2014 Budget: Checking Output Disruptions

Within the realms of governance, as
applicable in normal human affairs, a
problem identified is believed to be one half-solved. The optimism built around the second half is rooted in the expectation that appropriate attempts will be made to seek solutions to address any such human challenges.
Nowhere is the need to address problems identified in a timely fashion more paramount and imperative as it is with public administration in the management of human and material resources. This is why governments all over the world devote ample time and resources for proper research at the planning and budgeting stages of their intended fiscal spending.
It is also for this reason that the collation of projects for budgeting should be the result of proper study of problems of the preceding fiscal calendar, solutions found to address existing bottlenecks and most importantly provide a necessary framework for proper execution of budgetary projections.
Apparently, such vigorous procedure unveiled the threat which oil theft posed to the economy. It was found that there was disturbing decline in the country’s foreign exchange earnings, on account of dwindling production capacity of oil, said to be actuated by many variables, chief among which are near frequent vandalisation of petroleum product pipelines and indeed theft by trans-national syndicates:. That was about two years ago.
So frightening, it was, that  budgetary projections could not be backed by required allocation, just as projected production levels fell to frightening degrees. To make-up for such pitfalls, economic planners resorted to tampering with excess crude reserves, with the attendant states’ and federal government bickering over resource allocations observed in the breach.
That the same complaints would be  made during the running 2013 fiscal Budget was not contemplated since relevant government agencies had assured Nigerians of frantic efforts to address the problem that was identified to be caused by oil theft. Expectations were that necessary safe-guards should have been made to avoid a any repeat of the hiccup of the previous fiscal calendar.
Among such largely reported plans were, equipping the Navy and other security agencies for better sea border policing and protection of petroleum production facilities, improved surveillance of petroleum pipelines as well as vigorous efforts at checking illegal bunkering in the Niger Delta.
This is why many are worried at the recent alarm raised by the Finance and Supervising Minister of the Economy, Dr. Ngozi Okonjo-Iweala to the effect that the Federal Government would draw-down its oil savings in Excess Crude Account (ECA) in order to compensate for yet another drop in revenue. That, she explained, was to keep the budget deficit under control.
The reported shortfall according to the Finance Minister, was due to yet another output disruptions amounting to about $12 billion.
At the beginning of the 2013 fiscal year, Nigeria had $9 billion in the ECA with the same budget based on an oil price of $79 per barrel, and at a daily output of 2.53 million barrels, Nigerians expected foreign exchange earnings in excess of $80 billion in exports. And with oil prices stabilising reasonably for a long period, at well above $100, the reported shortfall is indeed counter-productive. And at best, avoidable.
This is because, whatever the output disruptions were in the past, The Tide believes that they would have been addressed, since the problem was highlighted in the 2012 budget and for which proactive steps were contemplated to ensure a successful 2013 Budget.
The Tide is worried that consistently falling back on the ECA on account of failure of relevant security agencies to deliver on their constitutional responsibilities of protecting key national assets can only affect the prospects  of the Sovereign National Fund, which has reasonably contributed, in part, to the relative stability of the Naira against other foreign currencies.
Therefore, as President Jonathan prepares to present the 2014 Fiscal projections to the National Assembly, next week, Nigerians expect elaborate account of how output disruptions would be checked and if possible avoided. At a time of repeated claims by economic planners of a healthy economy, such disruptions depict lack of seriousness in tackling a problem, long identified and therefore, should have been easier solved.
The Federal Government must therefore fight and win the  war against oil theft now or tell Nigerians, it cannot be done.