Economists and commentators like to bulk out their forecasts over election periods with the narrative that the administration in power is prepared to allow some macro slippage to enhance its chances of re-election. This is a universal phenomenon so we are going to test the narrative in a series of our daily notes on the run-up to the Nigerian presidential elections of April 2007, April 2011 and March 2015. In our first note we examine total FGN spending. Our chart shows the two latest elections because only quarterly data is available for the first from the source.
- The sharp fall in FGN spending in March and April 2015 (ie at the time of, and immediately after voting) to levels below any month in the build-up to the 2011 elections is striking. We could query the data, develop imaginative theories, allow for the habitual delay in budget passage or take note of the oil price. We favour the last two lines of enquiry.
- The spot price of Bonny Light averaged US$61/b in the eight months leading up to the 2007 polls, US$99/b in the run-up to the 2011 elections and US$68/b in the latest eight-month period.
- Spending in the build-up to the vote in 2011 reflects the large rise in the national minimum wage, currently topical, approved by the National Assembly.
Total FGN expenditure (N bn)
- We have not allowed for state and local government outlays, which are heavily dependent upon the oil price for the monthly payouts. Administrations can also boost spending by allowing arrears to contractors and the like to accumulate, and by pushing their spending agendas through public agencies.
- Another route open to them is to draw on balances in the excess crude account, if such exist of any size, for timely distribution to the three tiers. On the basis of the FGN finances, we struggle to identify any serious slippage.