Former Vice President Atiku Abubakar yesterday accused President Muhammadu Buhari of borrowing away Nigeria’s future by sinking the nation into more debts. His criticism coincided with the signing into law of the 2020 Appropriation Bill of N10,594,362,364,830 by Buhari during an event witnessed by Vice President Yemi Osinbajo, Senate President Ahmad Lawan, House of Representatives Speaker Femi Gbajabiamila, Secretary to the Government of the Federation, Boss Mustapha, and presidential aides.
Previously N10.33 trillion, the National Assembly had increased the sum to N10.594 trillion. While N560.47 billion of the total budget is for statutory transfers, N2.7 trillion goes into debt servicing.The budget includes N4,842,974,600,640 for recurrent expenditure; capital expenditure N2,465,418,006,955; fiscal deficit N2.28 trillion and deficit/GDP N1.52 per cent.
The budget, as passed by the National Assembly, maintained Nigeria’s daily oil production rate at 2.18 million per barrel, but increased the Oil Benchmark Price to $57 per barrel against the $55 proposed by the executive. The signed budget also retained the inflation rate at 10.81 percent and the exchange rate at N305 to a dollar as proposed by the executive.
“The fact that Nigeria currently budgets more money for debt servicing (N2.7 trillion), than we do on capital expenditure (N2.4 trillion) is already an indicator that we have borrowed more money than we can afford to borrow. And the thing is that debt servicing is not debt repayment. Debt servicing just means that we are paying the barest minimum allowable by our creditors,” Atiku said.
In a statement, Atiku who contested against Buhari in the last presidential election said: “By reforming the Nigerian National Petroleum Corporation (NNPC), Nigeria can raise the $29.6 billion the Buhari regime wants to borrow, and we will raise the money without going into debt.
“If we had taken that route, not only would we have attracted Foreign Direct Investment into Nigeria, but even better than investment, we would have attracted confidence in our economy, because it would have shown that we have a thinking leadership.”
Comparing Nigeria’s fiscal predicament with its neighbour, Atiku asked: “Why are foreign investors leaving Nigeria for Ghana? The answer is that Ghana, unlike Nigeria, has learned how to divorce key institutions from politics. The Ghanaian central bank enjoys a degree of independence that our own CBN can only dream of under the prevailing atmosphere.
“You will not hear Ghana’s leaders give flippant interviews overseas about their plans for the Cedi, as Buhari has done in Europe about the naira. It rang alarm bells because it is not the job of the executive to interfere in the role of the reserve bank.
“Neither will you find Ghana’s leaders blatantly intimidating the judiciary by obviously setting up judges and invading courtrooms. Why would any investor come to Nigeria under such prevailing circumstances? Their thought would be that if they had industrial disputes, our courts, under this administration, could not be counted on to deliver impartial justice.”
Faulting the budget, the opposition Peoples Democratic Party (PDP) said in a statement: “It is indefensible for the Buhari presidency to propose a whopping N37 billion for the renovation of the National Assembly complex, which was built at the cost of N7 billion.”
It said the embedding of the N37 billion in the budget of the Federal Capital Development Authority (FCDA) leaves a burden of explanation on the president’s doorsteps. Buhari was, however, full of praise for the budget. He stressed that his government was determined to implement the budget for the benefit of Nigerians. “We are well-positioned to effectively implement the budget and deliver our promises to Nigerians. Businesses will also benefit, as they are now in a position to plan more effectively,” he said.
The 2020 budget is the second Buhari will sign this year, having signed the 2019 Appropriation Bill in May. He noted: “I have directed the Ministry of Finance, Budget and National Planning and all Federal MDAs to ensure effective implementation of the 2020 budget.”
He also commended the parliament for restoring the budget to a January-December cycle. According to him, in the 20 years since the return to democracy, “this will be just the fourth time that the federal budget was passed before the end of the previous year, and this is the earliest.”
He further directed that the presentation of the 2021 Appropriation Bill should be done in September 2020, urging all federal ministries, departments, and agencies to cooperate with the Ministry of Finance, Budget, and National Planning and keep to the timeline.
Meanwhile, members of the Organised Private Sector expressed cautious optimism on the budget. President, National Council of Managing Directors of Customs Licensed Agents (NCMDCLA), Lucky Amiwero, stated: “If the implementation is bad, nothing will happen. It is not just about announcing bogus money, but how implementable is the budget. The whole thing is in a serious mess. Everything in the country is going down, but we hope that the budget will cushion it if it is well implemented. We have seen figures in the past, but we now need to see what the government is coming up with.”Olusola Teniola, President, Association of Telecoms Companies of Nigeria (ATCON), noted that unless the government increases its revenue base and diversifies its sources of revenue, borrowing would increase significantly.
Another telecoms expert, Kehinde Aluko, said: “When you spend 80 percent of revenue on a limited number of people, you will get the sort of outcome we are currently grappling with. Unless you reverse the trend of your priority by spending 80 percent on capital projects and spend less on recurrent items, there would be massive poverty.”
Public affairs analyst, Jide Ojo, said he was stunned to hear Buhari saying he would send the 2020-2022 external borrowing plan to the National Assembly, despite having a 2016-2018 external borrowing plan of $29.96 billion before the National Assembly for approval. He asked: “Must we borrow?”
Similarly, the Centre for Social Justice (CSL) noted that the first challenge is for the government to raise revenues needed to fund the deficit so that the capital component of the budget would be duly implemented. This should be followed by guaranteeing value for money in the expenditure of funds appropriated, CSL said.