• To acquire fighter jets, ammunition, budgets N1bn for terrorists’ prosecution
As the battle against insecurity continues, the Federal Government has earmarked N1.35tn to prosecute the ongoing anti-insurgency fight in the country.
This was contained in the N20.51tn 2023 budget proposal presented to the National Assembly by the President, Major General Muhammadu Buhari (retd.), on Friday.
Findings by The PUNCH on Sunday indicate that out of this N1.35tn, the Ministry of Defence and the Armed Forces have been allocated over N1.248tn to fight Boko Haram, bandits and other anti-insurgency wars in the 2023 Appropriation Bill.
Out of this amount, personnel expenditure will gulp over N1tn; overhead cost, N90.961bn; and capital expenditure, N156.294bn.
Of the 18 military and defence agencies allocated the total sum, the Nigerian Army, Nigerian Air Force and the Nigerian Navy will get N638.1b, N174.4bn and N158.7bn, respectively. The three forces got the largest chunk of the record military budget.
Out of the Nigerian Army’s N638.1bn budget, N581bn is for payment of salaries of personnel, N24.6bn was allocated for overhead and N32.3bn for capital.
The Nigerian Air Force on the other hand allocated N108. 3bn for personnel cost, N15.4bn for overhead and N50.6bn for capital projects.
For the Nigerian Navy, N113.7bn will go to personnel cost, N19.7bn to overhead and N25.3bn for capital.
The Defence Headquarters has a budget of N84.7bn, out of which N80.086bn is for personnel, N2.1bn for overhead and N2.4bn for capital.
Ministry of Defence headquarters was allocated N32. 7bn, including N15.052bn for personnel cost, N2.2bn for overhead cost and N15.4bn for capital.
Prominent among the capital projects of the Nigerian Army are arms and ammunition, including the purchase of three units of Magnus MF 212 surveillance attack aircraft at N2.7bn and three units of Bell UH 1D helicopter at N3,082,500,000.
The Nigerian Air Force, which is also acquiring arms and ammunition budgeted N2,099,016,682 for ‘balance payment for procurement of two AW109 Trekker helicopters; another N1,257,660,000 for ‘balance payment for periodic depot maintenance of three L-39ZA aircraft and another N27,302,804,065 for ‘additional payment for procurement of six T-129 attack helicopters.’
NAF also plans to overhaul six Larzac engines of its Alpha Jet aircraft fleet at the cost of N346,273,056.
The Nigerian Navy is to procure Ocea3X32 fast patrol boats, six special forces boats, six RHIBs, three fuel cleaning stations and four years of integrated logistics support for N9,163,226,200.
Meanwhile, the Ministry of Defence headquarters plans to spend N7m on a new project titled ‘Provision of Tablets (10nos) to Press Officers for 24 hours news monitoring, news gathering and information dissemination to media houses, FGN, Etc.’ Quarterly publication of the MOD newsletter will also gulp N20m.
While the ‘Safe School Intervention’ will cost N2.2b in 2023, the ministry plans to spend N9,501,070 on ‘Freedom of Information.’
While addressing the National Assembly during the budget presentation ceremony, Buhari stated that the government remained “firmly committed” to the security of life, property and investment across the country.
The President noted that defence and internal security continue to be accorded “top priority in 2023.” He added that current efforts to properly equip and motivate the nation’s valiant personnel in the Armed Forces, police and paramilitary units will be sustained.
He said, “I assure you, insecurity, especially banditry and kidnapping, will be significantly curtailed before the end of this administration. We will redouble our efforts to ensure we leave a legacy of a peaceful, prosperous and secure nation.”
Meanwhile, the Economic and Financial Crimes Commission is to build an academy at the cost of N2bn.
Item ERGP15195485 under EFCC’s proposed budget is titled ‘Construction of New EFCC Academy.’
N1bn for prosecution
Similarly, the sum of N1,096,456,345 has been appropriated for the prosecution of Boko Haram and terrorism-related cases in 2023, an analysis of the 2023 appropriation budget by The PUNCH has revealed.
The figure is contained in the breakdown of the 2023 budget of the Ministry of Justice.
Described as a “new” project in the budget, the allocation is to be expended on fresh terrorism and other criminal cases filed in court by the ministry.
Though the ministry did not indicate the number of suspects, our correspondent observed that the ministry allocated N500m for the prosecution of Boko Haram suspects in 2022.
The Minister of Justice, Abubakar Malami in January this year noted that the government would commence the trial of terror suspects and Boko Haram financiers. However, nothing has been heard about this.
The spokesperson of the minister, Umaru Gwandu did not reply to texts and calls from our correspondent when asked for updates about the planned trials.
The PUNCH reports that the federal ministry of justice has an arrangement with the Federal High Court that enables judges to be deployed to try terrorist suspects at the various military detention facilities holding the suspects in different parts of the country.
Under the arrangement, the logistical and security challenges of moving a large number of terror suspects to face trial at the Federal High Court in Abuja or other divisions of the court, are minimized, but there have been local and international concerns about the fairness and thoroughness of the process.
Three phases of the mass trial have been held so far. Amnesty International had serially reported deaths of Boko Haram suspects in military detention facilities, as they swell in number over the years without trial.
In December 2020, the human rights organisation claimed that over 10,000 detainees had died in detention since 2011, a charge the Nigerian Army denied.
Of the thousands of detained Boko Haram suspects, only 800 of them were being prepared for trial as of May 2021, according to an official.
Shedding more light on the cases in 2021, a Deputy Director at the justice ministry, Chioma Onuegbu said the 800 suspects were among about 1,000 terrorism suspects whose case files were analysed by prosecutors in her team.
According to her, out of the 1,000 case files that were reviewed in 2019, 800 had prima facie evidence with which to proceed to trial, while 170 lacked evidence and the suspects were recommended for release.
Onuegbu added that charges had been filed at the Federal High Court in 280 of the 800 cases. The charges had been served on the Legal Aid Council of Nigeria, which defends the suspected terrorists, the prosecutor explained further.
However, a human rights lawyer, Victor Giwa has called on the Minister of Justice and Attorney-General of the Federation, Abubakar Malami to make known the Boko Haram and terror suspects who have been arrested and undergoing trial.
Speaking in an interview with our correspondent in Abuja, he said, “The Attorney-General should be able to provide Nigerians with the information; we don’t need so much details, we just want to establish the identity of members of Boko Haram who are either arrested are on trial.’’
Debt, personnel costs
Meanwhile, debt servicing and personnel costs will take a huge chunk of the 2023 budget presented to the National Assembly by the President, Major General Muhammadu Buhari (retd.), on Friday.
Findings by The PUNCH indicate that 55.1 per cent of the budget will be spent on debt servicing and personnel costs, raising concerns about the funding of critical infrastructure and other ongoing capital projects.
Buhari presented a budget of N20.51tn on Friday and said the Federal Government would spend N6.31tn on debt service in 2023.
This means that debt servicing alone will gulp 30.77 per cent of the budget in 2023.
The budget breakdown also indicated that personnel cost would consume N4.99tn; representing 24.33 per cent of the N20.51tn budget.
The PUNCH observed that the personnel cost has been on a steady increase since 2017. The personnel cost was N1.69tn in 2016. In 2017, it rose to N2.90tn, representing an increase of N1.21tn or 71.60 per cent.
In 2018, the personnel cost rose by N7bn or 2.41 per cent, with personnel costs gulping N2.97tn.
The following year, the personnel cost reduced by N68bn, dropping to N2.29tn. However, the budget rose again in 2020 to N3.05tn, representing an increase of N760bn or 33.19 per cent.
In 2021, the cost continued to soar as N3.75tn was budgeted for personnel costs, representing an increase of N7bn or 22.95 per cent. In the 2022 budget, the personnel cost hit an all-time high of N4.11tn, representing an increase of N360bn.
In the 2023 budget, the figures showed that debt service and personnel costs would take a total of N11.3tn in the 2023 fiscal year, which represents 55.1 per cent of the Federal Government’s appropriation for next year.
Debt servicing has the largest share after the allocation for recurrent non-debt of N8.27tn, which gulps 40.32 per cent of the 2022 budget.
Economic experts and multilateral agencies have consistently warned the Federal Government about the rising cost of debt service.
The International Monetary Fund had warned that debt servicing might gulp 100 per cent of the Federal Government’s revenue by 2026 if the government fails to implement adequate measures to improve revenue generation.
The IMF’s Resident Representative for Nigeria, Ari Aisen, disclosed this while presenting the Sub-Saharan Africa Regional Economic Outlook report in Abuja.
Experts react
A market analyst, Ike Ibeabuchi, recently suggested that Nigeria must pay more attention to cost-cutting measures such as reducing the earnings of the legislature, adding that the country should look at ways of tapping equity rather than debt.
The Chief Executive Officer of SD&D Capital Management, Idakolo Gbolade, described Nigeria’s debt service-to-revenue ratio as abysmal.
“The issue of not having a debt problem can be ascertained because they are using the debt to GDP benchmark. But our debt service-to-revenue is abysmal,” he stated.
According to him, the rate of borrowing was unsustainable and there was a need for the government to make necessary adjustments before the country got into a debt trap.
The Chief Executive, Centre for the Promotion of Private Enterprises, Dr Muda Yusuf, said the N20.51tn budget had a revenue projection of N9.73tn, which clearly showed that the Federal Government had prepared a deficit budget.
“This is a deficit of N10.78tn. In all probability, the deficit will be much bigger by year-end because of the track record of revenue under-performance over the last couple of years.
“We are also likely to see an acceleration of Central Bank of Nigeria financing of fiscal deficit given the revenue performance trajectory. The public debt stock is growing and is currently at N42tn. With additional new borrowing of N8.8tn, the debt profile will be inching close to N50tn by May next year.
“If we take into account the borrowing from the CBN (ways and means), which is currently about N20tn, we will have a total debt of N70tn by end of 2023. This should be a cause for concern,’’ he stated.
More experts speak
The Chairman of the Advisory Council of the South-South Chamber of Commerce, Billy Gillis-Harry, told our correspondent that the 2023 budget was not realistic, as the government was not even sure of where it would generate income.
He said, “We are in a country that is budgeting money for debt service when we are not even certain where the source of the money would come from. We have resorted to borrowing to pay debts. So, where is the country going?
“We need to look at our budget realistically. Now that we are trying to close the loopholes in oil production, would it not have been better for us to focus on budgeting to improve our infrastructure, human capital development and job creation?
“As far as I’m concerned, that N20.5tn budget is a phantom budget. Yes, of course, the budget is an estimation but you would want to estimate realistically. I will not call this a budget of hope. Are we expecting that when the next President comes, he will present a realistic budget?”
A development economist, Dr Aliyu Ilias, described the budget as being problematic due to the huge cost of debt service and the revenue shortfall of the government.
He said, “Nigeria’s budget is having a serious crisis. Debt service is taking the majority of our budget. That is not even the major problem.
“The major problem is that our revenue is not even enough to service debt. Looking at this now, it means Nigerians are going to suffer more.”
A former President of the Association of National Accountants of Nigeria, Dr Sam Nzekwe, said the projected N8.8tn to be borrowed to fund the budget deficit was too high and wondered when the government would start cutting down on its excessive borrowings.
He said, “I’m concerned about the deficit and how the government intends to finance it. This is because before now, the amount used in servicing debts had been eating deep into our budgets.
Also, the Lagos Chamber of Commerce and Industry stated in a statement on Sunday that the overall spending proposal of N20.51tn had reduced to a non-debt spending proposal of N14.21tn once you deduct the proposed N6.3tn interest payments from the overall spending plan.
“So, we do not have a N20.51tn spending plan on the table. We only have a N14.21tn spending plan. It must also be observed that the proposed revenue of N9.73tn does not reflect our peak revenue performance of N6tn in 2021.