Editorial

Making 2022 Budget Work

Published

4 years ago

October 20, 2021

In recent times, the Federal Government’s unrestrained penchant for domestic and foreign loans has been variously criticised as unhealthy for Nigeria’s economy. Many economic experts have particularly expressed worries over Nigeria’s rising debt profile especially debt service-to-revenue ratio as well as foreign exchange liquidity constraints. These worries were recently exacerbated by the resolve of the Federal Government to borrow N5.01 trillion to finance the 2022 proposed budget.
While presenting the 2022 Appropriation Bill of N16.39 trillion to the joint session of the National Assembly, penultimate Thursday, President Muhammadu Buhari had said that the 2022 budget would be financed by borrowing to the tune of N5.01 trillion. The 2022 budget proposal contains capital expenditure of N4.89 trillion, a non-debt recurrent expenditure of N6.83 trillion, personnel cost of N4.11 trillion and debt service of N3.61 trillion.
The total federally distributable revenue is estimated at N12.72 trillion in 2022 while total revenue available to fund the 2022 budget is estimated at N10.13 trillion. This includes Grants and Aid of N63.38 billion, as well as the revenues of 63 Government-Owned Enterprises (GOEs). This shows that the 2022 budget has a deficit of about N6.25 trillion, approximately 3.39 per cent of GDP. This is slightly above the 3 per cent ceiling set by the Fiscal Responsibility Act 2007 (FRA). A budget deficit occurs when expenditure exceeds revenue.
While we agree with the President that the huge expenditure budget may be compelled by the need to overcome current security challenges and accelerate post-recession growth, we are concerned that the Federal Government’s resort to borrowing to finance the 2022 fiscal gaps is not good enough for the nation’s economy that is already suffocating under the huge burden of foreign loans.
We say this because Nigeria’s budget deficit has risen to N20.64 trillion. Data from the budget office, covering 2016 to 2020 show that more than N7.97 trillion was borrowed from foreign and domestic sources to fund the budget deficits. This, to us, is not healthy for our economy.
Although the President and some economic experts are quick to say that the debt level of the Federal Government is still within sustainable limits, and that the borrowings are tied to some specific critical development projects and programmes, we are worried that the continuous running of the nation’s economy on budget deficit is capable of mortgaging the future of the country.
It is, therefore, imperative that the Federal Government devises various means of improving the revenue profile of the country. While some of the revenue generating initiatives contained in the 2022 budget are commendable, a key focus area may be to explore avenues to diversify export revenue sources away from crude oil, which currently accounts for more than 80 per cent of total foreign exchange receipt.
Concerted and coordinated efforts are also required to improve the policy environment and address insecurity to boost domestic investment and attract foreign direct investments. The government also needs to ensure speedy ratification and strategic implementation of the Africa Continental Free Trade Agreement (AfCFTA) to position Nigeria as a choice investment destination in Africa.
Meanwhile, it is expected that a robust implementation of the Petroleum Industry Act (PIA) would promote investment in the oil and gas sector, stimulate economic growth and sustainability. Also important is the need to widen the nation’s tax net to accommodate more taxable Nigerians. Here, we recommend the resuscitation of toll gates on federal highways to shore up the revenue profile of the government.
It is also incumbent upon the three tiers of government to be guided by the recent revelations by the Chairman, Federal Inland Revenue Service, Muhammad Nami, that despite having 41 million taxpayers in the country, compared to South Africa’s four million taxpayers, Nigeria earned far lower than what South Africa generated from Personal Income Tax.
The FIRS boss said, “Our total taxpayers today are in the region of about 41 million people and the total Personal Income Tax paid last year was less than N1trillion by 40 million people. If you also compare that with South Africa where they have a total population of about 60 million people, with just four million taxpayers, the total Personal Income Tax paid in South Africa last year is about N13trillion. You can now see that these things are not adding up.
“The number of billionaires in Lagos alone are more than the number of billionaires in the whole of South Africa but yet, what we generated as Personal Income Tax by Lagos State Government is just less than N400billion”. Nami’s revelation might just be another eye opener for the government at all levels that Nigeria has enough wealth to finance its budget and sustain its economy without borrowing.
With the nation’s over-reliance on crude oil income to fund the budget, the government may be stretching itself too far in producing enough revenues to fund essential projects. And with the growing borrowing, the future of the country is dreary. We need more investments in the non-oil sectors of the economy.
For the economy to progress and achieve greater significant growth, a reasonable level of budget execution is necessary. But if the government continues to violate existing debt laws, the 2022 budget may go through the disastrous fate of previous budgets. Also, there is a need for migration of businesses from the informal to the formal sector of the economy for easy inclusion in the tax net.
Beyond this, the government must fight against insecurity throughout the country, which hinders local and foreign investment and stabilise the exchange rate policy regime. Let it reduce unemployment and inflation rates. It should spend less on consumption and more on productive sectors of the economy.

Editorial

No To Political Office Holders’ Salary Hike

Published

3 days ago

September 22, 2025

Uchechukwu Okwum

Nigeria’s Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has unveiled a gratuitous proposal to increase the salaries of political and public office holders in the country. This plan seeks to fatten the pay packets of the president, vice-president, governors, deputy governors, and members of the National and State Assemblies. At a time when the nation is struggling to steady its economy, the suggestion that political leaders should be rewarded with more money is not only misplaced but insulting to the sensibilities of the ordinary Nigerian.

What makes the proposal even more opprobrious is the dire economic condition under which citizens currently live. The cost of living crisis has worsened, inflation has eroded the purchasing power of workers, and the naira continues to tumble against foreign currencies. The majority of Nigerians are living hand to mouth, with many unable to afford basic foodstuffs, medical care, and education. Against this backdrop, political office holders, who already enjoy obscene allowances, perks, and privileges, should not even contemplate a salary increase.

It is, therefore, not surprising that the Socio-Economic Rights and Accountability Project (SERAP) has stepped in to challenge this development. SERAP has filed a lawsuit against the RMAFC to halt the implementation of this salary increment. This resolute move represents a voice of reason and accountability at a time when public anger against political insensitivity is palpable. The group is rightly insisting that the law must serve as a bulwark against impunity.

According to a statement issued by SERAP’s Deputy Director, Kolawole Oluwadare, the commission has been dragged before the Federal High Court in Abuja. Although a hearing date remains unconfirmed, the momentous step of seeking judicial redress reflects a determination to hold those in power accountable. SERAP has once again positioned itself as a guardian of public interest by challenging an elite-centric policy.

The case, registered as suit number FHC/ABJ/CS/1834/2025, specifically asks the court to determine “whether RMAFC’s proposed salary hike for the president, vice-president, governors and their deputies, and lawmakers in Nigeria is not unlawful, unconstitutional and inconsistent with the rule of law.” This formidable question goes to the very heart of democratic governance: can those entrusted with public resources decide their own pay rises without violating the constitution and moral order?

In its pleadings, SERAP argues that the proposed hike runs foul of both the 1999 Nigerian Constitution and the RMAFC Act. By seeking a judicial declaration that such a move is unlawful, unconstitutional, and inconsistent with the rule of law, the group has placed a spotlight on the tension between self-serving leadership and constitutionalism. To trivialise such an issue would be harum-scarum, for the constitution remains the supreme authority guiding governance.

We wholeheartedly commend SERAP for standing firm, while we roundly condemn RMAFC’s selfish proposal. Political office should never be an avenue for financial aggrandisement. Since our leaders often pontificate sacrifice to citizens, urging them to tighten their belts in the face of economic turbulence, the same leaders must embody sacrifice themselves. Anything short of this amounts to double standards and betrayal of trust.

The Nigerian economy is not buoyant enough to shoulder the additional cost of a salary increase for political leaders. Already, lawmakers and executives enjoy allowances that are grossly disproportionate to the national average income. These earnings are sufficient not only for their needs but also their unchecked greed. To even consider further increments under present circumstances is egregious, a slap in the face of ordinary workers whose minimum wage remains grossly insufficient.

Resources earmarked for such frivolities should instead be channelled towards alleviating the suffering of citizens and improving the nation’s productive capacity. According to United Nations statistics, about 62.9 per cent of Nigerians were living in multidimensional poverty in 2021, compared to 53.7 per cent in 2017. Similarly, nearly 30.9 per cent of the population lives below the international poverty line of US$2.15 per day. These figures paint a stark picture: Nigeria is a poor country by all measurable standards, and any extra naira diverted to elite pockets deepens this misery.

Besides, the timing of this proposal could not be more inappropriate. At a period when unemployment is soaring, inflation is crippling households, and insecurity continues to devastate communities, the RMAFC has chosen to pursue elite enrichment. It is widely known that Nigeria’s economy is in a parlous state, and public resources should be conserved and wisely invested. Political leaders must show prudence, not profligacy.

Another critical dimension is the national debt profile. According to the Debt Management Office, Nigeria’s total public debt as of March 2025 stood at a staggering N149.39 trillion. External debt obligations also remain heavy, with about US$43 billion outstanding by September 2024. In such a climate of debt-servicing and borrowing to fund budgets, it is irresponsible for political leaders to even table the idea of inflating their salaries further. Debt repayment, not self-reward, should occupy their minds.

This ignoble proposal is insensitive, unnecessary, and profoundly reckless. It should be discarded without further delay. Public office is a trust, not an entitlement to wealth accumulation. Nigerians deserve leaders who will share in their suffering, lead by example, and prioritise the common good over self-indulgence. Anything less represents betrayal of the social contract and undermines the fragile democracy we are striving to build.

Editorial

No To Political Office Holders’ Salary Hike

Published

3 days ago

September 22, 2025

The Tide

Editorial

Rivers’ Retirees: Matters Arising

Published

3 weeks ago

September 8, 2025

The Tide

The Rivers State Government deserves commendation for the manner in which it conducted the last biometric exercise for pensioners in the state. For the first time in many years, the verification process was not only efficient but also humane, a development that has brought relief to a category of citizens that often bears the brunt of neglect.

Unlike previous verification exercises that left pensioners exhausted and unattended, the latest exercise set a refreshing precedent. Retirees were given proper and sumptuous meals, and in addition, the government paid the sum of N10,000 into their accounts to cushion their transportation costs. Such gestures go a long way in demonstrating that those who had laboured for the state are not forgotten in their twilight years.

The measure was particularly necessary given that some pensioners had to travel long distances to reach their verification centres. For elderly men and women, such journeys come with physical and financial strain. By recognising these realities and easing the burden, the government has shown that pensioners deserve dignity, not disdain.

Beyond this laudable act of consideration, the authorities must reflect on the very structure of pension verification. The era of compelling retirees to be physically present for routine verification should be reconsidered. With digital tools and innovation, the government can adopt systems that capture and confirm data without the stress of physical assembly. This is crucial for pensioners residing in other states or even abroad.

While we acknowledge the importance of verification in cleaning up pension records, we cannot ignore the darker side of the matter. It is regrettable that some allowances continue to be paid to deceased pensioners, with relatives fraudulently collecting the funds. The latest biometrics, thankfully, exposed some of these sharp practices. The exercise, therefore, is not only about order but also about justice.

We urge families of deceased pensioners to be patriotic enough to inform the government of the deaths of their loved ones. It is deeply shameful that in some instances, individuals attempted to impersonate late pensioners during the biometrics. Such behaviour undermines the spirit of honesty and deprives genuine retirees of their due entitlements.

The exercise also revealed another important area of concern: the health of pensioners. It is reassuring to learn that the state government has reportedly promised to take over the medical treatment of some retirees who arrived for the biometrics in critical condition. This is a step in the right direction. Elderly citizens, after years of service, should have access to special health care facilities in the state. Setting aside hospitals or designated centres for the aged is not just desirable but necessary.

While pension payments in Rivers State have remained consistent, attention must now be directed towards gratuities. Senior citizens deserve to receive their retirement benefits without the bureaucratic hitches that have often marred the process. After years of loyal service, nothing is more demoralising than to see retirees languish for want of their gratuities. Every worker, as Scripture reminds us, is worthy of his wage.

Retirement, in any civilised society, should not be reduced to a sentence of suffering. In dealing with pensioners, government must consistently wear a human face. The humane manner displayed during this verification exercise should not be a one-off. It must become the norm in all dealings with retirees. Measures must continually be put in place to ensure that they do not feel abandoned by the state they served.

One welcome innovation has already been introduced. The Sole Administrator of Rivers State, Vice Admiral (Rtd) Ibok-Ete Ekwe Ibas, has altered the method of gratuity payment. Pensioners now receive their monies directly into their bank accounts, eliminating the cheque-based system that for years served as fertile ground for corruption. This reform is both pragmatic and forward-looking. Similarly, the implementation of the N32,000 pension harmonisation is also commendable.

Direct payments gratuities ensure transparency and drastically reduce the possibility of diversion of funds. More importantly, they restore confidence in the system and assure pensioners that their entitlements will reach them without interference. In this way, the government has not only safeguarded the process but also upheld the principle of accountability.

Seamless gratuity payment has a ripple effect on the workforce as a whole. When workers are confident that retirement will not plunge them into hardship, the temptation to falsify age in order to remain in service is eliminated. Such reforms, therefore, enhance efficiency, honesty, and productivity in the public service.

In sum, the Rivers State Government has struck a refreshing chord in its handling of pension verification. It has shown empathy, innovation, and accountability. However, the momentum must be sustained, and the focus must shift towards modernising verification methods and prioritising retirees’ welfare in health, gratuity, and dignity.

When retirees are treated with compassion and fairness, the message to those still in service is clear: faithful service to the state will not go unrewarded. The humane verification exercise, though a single event, offers a hopeful glimpse of what governance can look like when people, especially the elderly, are placed at the heart of policy.