From Ndubuisi Orji, Abuja
House of Representatives, on Wednesday, commenced and completed debate on the general principles of the 2023 Appropriation Bill, presented to the joint session of National Assembly by President Muhammadu Buhari, last week.
However, the debate generated diverse reactions, with lawmakers lamenting the endless borrowings by the Federal Government. While some lawmakers argued that loan servicing was draining government resources, others argued that the outstanding loans were still within acceptable limits.
The deputy minority leader, Toby Okechukwu, while contributing to the debate, described the benchmark on which the N20.51trillion is premised as “ a distortion of reality.” Okechukwu stated that whereas the government is proposing N435 exchange rate to one United States (US) dollar, the exchange rate in the parallel market is N740 to one US dollar.
According to him, the benchmarks as established, means that will N435 exchanging for one dollar. At the parallel market, it is N740. It is a complete distortion of reality and we have operated that way, running two parallel markets regarding the exchange rate of thecountry.
“Mr. Speaker, the benchmark we have as per OPEC quota is 1.69 million barrels per day. Today, what we have set out to do is less than 1.8 million. Unfortunately, the insecurity in the Niger Delta, the level of theft and the heist that is going on in the oil industry has made this impossible.
“I do not know when you set out a goal to harvest 1.8 million barrels of oil per day and you come short of 50 percent. Today, we are doing 800,000 and if this economy is hemorrhaging, it is to the effect that we are not able to achieve what we are supposed to do and you begin to question who are these superintendents.”
What is also sad is that the level of borrowing that has been done; last budget we did 3.5(trillion naira), today, we are going to borrow. The debt servicing for next budget is going to be N6.31 trillion. If you combine that with the reccurrent expenditure, what we we are going to spend on overhead is about more that 70 percent of the budget. “The subsidy is coming off from the second half of next year. It’s has been political. It is not driven by patriotism. I think this House should be courageous to face the reality and ensure that we retool the budget so that it can be effective for Nigerians.
“The last budget of President Goodluck Jonathan budgeted N4.8 trillion. Now, we are budgeting N20 trillion. If you check the amount in dollars, they are of the same amount. It’s about 30 billion dollars and today you can see how the country has been run aground. Parliament will do its job and we will retool the budget accordingly,” he stated.
However, the chief whip, Tahir Monguno, in his contribution, disagreed with the deputy minority leader on the level of government borrowing. Monguno noted that the Federal Government borrowing is still within 40 percent of the Gross Domestic Product ( GDP) ratio, which is not a cause for worry.
“Before I make my contribution, I want to take up the deputy leader of the opposition on some of the points that he raised.
First, he alluded to the fact that our debt is no longer sustainable, that government is borrowing too much. I will to counter him to the effect that our debt to GDP ratio is still within the sustainable power because it 40 percent while the international threshold or standard for debt to GDP ratio is 55 percent.
“Our own is still sustainable and there is no cause for alarm as raised by the deputy leader of the opposition. So, the government deserves a pat in the back for keeping our debt to GDP ratio within the sustainable limit allowed by the international threshold.
Also, Leke Abejide and Sada Soli raised concern in the disparity between the official exchange rate and what obtains in the parallel market.
According to Abejide, “last year, we had N400.15 to a dollar, this year is N435.37 to a dollar and when there’s too much gap between the exchange rate at the autonomous market, then you are ruined for capital flight within. The parallel market is N740 while we have N435 as official. So, if the naira is going to be devalued, it should be devalued now to discourage this round tripping system that is currently going on in Nigeria.”
On his part, Soli said “Mr Speaker, the key assumption of this 2023 budget is the fact that devaluation of the naira remains a reality with the understanding that the naira will move to N435 per dollar. The end result will be that the naira will be devalued.
“One of the major shortfalls in our budget is the revenue and how do we bring it up. We must improve our tax administration and collection efficacy and the government including the parliament must step up their oversight functions.
“We must step up efforts and put an end to revenue leakages through this crude oil theft. The parliament must have a role to play in this. The critical arm of government that must play a role in this oil theft is the parliament so that we can stem this menace.”
After the debate, the House passed the bill for second reading and referred it to the Committee on Appropriations, with the various standing committees as sub committees.