Thursday, 2 July 2015

Buhari Social Program: Laudable, Laughable Or Dead On Arrival Part I By Solomon Tonye aka Barcanista

1.       Buhari/APC To Pay 25m Unemployed N5000 Per Month
Cost Implication:

The implication here is that the sum of N125billion (ie 25million * N5000) will be spent to service this policy every month, and an estimated N1.5 trillion (ie N125bn * 12 months) will be spent on this policy alone every year.

2. Buhari/APC To Provide Daily Meal for Primary School pupils.
First, the FG has no business with the running of Primary schools. This is the responsibility of States and Local Government. However, Buhari's administration pledged to provide at least one meal per day for Primary school Children, we shall hold him accountable.
Cost Implication:
Osun State reportedly spent N3.2billion in 2014 for the feeding of 300,000 primary 1 to 4 pupils in the state. The Osun state program exclude pupils in Primary 5 and 6. If we are to break it per pupil, we will have N10,667 per pupil(ie 3.2b/300k). Considering that over 35million children are estimated to be enrolled in Primary school across the country, at least the sum of THREE HUNDRED AND SEVENTY THREEE BILLION (N373b) is estimated to be spent on the program annually(ie 35m * 10,667).

Gross Annual Estimated Cost For Both Programs
N1.5trn + N373b = N1.873trn

That means Buhari is to increase our Recurrent Expenditure by N1.83trn.

How Feasible Are These Programs?
Let us take a look at the key component of the 2015 Budget(as adjusted by the Senate).
Total Budget Stand at N4.3trn.
Recurrent Expenditure: N2.58 trillion
Capital Expenditure: N700 billion

From where will Buhari See N1.8trn To Service His Social Programs?
- Remove Subsidy? If he's thinking of scrapping fuel subsidy, the adjusted allocation for petrol subsidy in 2015 budget is N100billion. The adjusted allocation for SURE-P is N21b, while the subsidy for kerosene for 2015 was adjusted to N45.5b. This gives a total of N166.5b.
Even if he should scrap SURE-P and remove the petrol and kerosene subsidy, he still won't be able to get 1% of the N1.8trn.

- Spend All Capital Expenditure + Subsidy? Even if Buhari is to spend all our N700b Capital Expenditure on his Social program in addition to the N166.5billion subsidy funds, it still won't be enough as it will fall short of One Trillion Naira.
N700b + N166.5b= N866 billion

- Money Appropriated To NASS? The total budget for the National Assembly for 2015 is N115b. Even if Buhari is to spend this money + subsidy allocation + Capital Expenditure to fund his program, he won't be able to raise the required fund. As all appropriation combined stand at N981billion(ie N700b + N115b + N166b)

So How Does Buhari intend to raise N1.873trillion to fulfil this social welfare pledge? Does this mean the administration has failed even before starting? Dead on arrival?

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