 1.5% and it has 5 years moratorium on it.
          The problem with loans over the years is just that they are not mostly accounted for. Hence, the kind of negativity around the intended loan too.

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