Nigeria’s President Goodluck Jonathan will in 2015 trade in an aircraft in the presidential fleet plus a N400 million ($2.2 million) deposit (to the manufacturer) to get a new aircraft, amid apprehension about the fate of the oil-dependent economy in the coming year.
This was contained in the 2015 budget presented to the National Assembly last week by the country’s Finance Minister and Coordinating Minister for the economy, Ngozi Okonjo-Iweala.
Austerity sermon falls on deaf ears
Okonjo-Iweala had last month said the country needed to brace itself for tougher times ahead. This was after the reviewing of its expenditures and building economic buffers as global oil prices continue to fall. The government used $65 per barrel, believed to be a modest price, as oil benchmark for the 2015 budget. The minister also announced that austerity measures to be taken include reduction of foreign travels by civil servants, increase in luxury tax and increase in Value-added tax, among others.
Oil accounts for 40 percent of Nigeria’s GDP and 80 percent of Government earnings. With oil prices now below $60 per barrel, the country may not be able to fund its budget except some drastic measures are taken to shore up the deficit. The austerity measures announced by the minister is one of the ways the government will try to keep the economy afloat. A new aircraft for the president, therefore, couldn’t have come at a worse time, as it is at best counter-productive.
An expensive government?
The Presidency will spend N215 million ($1.2 million) on food stuff and catering materials. It has budgeted N12.9 billion on personnel, N11.2 billion on overhead, N24 billion on recurrent and N2.57 billion on capital projects. The National Assembly will get N150 billion, while the judiciary N73 billion.
This is compared with the N358.5 billion that was voted for the ministry of Defence – tackling the countries greatest challenge, the Boko Haram. The ministry of defence comprises of the main ministry, the Army, the Navy and the Air Force. N84 billion was budgeted for the Office of the National Security Adviser (NSA), comprising National Intelligence Agency (NIA), Department of State Security (DSS/SSS), Presidential Air Fleet (which manages all the presidential aircraft).
Also towards the country’s fight against insurgency, N1.3 billion is budgeted to be spent on NICEP II security elements phase II by the NSA, N2.1 billion for maritime border security solutions (Falcon Eye), N2.1 billion for North-East border security solutions and N850 million for the DSS to buy more firearms and ammunition for all service formations.
Health is proposed to get N257 billion while Education has a budgetary proposal of N492 billion.
The Ministry of Finance is proposed to get N1.7 trillion with a large portion of it dedicated to the Service Wide Vote. The Service Wide Vote is a vote created to serve all Ministries Departments and Agencies (MDAs) for emergency purposes not captured in MDAs yearly budgets, but for which funding has been provided for.
Exchange rate: $1 = N185