The Atiku Abubakar Campaign  Organisation  notes  with  regret  the  deliberate  attempt  by  the  Federal Government to distort facts and confuse Nigerians on the economic performance of the Goodluck Jonathan administration particularly in the implementation of the capital components the 2010 Appropriation Act as amended and supplemented. It will be recalled that the 2010 Amended and Supplementary Budgets provides N2,669.01billion for recurrent non debt  expenditure, N1,764.69 billion for capital expenditure, N542.38 billion for debt service and N183.58billion for statutory transfers. These figures as a percentage of the overall budget represent 52% for recurrent non debt expenditure, 34% for capital expenditure, 10% for debt service and 4% for statutory transfers respectively. 

Dr Aganga had informed the House of Representatives in plenary in the first week of November 2010 that of the entire capital budget, only the sum of N749billion had been released, cash-backed and available for Ministries, Departments and Agencies of government (MDAs) to draw from. This is however N1billion less than the N750billion he claimed to have released and cash-backed in response to Atiku’s statement. Dr Aganga has also been quoted to state that the federal government will increase the released and cash-backed sum to N900billion by the end of 2010, which will be an addition of N150billion. The Minister of Finance further informed the House of Representative that of the N750 billion cash-backed, only N404.5billion has been accessed and utilized by MDAs. Essentially what the Federal Government has released and cash backed is 42.5% of the capital budget and what has been accessed and utilized by MDAs is 22.92% of the entire capital budget for 2010.

For the Federal Government to now lay a claim of having implemented the capital budget up to 64.6% is nothing but a fraud. Nigerians should ask President Jonathan, 64.6% of what figure? The figures of capital budget implementation vis, 97.3% for Niger Delta, 96.7% for FCT, 86.7% for Agriculture, 86.05 for Defence and 67% for power attracts the same question;  percentages of which figure? Essentially, the government has made up its mind to sabotage the implementation of the 2010 capital budget by setting a target of releasing only N900 billion which is 51% of the appropriated sum.

Even these figures put forward by the Federal Government are doubtful  considering that the Minister and the Budget Office of the Federation have  failed, neglected and refused to publish the 3rd Quarter Budget Implementation Report which in accordance with section 30 the Fiscal Responsibility Act is due within 30 days of the end of the 3rd Quarter. The most recent and available Budget Implementation Report  is that of the 2nd Quarter of 2010 which shows a release of N404.819 billion as released and cash backed whilst N124,789billion has been accessed and utilized by MDAs.   

The depletion of the Excess Crude Account (ECA) without concrete improvements in the living conditions of Nigerians questions the prudence of the administration.

From an all time high of over $20billion in 2007, to an all time low of about $1billion does not show sound economic management. Even the $5.5billion set aside for the power sector, the government should explain to Nigerians how that money has translated into increased megawatts of electricity to the national grid which is wheeled into our homes, offices and factories. Most of the withdrawals were made in contravention of the Fiscal Responsibility Act

considering that they were done when the reference commodity price did not fall below the predetermined level for three consecutive months and there was no agreement between the federal and state government to appropriate and channel the withdrawals to capital projects

Also the continued 100% drawdown of overheads as stated by the government when the capital budget is barely implemented raises the question of appropriateness of the expenditure of these funds. These overheads are part of the sums needed to run the administration and facilitate the implementation of the capital components of the budget. There is something fundamentally wrong in paying salaries and drawing down overheads when the capital budget is treated with levity.

To compound matters for the economy, despite the extant combined foreign and local debts of $32.5billion, the administration still has an external loan request of $3.7billion pending before the National Assembly in the 2010 External

Borrowing Plan. It also has a request in the 2011-2013 Medium Term Expenditure Framework (MTEF) pending before the National Assembly for the approval of domestic borrowing in the sum of N1,815.60billion for the year  2011.  The sum of N1,815.60 in the MTEF for 2011 will amount to about $12.1 billion at the rate of N150 to 1USD. If the administration should have its way, Nigeria’s debts would be no less than $48.3billion before the elections in 2011!

This debt situation calls for caution considering Communique No.73 of the Meeting of the Monetary Policy Committee of the Central Bank of Nigeria held November 22-23 2010 which states inter alia under the heading “Monetary Credit and Financial Market Development” that:

Available data showed that in October 2010, aggregate domestic credit (net) grew by 19.69% over the December 2009 level, and by 23.63% when annualized. Credit to government (net) which grew substantially by 53.35 percent over end December 2009 (or 64.02 percent on annualized basis) was the major source of expansion in aggregate credit. Credit to the private sector grew marginally by 3.22 percent (or 3.68 percent on an annualized basis).

Essentially, government borrowing is virtually crowding out access to credit by the private sector. Without access to credit by the private sector, the realization of Vision 202020 and other development targets will not be possible. 

The Jonathan administration according to the MTEF 2011-2013 has led Nigeria into a budget deficit of -6.06% of the GDP and plans a deficit of -5.75% of the GDP in 2011 contrary to the provisions of section 12 of the Fiscal Responsibility Act on aggregate expenditure ceiling. The 3% rule can only be exceeded if in the opinion of the President, there is a clear and present threat to national security or sovereignty of the Federal Republic of Nigeria or it may be exceeded if the National Assembly determines any other percentage as sustainable. Empirical evidence shows that the administration had last year presented a budget containing deficits far in excess of the 3% rule.Finally to state that the economy should not be the subject of political discourse is a display of ignorance. The undulating fortunes of the Republican and Democratic parties in America have been based on the performance of the American economy. President Obama was elected on his superior economic reform agenda whilst the loss of a large number of Congressional seats in the mid-term elections was premised on the slow rate of economic recovery particularly in creating new jobs and cutting down the deficit.