Image credits: One Nigeria

Recently, The president of the federal republic of Nigeria released the budget for 2019, going through the budget we’ll realise that there is nothing new expected to happen in the coming year.
Below is a quick analysis a friend on mine Mona Moxie gave me on whatsapp today about the budget, kindly follow through I assure you, you’d not be bored:

Here is a simple break down for the 2019 budget. I made it as simple as possible, no economic jargons so you understand those things you saw in the news and know how to plan your life.

The budget size is 8.83 trillion naira, this is the total amount the government is expected to spend in 2019.

A quarter (14) of this amount would be used to pay debt. The truth is Nigeria is owing a lot of debts, therefore around 2.14 trillion naira will be used to offset part of these debts. What would be left of the budget should be N8.83T - N2.14T = N6.69T.

The budget for capital expenditure is N2.031 trillion, capital expenditure means the money that will be used to fund projects such as the construction of roads, bridges, hospitals, etc. If Nigeria decides to construct any major project by next year, that’s the amount allocated for it. So what’s left will now be N6.69T -N2.031T = N4.65T.

Recurrent expenditure is 4.04 trillion naira. Unlike capital expenditures where you pay just once, this is allocated for stuff that may keep re-occurring and you have no choice but to settle, things like salaries, wages, service fees, etc. So what’s left will be N4.65T -N4.04 T = N619 billion.

Sinking fund is estimated at 120 billion naira. You know even after paying the debt earlier stated we will still be owing some money. See this money as something that is kept aside as savings to later pay back other entities we are currently in debt to. So what’s left will be N619B -N120B = N499B.

Photo Credits: Business Day

Last but not least is what they call statutory transfer, this is set at N492.36B.
This is the money that is paid to Senators and house of rep members. Even if Nigeria is burning, one naira out of this money must not be touched, they must be paid to the lawmakers and leaders. So what’s left will be N619 -N492B = N6.64B which will be kept in case of emergency.

So how and where does Nigeria get money to fund this budget? you may ask.
Usually, we fund budgets through many components but the most reliable means we have at the moment is via crude oil. As such, we plan most of our projects around the money we get from this sector.
Ceteris paribus (all things being equal), here is how Nigeria plans to get the money. Follow me, please.

Global oil prices are falling, some countries are leaving oil for renewable energy, the current price globally is around $45 per barrel but Nigeria is ‘hoping’ it will rise to $60 per barrel in 2019. How will this happen? We’re just hoping.
Now if oil prices do not rise as we hope then we are in big problem, we then have to go borrow else we won’t be able to fund the budget.

Secondly, we can only fund this budget if we keep producing 2.3 million barrels per day.
Currently, we can barely produce 1.9 million barrels per day.
But you know what, we are hoping if Jesus could raise dead Lazarus back to life, it won’t be hard for Him to help raise production limit from below 1.9 barrels per day to above 2.3 barrels per day.

Thirdly, we can only fund this budget without stress if the inflation rate is around 9.98%.
The CBN governor said we should expect the inflation rate to rise to 11.4% and the IMF even said it would rise to 13.5%.
We are hoping it won’t go that high, we are serving a living God and He will keep it at 9.98% for us.

Fourthly, we are hoping dollar will be roughly N305 per $1 which may or may not be possible, but let’s hope it does.

Number 5: We hope the GDP growth rate will be 3.01% when the current reality is that GDP growth rate is barely up to 1.8%.
But we are hoping that it doubles. By the way, we are a prayerful nation, we will pray until our GDP rises from 1.8% to 3.01%.

So this is my opinion: 2019 doesn’t seem like the year where things will change for the economy of Nigeria and sorry to disappoint you, this post is not against the government of Presiden Buhari, he is trying his best no doubt but he does not have the answers. Atiku won’t be the answers either, our problem is beyond one man, it’s beyond PDP or APC.

By 31st of this month(Dec 2018), a lot of us will be gathered again in Church waiting to cross over to the new year, praying and kabashing for things to change, shaking and rolling, rolling and shaking.
Like our president, it’s all a series of hope and like our fathers before us, that’s how they prayed and hoped and here we are today.

But they forgot one thing:

Hope is not a Strategy

Hope deferred makes the heart sick, the times have changed my friend, I may not have the solution to all our problems in this country but I have a solution for you:

Fix Yourself.

Big shout out to Mona Moxie for his detailed analysis.