Fred Itua and Kenneth Udeh, Abuja
Senators, yesterday, faulted the N10.33 trillion 2020 budget estimates presented by President Muhammadu Buhari on Tuesday to a joint session of the National Assembly.
The lawmakers expressed mixed feelings during the debate on the general principles of the Appropriation Bill. Many senators conceded that the estimates submitted were unrealistic.
Leading the offensive, Senate leader, Yahaya Abdullahi, said, “The capital budget to GDP ratio is rather too small (about 2 per cent of GDP).
“The injection of this amount is a mere drop in the ocean and is incapable of stimulating the economy to higher growth, wealth creation and employment generation.”
He explained that “the projections of increased oil production averaging 2.18 million barreIs per day, in the medium term, are subject to very high risks that have had devastating consequences in recent times. Volatility, both at the international market and in the Niger Delta are factors that could make these expectations only tentative.”
The Senate Leader also reviewed the allocation for capital development in the budget and submitted that “when viewed in terms of per capita, the 2020 capital expenditure of N2.46 trillion is paltry.”
Abdullahi said the projected high deficit of N2.18 trillion for 2020 was a direct function of the economy-wide revenue shortfalls, as well as the choice and cost of borrowing.
“Government, particularly the collecting agencies, must improve on their collection capacity. But to do this, there must be robust investments in the real sector so that it could grow to earn taxable revenues,” he said.
He also noted that “debt service as a percentage of capital expenditure is still high, while debt service as a percentage of revenue should be diminishing.”
The Senate leader advised that government should dedicate itself to “raising more revenue by investing in the real sector to grow the economy and boost employment and productivity; broadening the tax base in order to capture more revenue sources; improving our transparency and reduce pilferage by intensifying the drive against corruption; and ensuring that there is security for economic operators, both local and foreign.”
He descended heavily on the Central Bank of Nigeria (CBN) and declared that “the continued pursuit of CBN’s restrictive monetary policy in the face of a clear economic necessity to reflate the economy, particularly by ensuring cheap money to power the real sector of the economy, is still baffling.
“I have, on the floor of this chamber, repeatedly called for the realignment of the country’s monetary and fiscal policies to ensure the right structural momentum in the economy.”
However, when the minority leader, Enyinnaya Abaribe, took his turn to assess the budget proposal, he was full of thanks to the Senate Leader for making his (Abaribe’s) job easier.
Describing the budget as one of taxation, Abaribe said it was contradictory that the President could talk about job creation when he had failed to invest in what should create jobs.
He also observed that “debt servicing as a component is higher than capital expenditure.”
Also, the minority leader noted that the projected growth as read by the President was 1.9 per cent less than the population growth of 2.6 per cent.
“So, if you look at it globally, we are still struggling, that is why I was very happy when the Senate Leader said we may have to take over and redirect the economic policy of this government, having seen that the executive has not done anything,” he said.
According to Abaribe, the assumptions of the budget proposal were completely unrealistic.
“The fact is that this is not a sustainable budget. The fact also tells us that where we are going, if we need a change, we must be able to look at the critical fundamentals of this budget speech and make adjustments.”
In his contributions, former governor of Benue State, Gabriel Suswam, said the budget was a very ambitious one intended to solve infrastructural problems.
He noted that the economy should not be allowed to continue to deteriorate.
“Our economy has got to a level that this Senate needs to take over and redirect it’s affairs,” he said.
He added that persistent borrowings would increase budget deficit.