Nigeria’s President, Muhammadu Buhari, on Wednesday, December 19, presented the 2019 budget to a joint session of the National Assembly.
In his speech, he made a number of claims and quoted statistics, while reviewing economic developments over the past three and a half years.
Most of the figures claimed are being examined by PREMIUM TIMES and DUBAWA, to verify the level of correctness. It must, however, be noted that many of the assertions made on expenditure are difficult to verify as there are no documents in the public space to verify.
This is the reason we have to tag some of the claims as “unproven” due to lack of data. We will, however, keep researching to update this work in the coming days.
The president made the following claims in his presentation:
First claim: The economy has recovered from recession and we have had six quarters of growth since then. Real Gross Domestic Product growth stood at 1.81 per cent in the third quarter of 2018, compared to 1.17 per cent in the third quarter of 2017.
We have had a sustained accretion to foreign exchange reserves from a low of $28.57 billion in May 2015 to $42.92 billion by mid-December 2018.
This has contributed to exchange rate stability and will provide a buffer against any unanticipated external shocks. Inflation has also declined from a peak of 18.72 per cent in January 2017 to 11.28 per cent in November this year.
Verification: When did Nigeria exit recession?
The NBS’ National Gross Domestic Product’s (GDP) report for the second quarter of 2017, released in September 2017, showed the GDP grew by 0.55 per cent (year-on-year) in real terms, an indication the country’s economy was gradually pulling out of recession after five consecutive quarters of contraction since the first quarter of 2016.
The official announcement of the economic comeback only came about two years after Nigeria was declared to be in recession. Quoting the statistics bureau, “the second quarter 2016 Gross Domestic Product (GDP) declined by -2.06 per cent.
Annual inflation rose to 17.1 per cent in July from 16.5 per cent in June, and food inflation rose to 15.8 per cent from 15.3.
Fact on GDP
The nation’s Gross Domestic Product (GDP) grew by 1.81 per cent (year-on-year), in real terms, in the third quarter of 2018. Compared to the third quarter of 2017 which recorded a growth of 1.17 per cent, there is an increase of 0.64 per cent points.
The second quarter of 2018 had a growth rate of 1.50 per cent showing a rise of 0.31 per cent points. Quarter on quarter, real GDP growth was 9.05 per cent.
In 3rd quarter 2018, aggregate GDP stood at N33,368,049.14 million, in nominal terms. This performance is higher when compared to the third quarter of 2017, which recorded a GDP aggregate of N29, 377,674.03 million thus, presenting a positive year on year nominal growth rate of 13.58 per cent.
Fact on foreign reserve
According to the Central Bank Of Nigeria, Nigeria’s foreign reserves hit $36.3 billion in October 2014, fell to $32.4 billion in January 2015, and stood at $28.6 billion by May 2015 and as at December 14, 2018 (the president said mid-December) Nigeria’s reserves stood at $42,918,575,967.
Also, his claim on foreign reserves in 2015 and 2018 is TRUE, according to the Central Bank Of Nigeria.
Second Claim: In the area of trade, Nigeria has moved from a deficit to surplus in its trade balance.
As at the third quarter of 2018, the trade balance was a surplus of N681.27 billion, representing a significant improvement from the deficit of N290.1 billion in 2016. This reflects the rebound in crude oil exports, increased non-oil exports and a reduction in the importation of food and items that can be produced locally.
Foreign capital inflows, including direct and portfolio investments, also responded to improved economic management. Capital importation to Nigeria in the third quarter of 2018, stood at $2.86 billion, which is a 56.7 per cent increase, compared to the corresponding period in 2016.
According to Nigeria Bureau of Statistics’ foreign trade report for Q3 2018, Nigeria’s trade balance nosedived by 67.6 per cent, quarter-on-quarter, to N681.3 billion in the third quarter of the year (Q3’18). The report revealed that foreign trade rose by 30 per cent with total imports rising by 73.8 per cent while exports rose by 7.8 per cent during the quarter.
The report stated, “Nigeria’s external trade totalled N9.025 trillion during the third quarter of 2018. Compared to the value of N6.903 trillion recorded against the second quarter; a rise of N 2.12 trillion or 30.7 per cent was indicated.
“The total export component of this trade was recorded N4.9 trillion, representing increase of 7.8 percent over Q2’18 and 35.7 percent over Q3’17. The import component stood at N4.2 trillion in Q3’18 showing 73.8 percent higher than Q2’18.
“The total value of capital importation into Nigeria stood at $2,855.21 million in the third quarter of 2018. This was a decrease of 48.21% compared to Q2 2018 and a 31.12% decrease compared to the third quarter of 2017.
“The largest amount of capital importation by type was received through Portfolio investment, which accounted for 60.5% ($1,723.05m) of total capital importation, followed by Other Investment, which accounted for 21.07% ($601.53m) of total capital, and then Foreign Direct Investment FDI, which accounted for 18.58% ($530.63m) of total capital imported in the third quarter.”
Also, the total value of capital imported into Nigeria in the third quarter of 2016 was estimated to be $1,822.12 million, which represents an increase of 74.84% relative to the second quarter, and a fall of 33.70% relative to the third quarter of 2015.
Third Claim: In agriculture, we are seeing increased investment across the entire value chain from agricultural inputs to farming and ultimately, food processing. Barely three years ago, Nigeria was spending $5 million dollars a day, on rice importation.
Today rice imports have virtually stopped. Indeed, we are on course to achieve food security in major staple foods in the not too distant future.
There is no documented evidence to back up the president’s claim on rice importation and food security.
According to the United Nations Food and Agriculture Organisation (FAO), Nigeria consumes more rice than any African country and is one of the biggest producers and importers of the grain on the continent.
Even though the Nigerian government, through the Central Bank of Nigeria, imposed import restrictions on rice and introduced a borrowing programme to stimulate local rice production while reducing the country’s food import bills in 2015, available data from Index Mundi and the United States Department of Agriculture states that rice imports increased from 2.1 million tonnes in 2015 to an estimated 2.5 million tonnes of rice in 2016, 2.6 million tonnes in 2017 and 3.0 million tonnes in 2018.
Also, according to the International Grain Council, rice imports in 2016 was estimated to be 2.1 million tonnes and 2.7million tonnes in 2017. It is estimated that Nigeria’s rice import will be 2.8 million tonnes in 2018.
Verdict: The president’s claim remains UNPROVEN.
Fourth Claim: Infrastructure development is also another area in which we have made a lot of progress.
For example, in the ministry of water resources, we identified 116 abandoned or uncompleted projects relating to irrigation, dams, drainage and water supply.
To date, we have completed and/or commissioned a number of these projects including; Central Ogbia Regional Water Project, Bayelsa State, Northern Ishan Regional Water Supply Project, Edo State, Sabke Water Supply Project, Katsina State,Takum Water Supply Project, Taraba State,Ogwashi – Uku Dam, Delta State, Shagari Irrigation Project, Sokoto State, Galma Dam, Kaduna State, Mangu Water Supply Project, Plateau State and Federal University of Agriculture, Makurdi Water Supply Project, Benue State.
Verification: This claim has been made several times, by the government, even though there is no publicly available documentation to support the claim.
In lieu of this, we will continue to research and will also send Freedom of Information letters to the ministries of finance and water resources, to demand the actual status of these projects and contract terms.
Verdict– Until we are able to get the official figures of money spent from the ministry of finance and status of project from the ministry of water resources, this claim remains UNPROVEN.
Fifth Claim: In the railway sector, we completed and commissioned the Abuja-Kaduna Rail Line and the Abuja Metro-Rail Project.
Similarly, the previously abandoned Itakpe-Ajaokuta-Warri Rail Line is undergoing test runs and will soon be commissioned.
We are also on track for the Lagos – Kano rail line as significant progress has been made on the Lagos to Ibadan segment of the project. We remain committed to rebuilding and expanding our road network.
In 2018, an additional 1,531 kilometres of roads have been constructed and 1,008 kilometres rehabilitated across the country.
Verification: Apart from some news report where the government had been making claims, there is no official data repository to substantiate these claims, we will, however, request full details of road and rail projects from the Ministries of Transportation and Ministry of Works, we hope to update this report as soon as we get details.
Sixth Claim: As a Government, we took a long-term view on tackling the effects of climate change which must be contained and ultimately reversed. We have stepped up our afforestation efforts. In the past two years, we have planted over 2.3 million seedlings in 21 States.
We also successfully launched the Green Bond which will focus on developing environmentally friendly projects and other green programs across the country. Nigeria is also actively participating in international efforts to tackle climate change.
Verification- There is no publicly available documentation to support the claim. Until there is any, this remains UNPROVEN.
Seventh Claim: Working with key stakeholders including the National Assembly, State Governments and the private sector, we intensified our drive to remove obstacles, reduce processes and lower costs of doing business.
The fact that over the past three years, Nigeria has gained 24 places in the World Bank Ease of Doing Business rankings is a clear indication that we are moving in the right direction.
Verification: According to the World Bank Ease of Doing Business report, Nigeria went down from 120 to 170 between 2008 and 2015. In 2017, Nigeria moved 24 places from its 2016 spot of 169 to 145. According to World Bank Ease of Doing Business report released in October 2018, out of a total of 190 countries ranked by the World Bank, Nigeria was ranked 146th in 2018, dropping by a spot from its 145th position in 2017.
Verdict- So, the statement by the president that Nigeria has risen by 24 places under his administration is TRUE.
Eighth claim: Through the N-Power scheme, 500,000 graduates have been employed to date. The National Home-Grown School Feeding program is feeding 9,300,892 pupils in 49, 837 schools in 24 states across Nigeria, and empowering 96,972 cooks; The Government Enterprise and Empowerment Program has seen to the disbursement of 1,378,804 loans to small businesses and farmers in all states including the FCT.
These are interest free loans that will be paid back; 297,973 households in 26 states across the country are benefitting from the Conditional Cash Transfer program.
Verification- The government’s National Social Investment Programme remains a major programme where different government officials have been making claims on its impacts. However, these claims are difficult to verify as there is no credible database that houses the activities of this programme.
In a freedom of Information reply to PTCIJ by the National Social Investment Office, the office refused to provide details on the actual number of beneficiaries of these programmes with an explanation that the FOI Act prohibits the sharing of personal information of the specified individuals who are currently receiving financial and social grants from public institutions without their consent.
The office also said the National Cash transfer programme is well known to the Community Trained Facilitators of the scheme who are said to be visiting the conditional cash transfer beneficiaries every week to support them with financial skills, (savings) group, basic numeration etc.
Verdict– Based on this reply, we can ascertain that there is no public data to support the figures the president quoted on beneficiaries of the social programme, so it remains UNPROVEN.
Verification- Regarding the president’s claim on the Npower programme, the information available on the website of the scheme states that 200,000 Nigerians have been enrolled so far in the scheme while news report have it that another 300,000 youths have been engaged so far, on the programme.
Verdict- The claim is TRUE.
Ninth Claim: Of the total appropriation of N9.12 trillion 2018 budget, N4.59 trillion had been spent by September 30, 2018 against the prorated expenditure target of N6.84 trillion. This represents 67 per cent performance.
Debt service and the implementation of non-debt recurrent expenditure, notably payment of workers’ salaries and pensions are on track. Despite the delay in the passage of the 2018 Budget on 20th June 2018, the sum of N820.57 billion had been released for capital projects as at 14th December, 2018.
Verification: The latest budget implementation report by the Budget Office of the Federation has no capture of the 2018 budget performance, so far. This will make it difficult to verify the president’s claim. We will expand our scope of research and update this report once new information arises.
Verdict: Until more information emerges on this, the president’s claim remains unproven.
(Research is ongoing on these claims. This report will be updated as new information arises)