 The President's Mohammad Buhari has presented the proposed 19.76 trillion-dollar budget for the 2023 financial year. Now the budget which was presented by the President is the last he will present before his tenure elapses, and it is a 15.37% increase from the amount budgeted in 2022. According to the President, this eight budget is tacked by the budget of fiscal sustainability in transition. Buhari, while addressing members of the parliament, noted that the 2023 transition budget was designed to address critical issues and lay a solid foundation for the incoming administration. Also on the show, we'll be looking at the state of the economy in the wake of the nation's 62nd independence. Welcome to Business Insight and Plus TV Africa. I am Justin Akadoni. Welcome back. First off, the Manufacturers Association of Nigeria MAN has called on government to take a holistic approach against the biting effect of multiple taxation and bad policies affecting its members. President of Manmansur Ahmad, media pilewa brief in Lisbon, ahead of its 50th annual general meeting. The outgoing president of the Manufacturers Association of Nigeria, engineer Mansur Ahmad, addresses what we expect at the meeting. Without reservation, he expresses bottlenecks affecting members in the sector. He says manufacturers are still overburdened with numerous demands from various teams of government in forms of taxes, levies, fees and permits among others. In addition, he says companies in the sector are confronted daily with multiple regulations and excessive drive for revenue generation by government agencies. It is indeed a matter of great concern to our members that even as our economy continues to experience very slow growth, our policymakers at all levels continue to compound the situation. In some clients, when the economy slows down, government actually addresses by reducing taxes to encourage businesses to expand, create more jobs and increase economic activities. That's indeed creating more revenue, even for government. However, it is not all gloomy. Engineer Ahmad says MAN has benefited significantly in its relationship with the CBN. Through positive engagement by ensuring that regulations made by the Apex Bank do not have adverse impact on local manufacturers. We have engaged and tried to engage the central bank of Nigeria with a view to ensuring that the monetary policies and the monetary regulations that are applied by the central bank have taken account of the potential impact on the manufacturing sector and the economy generally and have been modulated to minimize negative impact on the industry. We at MAN engaged the CBN very vigorously, very vigorously, to ensure that window was closed. And I think this is a major success. Now, unfortunately, the impact was significantly undermined. On the regional level, MAN expects trade liberation to happen with the African continent of trade agreement. The theme for the 50th AGM is that an agenda for Nigeria's industrialization for the next decade. To sustain and institutionalize the gains of these reforms, to this end, I have directed the Minister of Finance, budget and national planning to immediately work on mainstreaming these reforms and work with the National Assembly on passing an organic budget law, which I hope to ascend to before the end of this administration. The government notes with dismay the crisis that has paralyzed activities in the public universities in the country. We expect the staff of these institutions to show a better appreciation of the current state of affairs in the country. We are once more reminded of the Phoenix nature of public service and the obligation to make the most of our time to deliver on our promises to the Nigerian people. It is often said that it is not how well you start, but how strong you finish. We intend here in the Ninth Assembly to finish very strong. I assure you the National Assembly will prioritize this bill and ensure it is passed before the end of the year as is the practice of the Ninth Assembly. A welcome back now to the discussion of the day. The President announced that the 2023 to 2025 medium-term expenditure framework and fiscal strategy paper sets out their parameters for the 2023 budget as follows with our price benchmark of 70 US dollars per borough, daily our production estimate of 1.69 million boroughs per day among others. We have an economist now, Gospel Belly, joining us to look at all of this and make some sense to it. Thanks for joining us on Business Insights, Gospel. Thank you for having me, Jay. Good afternoon. Yes, it is indeed a pleasure. So the President presented the budget to the joint session of the National Assembly with some figures. Let me just get your reaction concerning all of that. A total expenditure of 20.51 trillion naira is being proposed for 2023. How do you react to that particular figure? I'm not surprised, basically. And also it's important to note that if Nigeria must really grow and develop as a nation and unlock its potential, the potential of its people with resources and the nation, it needs bigger budget spending. We need to spend our way into strong development prospects. And that's also to state that even the brand Apple is valued almost as 70 trillion naira. That is almost times three of the Nigerian budgets to start with. So there is nothing wrong about the figure. We are still getting there in terms of expanding our frontiers towards growth and development. So it's a good one, basically. All right. Let's just get into some of the figures proper, the breakdown for the 20.51 trillion naira for 2023. Specifically, he said them statutory transfers of 744.11 billion, non-debt recurrent cost of 8.27 trillion naira, personal cost of 4.99 trillion naira. Let's talk about the personal cost. Let's stay on that for a minute. The government is budgeting about 5 trillion naira to pay salaries for next year. How do you react? Well, despite the fact that we need larger budget sizes to expand the economy, that's just built on the assumption that these monies will spend rightly in the core investment segment that can unlock productivity for growth and development. However, we've seen that just like every other budget, the 2023 budget proposal has also maintained the status quo, very conventional in the design, to a very large extent the same structure and flow of numbers, high personal cost, which is not surprising to see. But then again, the tone tells us that the government plans to retain a high level of weight funding with this budget as usual. Then again, a lot of ghost workers and all the concerns around civil workers or public sector workers are still within the context of this budget. So we've not seen any major difference. It's a bit worrisome to see that still yet the focus and conversation is still on the revenue, on the recurring bids, on debt side is saying and there are no clear actionable plans by this budget to tailor investment into core capital projects that can help the economy grow productively. All right, Gospel, let's stay on the expenditure before we look at the revenue projection. Specifically, KPEX, that's a capital expenditure, has been projected at 5.35 trillion Naira, including the capital component and statutory transfers. But then debt service of about 6.31 trillion Naira. I don't think any Nigerians should be surprised with this, with the incident borrowing by the government. It technically means that there are also higher prospects to, there are also higher expectations when it comes to, there should be higher expectations when it comes to debt servicing, coupled with the fact that interest rates globally have been under rise. So the cost of borrowing needs to be factored within the context of this servicing. So when you put all these factors together, it validates the argument for why you have a higher debt servicing this year. However, it's not so healthy being a physical reality in the context. Because again, the debt service for this year, the deficit for this year is almost 50% the total budget size, which also calls for worry. And it means that you're spending more money servicing debts than you are allocating to capital expenditure. No country grows that way and it's not a sustainable pathway towards growth and development. So technically, we see just the status quo in maintaining of status quo and in the times that we live in, maintaining status quo is actually economic retrogression. Alright, gospel, let's talk about the revenue estimates right now. Oil price benchmark is pegged at 70 US dollars per barrel, daily oil production estimate of 1.69 billion or million barrels per day exchange rate at 435.57 narrow to the US dollars. Let's be realistic now, gospel, with all that is happening with the global economy, the energy crisis and all of that. How reasonable is our projection? Alright, Jay, one of my major concerns with the status quo, you know, status quo perspective we have towards budgetary design and all of that, is that it's retrogressive in its nature. So for instance now, everything that we've looked at in terms of metrics and all of that still tells us as the government still emphasizes the oil sector as the sole revenue provider, you know, as the so far in exchange receipt source as well. And not only the budget tells us that there are efforts to sort of like galvanize and organize the strength, you know, and potentials of the non-oil sector. That said, I think the budget is a bit more optimistic, you know, trying to be optimistic within the context of things. But we've also seen that Nigeria has not really benefited from increased oil prices recently. And that's because of the cost of transacting and exchanging oil products and services across the value chain. And that could also be traced back to the Naira conversation, the FX problem and all of that. So yes, the parameters are there, but I think probably they could have reviewed a bit lower to accommodate not just for any changes in oil prices internationally next year, but to also accommodate for possible downside effects when it comes to the value chain impact. Because dollar is on the rise right now at $700 Naira to $idola. However, the budget places are $437. But technically, you'd be surprised to hear that a lot of government agencies still need to find ways to source for the dollar. You know, so there is a major revenue crisis and I don't think some of the metrics are reflecting the reality of this revenue crisis, number one, the reality of an FX crisis and the reality of the fact that we are at the vulnerable end of the value chain when it comes to benefiting from increased international oil prices. So, but largely speaking, it's a status code design project and that's not going to take us anywhere in the last scheme of things. I want to see some much more innovative budgetary design process, but then again, status code is what really thrives in the injury at a large extent. Alright, you talked about the oil sector, which the federal government has failed to actually look and explore as it were, but the president presented it today and he mentioned the finance bill of 2022. One would have thought that that's in mind that the government will be looking at the parts of IGR from taxes instead of just solely on oil. Well, it's still a developing story, quite honestly. The assumption is that from top of mind, the government is expected to review the finance act yearly, but do not forget again that January February elections, whatever announcements are made now can impact on the outcome. So, we are clearly in the in the season of political correctness. So, we can't make any form of judgment yet. It would be nice to still leave that story developing, maybe till after the election or till the next administration comes in. Alright, I'm gospel. The federal government is thinking of ensuring fiscal sustainability by improving the business environment, but a lot of people might think otherwise, what with elections in the next three, four months, do you really think this outgoing government would actually focus on economy as opposed to getting more votes? To be very honest with you Jay, Nigeria and our political economy are not as developed as we think. Elections still determine and shape or influence everything. In fact, elections have been influencing things since 2021. Prelections also have its impact on the economy and that's part of what we are seeing with the foreign exchange crisis right now. All of these things were predicted, I predicted these things in January this year to stakeholders who really wanted to listen, but to answer your question, these elections will run through Q1 2023, to a very large extent. The presidential election is on the 25th of February, by the time it would be on the first or second week in March, something like that. So, for the first quarter of 2023 elections will be happening and that's going to be a complete waste of economic time in the context. So, when the era of political correctness and the government will only focus on what will give them the leverage or the APC government will only focus on what will give them the leverage to win the elections in the coming year. So, the events we see right now are going to shape in one way or the other the performance of the economy in 2023 being the fact that it's an election year. So, I did not expect any major reform activity, I did not expect any major strategic engagement towards this fiscal sustainability thingy. It's all jargon just in politically correct, but we all know that elections are a major driver of how the economy would run. If this year was not an election year or a pre-election year, the era may not have worsened the way it has worsened. So, elections are a major part in our economic growth and development process and it's quite unfortunate. All right, Gospel, let's end this particular session by just taking a review of the 2022 in as much as we have about two months to the end of the year. How well would you say we have done in terms of budget performance for this year 2022? Well, I think the average Nigerian on the street can answer that question because at the end of the day, whatever happens as a policy or as a government decision or as an investment, whatever happens gets to impact the average Nigerian. Having Nigerians is not better for it. Clearly, we know what the answer is. But for now, I do not think that so far so good the performance has been impressive. Nigerians are poorer than they are, than they were in January this year. Nigerians are poorer today than they were in January this year. Poverty trap is on the high, cost of living crisis is on the high. However, these things also pose new streams of opportunities within the Nigerian economy that can only be uncovered with proper insights and strategy to support. But then again, the government is not doing so much around helping stakeholders see what the opportunities are, tap into the opportunities and provide enabling environments for them to take it up to the next level. That's a major challenge. So it's quite unfortunate, but we would like to say there's light at the end of the tunnel. But sometimes there has to be some intentional effort to ensure that it happens for a critical mass of Nigerians. Are you still watching Business Insight and Plus TV Africa? Gospel Obele is still with us, but we'll take a quick break and then we'll come back with just a cursory review of Nigeria 62 and just examine just how far we have come and how far we are going economically in a moment. Stay with us. Welcome back. It's still Business Insight and Plus TV Africa away from the Preston some budget presentation. We'll be looking at the nation's economy vis-à-vis Nigeria 62 and how far we have come and where we are going. Thanks for staying with us. Gospel. Thank you for having me, Jay. All right. Let's just talk about the nation. It's been 62 years of independence. One would have thought that 60 years is enough time to have moved from the creeping to crawling to the running stage. But economically, have we made tremendous impact, Gospel? Honestly speaking, if I be very realistic, no. If we're being very politically correct and just trying to prove intelligence, you want to show charts to say that the Nigerian economy has grown and all that, which is quite true. A lot of things have happened in the economy. The economy has expanded. It has grown. GDP-wise, it has been rebased. It's apparently the largest economy in Africa. But you have all those contexts. But if you look at the realities of the day, what can we account for in terms of the quality of life of the average Nigerian? At the end of the day, that's what it comes down to. That is what it comes down to. Growth, GDP only shows you economic activity. It doesn't tell you economic productivity. And you agree with me, Jay, that activity does not always equate productivity. You can do 100 things today and none of it will take you in the right direction. You need to get to the next level. I'm not here to quote a lot of figures. However, the truth of the matter is that Nigeria needs to do more for its people. A lot more has to happen in terms of reforms. A lot more has to happen in terms of competitiveness and market. I mean, at 62, it's quite a shame. A lot of things can happen. A lot of things should be happening. But then again, the fabric of the nation or the state of the nation is being driven by extractive institutional ideologies, which would mean that the economy is run by a few for a critical few. And those ideologies do not permit to help the critical mass scale. And funny enough, the minority can be richer if they help the majority win. You get what I'm trying to say. There is always a compromise for a win-win, but the mentality or the state of mind, the behavioral, the attitude or the state of mind of the hybrid Nigeria is not to take towards helping the other person win in terms of ideology now. So I think we can do more as a nation. It's still not too late. In fact, four years is a lot of time to turn money and economy around with the advantage of globalization, with all the funding available, with all the technology available in the world right now. Four years is a lot of time. So going forward, a lot has to be done more intentionally around human capital, around education, around access to market, around all sector, around the services sector, around public leadership, and around institutional culture that is healthy for growth and development, not the oppressive toxicity we have in our culture right now in our society. But then again, the long shot. All right, gospel. Let's try to understand some of the issues why we've had lots of pain to our economy. We've had lots of economic policies. You've even talked about reforms. Is it that our economic managers are bereft of knowledge for what to do to make our nation progress, or is just a thing of the willpower or something? I don't think, I think they are aware. I think they are aware of what should happen. I mean, they travel a lot. They have friends in other countries. They get into community of nations. They work with consultants. Recommendations have come in. So clearly, I do not think that there's any, any, anything that needs to be done to get to the next level that these guys are talking about. They probably have the best of the best brains in the presidential economic consult, you know, forget that. But then the ideology, the belief, the culture, you know, that drives everything else. People think that it starts and ends with infrastructure and the neighbor. No, it doesn't. It starts and ends. In fact, it starts and ends with an ideology. If you think of America, you can think of the ideology that runs America, value for human life to start with. You know, if you think of the UK, you think of the ideology that runs the UK. So if the ideology is right, even if you have the economy powered by minority for the minority, you still see that it still works for the majority. I didn't even figure out what I'm trying to say. So it can become like a shared win-win. So it starts with an ideology, an ideology, think of the military role, you know, and we moved into democracy. We only changed the reforms. The ideology remained, you know, amassing resources for a critical few and depriving the majority, you know, because once Nigerians begin to get empowered and truly empowered, they will begin to have a voice to question government, they will begin to have a voice to take government to make hold them more accountable. So the goal is to deprive the people enough that they lose their voice and they lose the opportunity to be empowered enough to hold them accountable. That's the game of play here. You know, I've seen it in many areas, you know, there's no particular sector in Nigeria today that we can boost off. It's really working to an international standard, not transportation zero, health zero, education zero, not to sound so pessimistic or as a prophet of doom, but this construct, the nature of things right now is actually going to be self-destructive if we don't do anything about it. All right. Thank you so much, Gospel, for your time and indeed all the insight and analysis that you have brought on the show for today. We just hope that Nigeria can begin to pick up from the pieces and look to the bright side and indeed the economic managers who do the right things. Thank you once again for your time, Gospel. Thank you so much for having me. It is our pleasure. Gospel Labele is an economist and he joined us to look at Nigeria at 62 and of course before that the President and presentation of the 2023 budget to the joint session of the National Assembly and that's the size of the show for today. Hi, I'm Justin Kadoni. Many thanks for watching. We return again next time. Bye for now.