A FORMER presidential candidate, Professor Pat Utomi has attributed the current panic over the global slump in oil prices to what he described as the Federal Government’s poor budgetary management, noting that the anxiety would not have come up if the government was prudent in budget management.
He had frowned at the austerity measures initiated to insulate the economy from falling crude oil prices, adding that panic was uncalled for since the fall was not below the 2014 oil price benchmark. Crude oil price dropped to $73 a barrel Thursday, few days after Utomi’s interview. The 2014 budget benchmark was on $75 a barrel and crude oil sold over $80 dollars at the time Utomi spoke.
Utomi, who spoke in an exclusive chat with Vanguard regretted that the government had not done enough, to prepare itself for the current eventuality.
His words: ‘’ I think it is a normal process when the country’s revenue begins to shrink and becomes more sensitive to our spending profile. As a matter of fact, there is nothing extraordinary about cost – effect measures becoming more sensitive to economic realities. What seems to be more puzzling about the whole process is really twofold. First, the oil prices are not below the budget benchmark of $75bpd that was set for the budget so as to result in such panic measures in response to the dropping oil prices in the global market.”
PAT UTOMI
“The budget does not reflect the reality of what goes on in the domestic and global economic environment. Put differently, our budget and budgeting process are just window- dressing. Our budgeting process reveals that government officials do as they please. The report of over spending by government ministries, departments and agencies has just been released and the current austerity announced by the government just confirms the fact that the budget has not really been the guide to spending and management of our revenues. If the budget is truly what it should be, what should be shrinking should be our savings, not what is required for running the government.’’ ‘’When we find our selves faced with dropping oil prices it is the stabilisation account which is the second port that we can be drawing from. But we have not reached that level. That is when we could be in crisis. If we planned well there would be no shouting austerity because the price of oil dropped.” Details on pages 18 and 19
All we need to do is to draw from that to ensure that the budget operates normally. If we were prudent in managing the budget we would not have problems.
‘’The Nigerian government can be run on 20% of its current cost, if serving Nigerian people is our motivation. Part of my hope is that the lesson of this austerity income crisis will make us to reconsider how our country is run. We have not started talking about corruption. We are suffering not just from a drop in the price of oil, but also from the fact that we are losing hundreds of thousands of barrels of crude oil per day to this amazing thing called oil theft. It is a very strange phenomenon to me in an era where, from satellite, you can find the name tag of somebody.’’
‘’One of the problems of our country is the enormous disparity in income between people who have access to power and people who don’t. Those who are taking much out of Nigeria are those who are giving the least in terms of economic output. That distortion is the reason why our economy is not where it should be. A few business people have extra-ordinary amount of money, many of them are not making the money from their output. They are making the money because this is the new mercantilism, this narrow business class are in league with powerful people in government. They use their relationships with government to abuse Nigerian people because money goes from government into their pocket. This new mercantilism is deepening the genie index. So the new Nigerian economic mindset is a time bomb.’’
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