 We welcome back. The president, Bola Agma Tinobu, has signed the 28.7 trillion era 2024 appropriation bill into law. That's a topic of discussion this morning. And our guest is Mr. Bola Hon Olojede. Good morning and welcome to the program. Yeah, good morning. Nice to be on the program. Happy New Year to you. I wish you the same. OK, 2024 is looking up and we hope that it's going to be a better year than 2023. Yes. Yes. What bookmakers think is actually a tough year? But you see, in every crisis, there is an opportunity to depend on your look. We are glad for the optimism. We're hoping that everybody will take advantage of whatever presents itself. Let me not say of the crisis because there's no crisis yet. Well, maybe, like we said, things are looking up and in every situation you can always find something that will be very beneficial to you. We have seen a budget that was sent to the National Assembly just above the 27 trillion. And now we have a National Assembly that has jacked it up a little bit by more than one trillion. So we have a budget of 28.0 trillion naira being signed into law. What is that to you? When you heard that budget being and the breakdown of the budget, what came to your mind? Are we looking at a 2024 that will be good or as tough as you said some experts have said? Well, the inclusion, the additional 1.2 trillion, it has become the normal thing when budget has started as way back in the good luck Jonathan's era. When it started, you send a budget to the National Assembly, they will put some things in it and send it back to you. And we've not been able to get out of that. There has been an argument here and there about whether this is the right thing to do or not. However, it is what it is. That is where we are right now. Two things about budgets. Number one is supposed to be a planning document. Number two, it is a law, the Appropriation Act. So it is an authority to spend legally. Those are two very important parts to the budget. Now, on the side of budget being a planning document, I don't think we are quite there yet. Our budget still does not reflect the level of what I would call seriousness that I expect to see of a planning document. So how do you just increase the budget by 1.2 trillion for example? When you go into the assumptions for that budget, that is when you begin to question a few things here and there. So that is what I mean by I'm not so sure that we are quite there when it comes to making projects a real planning document. But on the other side, which is what the politicians might be more excited about, is to say budget is also an authority to spend. So on that issue of authority to spend, it might actually be what is driving the inclusion of new items or new amounts into various segments of the budget. You said something that made me remember. The reason given by the National Assembly for maybe adding more than 1 trillion to the budget is that they are projecting a revenue rise from the government-owned enterprises, which is to me an assumption because these people promised that they were going to make sure that IGR was going to be better than it was in 2023. So based on these promises by the government-owned enterprises, they moved up this budget. Is that not a recipe for disaster? Basing a budget on assumptions that may or may not come to fruition? Okay, technically speaking, budgets are based on assumptions. In fact, a critical part of a budget document is what you call budget assumptions. So it is based on these assumptions that the figures are crafted. However, where the problem comes in is when you try to dig into this assumption. You have mentioned the fact that there is an assumption that the government enterprises will generate more revenue. The question is how? So in a proper budget assumption situation, the exact how this new revenue or this additional revenue are going to be generated is important. It goes beyond promises. I promise to generate this money. What is the basis for that additional generation? That is what made assumptions more reliable and something that we can work with for the purpose of the budget. That's why I said from a planning document perspective, I'm not sure we are quiet there. The head of a particular government enterprise cannot just come and say, because of the engagement I had with the National Assembly, we will increase revenue by so so much. That is not how it works. How it works is that because we are going to be doing social activity, which will generate this amount of income every day or every month, we will be able to add this much by multiplying how much we are generating per month by 12, and this is what it will come to. That is what Valid and the Valid assumption does. It is not just a promise. So the question would be those promises that were made that informed the increase in budgetary provision or revenue, were they valid? Were they tested? Were they challenged? Were there numbers behind them? Which is an exact question I want to ask you right now. The reason why they are jacking up those budgets are those reasons Valid or is it just maybe some other frivolous spendings just like the yacht that we were seeing that it said it was for the military or the 160 million ARR SUVs for the politicians? Are they jacking this up for their own pockets or because they needed to increase our revenue? Well, whatever you want to spend, that is the expenditure side of the budget and that is also the revenue side of the budget. What they have done with the government enterprises is to use their revenues to jack up the revenue side of the budget. To say look, you said you were going to make this much. Can you make an additional this much on top of it? The other side which is the expenditure is where each choose about what you are going to spend this revenue on. That is where that comes in. For me as citizens, we must pay close attention to budgets than we have in the past. All those expenditures that have been listed, there was a time in my life when I used to sit down with the national budget and dissect it. What I have found out in those years were not exactly exciting. Maybe things have changed, it is possible that things have changed. What you find out, for example, are expenses that are duplicated, all sorts of expenses duplicated across several departments. Number one, we have also seen because it became a media issue, situations in which you have budget owners who are saying, I didn't know anything about that particular item, I didn't put it there. We have seen situations like that in this country. We also have situations in which items of expenditure, the same item with the same description, carry different prices. So if I am going to be doing an electronic street light in Cross River, it should be about the same cost. If I am doing an electronic street light also in Abuja or in Kano, but where you have a situation in which price in a particular area is more than double what it is in another area, it shows that we need to do a lot more work. If budget is actually going to be a proper planning document for us as a country. Assumption around oil, for example, how the amount of production, the oil production has gone up. What is in four minutes? What is what is driving it? We must be able to substantiate all this assumption, make it reasonable. Otherwise, it becomes just a joke and it will be a mere authority to spend. So whatever we make, after all we have an authority to spend. We just go ahead and spend. That is not where we ought to be as far as budget. I don't even know what to ask anymore. About 2024, because some of the items on the budget that need attention, something like education for instance, is still having like 7.5% of the budget. When the United Nations or UNICEF is talking about 25% or so, it didn't even get up to 10% or 15%. And I don't know, because every nation is judged to be as great as the people who are educated in it. That's right. Where are we going in Nigeria? Okay. It is also important that we know that there are two issues from a budget size that readily comes to my mind when I think of Nigeria's budget. Number one is the reality that it is too small. It is tiny. That might be the right word to describe it. And you may not see how tiny is it until you place it beside other African countries. My typical example would remain South Africa. South Africa's budget is about four to five times that of Nigeria. That's why the fact that South Africa has barely a quarter of our population. So when your budget is too small, it's a situation of two chicken laps to be shared among three elders, you are going to cause trouble. The budget itself is all three. So we must be able to think along that direction what do we need to do to raise our budget dramatically from what it is. What South Africa gets from that alone? In some years it was bigger than the entire budget of Nigeria. So when you look at that, there's a problem. Number two is the fact that you now have this tiny budget that is not enough to go around. How do you spend that amount? Are you going to prove it? How wise are you with spending the little amount that you have obtained? So these are the two sides when you consider the quantum of Nigeria's budget. Now you spoke about education seven percent, yes. We need to be able to show, for example, that South Africa that I mentioned, education is about 20 percent, between 25 and 28 percent of the budget. In fact, the education budget alone in South Africa is about the size of the entire budget of Nigeria. So, but then Nigeria's top most budget goes to the fence. Or has gone to the fence, at least they say. Because we have serious security challenges. It won't deal with the security challenges. Nobody will even go to the schools. True. True. Okay, but now you're saying we need to raise up our budget because in your words, it's a tiny budget. But my question is, how do we fund this budget? How do we fund it? Yeah, we raise it. If we're raising it up to maybe as high as South Africa's budget, which is five times ours, how are we supposed to fund them? Are we going to keep borrowing to fund this budget just because we want it to be higher? So then it can turn into revenue, which is also an assumption. So we need to look at our revenue sources as a country. Okay. The question is, what do we need to do about taxes? And then what do we need to do about our non-tax revenues? Those are the two main sources of our revenue. Now, let's start with taxes. When you hear taxes, the first thing that comes to people's mind is, oh, they want to increase taxes. But that is not where it starts. One of the major issues about taxation income starts from is the taxes that are even currently on the table. How much of it are we able to collect? What is the collection efficiency of the taxation that is on the table? That is number one. So if we deal with that, and then let's remember that there is an on-reaching contract between the government and the people when it comes to taxation. The on-reaching contract is to say, look, I will give you my taxes. You will use the taxes to better my life. So I want to be able to see better road. I want to see better education. I want to see better infrastructure. I want to see better healthcare. Where people are not able to see enough of that? The shown taxation, they avoid it, they evade it. They are not excited about giving their taxes. People can see what you are using the taxes for. And what you are using the taxes for goes beyond, I want to buy a yacht or I want to feed some things that are not properly done. Or I want to pump more money into the bureaucracy without any due justification. People are not happy. So that affects the current status of taxation. After that, you think of how to bring more people into the taxation net. A lot of people today are not paying taxes. They are paying extortion. So people come to you and say, you are supposed to pay this much. You keep your hand into your wallet and you give them $10,000. And those money that you are giving them, you call it taxes. They are not taxes because they don't have enough access to those kind of money. What you are paying is extortion, not taxation. So we also need to bring more people into that tax net. Make the collection efficiency improved before we even start talking about increasing certain taxation. Now, we must understand who are these taxpayers? The taxpayers are of different categories. Not the corporate taxpayers. What do we need to do to make them make more money? Because it is from the money that they make that they are able to pay you taxes. So correcting the business environment, making it more friendly, making it possible for them to make more money is important. If you are going to get money from the corporate people, they have business to do it because they pay you from the profits. On the individual basis, we find a situation where the highest any part of the economy are barely paying taxes. So the taxes from income, the income tax that we get in this country are coming from the middle class. People who are in paid employment like you and I, whose taxes are deducted at stores are limited. The people who are the top earners are not carrying their fair share of taxation, personal income tax in this country. And we also need to look in that direction, especially for the income of the states. So there are a lot of things we need to do in terms of income. We must ask ourselves why is that income about the size of the entire return revenue of the pragmat in Nigeria. The part income in South Africa, why is it about the size of the return revenue of the pragmat? So we need to do a lot more in that revenue. And don't be scared when we need to do a lot. It doesn't have to be increased taxes from people. Alright, so since we're talking about income for the revenue, let's talk about foreign investments. I want to believe that would also impact our revenue. But then a lot of people are saying that we don't even have an economy to thrive in for these foreign investors to come in. But the precedence is moving everywhere in the world, looking for people to come into Nigeria to invest. But just tell us how can this also improve our revenue, which in turn also affects our budgets as well. Right. Foreign direct investment is a direct function of the business environment. If you remember one of the projects that was on the dashboard all through the last administration work, how to improve the business environment of Nigeria. Much was achieved in that direction. It's left to be seen. But there's a whole lot more that is still on the table that we need to do in terms of improving the business environment. So I ask you, if I'm an investor and I'm coming into Nigeria and I'm talking or coming to do some agriculture on the plateau, the plateau has certain advantages when it comes to agriculture. And then on Christmas Day, 200 people got killed. How excited am I going to be about coming into that kind of environment? Probably not. If I'm coming into an environment and from the information I had, there were about 50 different taxes that I would be exposed to when I come into the business. How excited will I be? I know that there is currently a committee that is working on streamlining the multiple taxation regime in Nigeria. We wish them good luck and we hope that they will be able to deliver on that mandate because it is critical to all those invitations to foreign direct investors to come into the country. Issues around volatility of the currency. When I bring my money here and I do business, will I be able to take the money out? If I'm able to take the money out, at what rate will I be able to take that money out? How long will it take to take the money out? All those issues are considerations for foreign direct investment. What is the state of the infrastructure? Especially the one that affects the kind of business that is coming into the foreign market. So there are still factors in how that we must fix that will encourage investors to come into the space. Nigeria remains a good market. The population is huge. It is also a huge consumer country by virtue of that anyway. So there are people who are looking into that market. They are looking into it and they can come in. But we need to fix all those little discussions here and there and what might not encourage them to want to bring their investment. All right, that's a very good way to drop in. We'll have to wrap up on this segment. But thank you so much for joining us. Thank you. Thank you and happy New Year once again. Thank you Gola. Thank you. All right, we've been speaking to Gola on Oluja Day. He's a public affairs analyst and we're talking about the 28.7 trillion anaerobic creation bill that the President has signed into law. Anyways, we'll take a quick break, look at the weather and when we return we'll be looking at our next hot topic. Stay with us.