WITH just four weeks left to quit office, the President, Major General Muhammadu Buhari (retd.), and regime officials are taking decisions and inking deals that are potential booby traps for their successors. Among these are a pay rise, fresh contracts and procurement deals, borrowings and unresolved reforms that will undoubtedly add to the already humongous challenges that await the President-elect, Bola Tinubu. Buhari has mercifully deferred the planned petrol subsidy removal, and equally postponed the potentially incendiary census; he should also halt all further non-essential commitments and avoid bequeathing further constricting burdens on his successor.
To be sure, governance demands continuity, and global best practices emphasise that the business of government – executive, legislative, and judicial – should hum along smoothly during transitions and even during emergencies. This principle underpins stable democracies and incumbent governments are expected to fulfil existing commitments and domestic and international obligations until the last minute of their terms. Some like the United States have codified the Continuity of Government concept to legislate smooth functioning in time of war, emergencies, or natural disasters.
However, this should apply strictly to existing, ongoing activities and policy commitments of the outgoing government, or during emergencies. It is problematic when with only weeks left, officials bind the incoming government to fiscal and legal commitments that are non-essential and thereby inadvertently impose huge financial, logistic, or socio-economic responsibility on a succeeding administration.
Thus, while the government is bound to budgeted or approved, and pre-agreed policy, legal and financial engagements, entering into new non-essential or emergency procurement, or spending deals is unfair to the country and the incoming government. This is especially so when the treasury is empty, debts are at record levels, and almost all revenue is spent on servicing debts.
Committing the government to a higher payroll burden as Buhari has just done does not qualify as an essential activity. He authorised a 40 percent pay rise for federal civil servants just 36 days to his exit date. The reasons the regime cited – to cushion the high cost of living, transport fares, housing, electricity tariffs and other inflationary causatives – sound humane, but should have been left to the new administration to implement given the paucity of funds.
This is a fiscal ambush for Tinubu. In the 2023 federal budget proposal of N20.51 trillion, PwC noted that the non-debt recurrent expenditure of N8.27 trillion is 40 percent of total spending, of which personnel costs is gulping N4.99 trillion, representing 60.33 percent of recurrent. With an in-built deficit of N10.78 trillion, “Nigeria needs to generate 111 percent of its current revenue to be able to meet its expenditure needs without borrowings,” it warned.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, admits that the regime spends 96 percent of all revenue to service debt and borrows to meet salary and pension commitments. The pay rise will make life harder for the next government. Though the government said it had been captured in the 2023 budget, current realities highlighted by acute revenue shortfalls dictate its being paused.
Buhari inherited an oversized, expensive bureaucracy; he would have done Nigeria a great service by first drastically downsizing it and saving billions of naira before contemplating any pay rise.He failed to implement the pruning and cost-saving recommended by the Steve Oronsaye panel report. He has compounded this failing by this fiscal misstep. The N854.8 billion budgeted for gratuities and retirees’ benefits in 2023 will inevitably rise.
Other officials are following suit. The last Federal Executive Council meeting approved new and reimbursed existing contracts worth N100 billion. Not all these were urgent or essential.
Amid fears that the government had begun to default on the China Exim loans, reports that the bank recently declined granting the government another N22.8 billion loan request shows no slow-down in Buhari’s borrowing appetite. The incoming government will inherit a debt burden of N77 trillion when the N23.8 trillion ‘Ways and Means’ advances are securitised by the NASS as Buhari has requested, and added to the total public debt stock of N44 trillion.
Meanwhile, the Minister of Aviation, Hadi Sirika, remains hell-bent on floating a national carrier (Nigeria Air) before May 29.He also reportedly purchased 10 fire-fighting trucks at a colossal N12 billion for the Federal Airports Authority of Nigeria! Moreover, the regime has not resolved the lingering foreign airlines’ trapped funds of about $800 million.
Alarmingly, judgement debts such as the P&ID scandal may also cost Nigeria 30 percent of its $37 billion foreign reserves. In September 2022, the Attorney-General of the Federation, Abubakar Malami, disclosed that the government would pay $496 million to foreign investors to settle longstanding contractual disputes, and $715.86 million promissory notes to judgement creditors. Add the N5 billion damages awarded to Ifeanyi Araraume reinstated as chairman of the Nigerian National Petroleum Company by the court; allare waiting for Tinubu.
Unfortunately, the leadership of the Ninth National Assembly has failed to curtail Buhari’s fiscal waywardness; it owes Nigerians a duty to stop last minute non-essential spending plans. The country is on edge, tensions are high as ethno-religious divisions accompanied the 2023 elections, insecurity reigns in many parts, poverty is pervasive and the economy, headlined by revenue shortage, is fragile. There are 23 million unemployed or underemployed and divisive sentiments run high. The NASS should halt new contracts and loans.
Government is a continuum, but convention dictates that sustainable development plans should be nurtured by successive governments, but new and unprofitable contracts should be suspended by departing governments.
The incoming government will contend with terrorism, Fulani banditry, kidnapping-for-ransom, killings and secessionist agitation in the South-East, and criminal gangs and violent transport unions in the South-West.
On the bright side, Buhari dropped the planned census and suspended the potentially explosive petrol subsidy removal; he should exercise similar discretion by avoiding new financial commitments and stopping ministers, and heads of departments and agencies from the same.
Nigerians and his successor deserve soft landing, not booby traps.
Credit: Punch
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