Posted by News Express | 13 July 2020 | 1,188 times
By CHARLES IWUOHA
The Amaka Chiwuike-Uba Foundation (ACUF) has urged Federal Government to lay emphasis on the credibility and high performance of the 2020 Revised Budget as a catalyst for infrastructure development.
The ACUF Board Chairman, Dr Chiwuike Uba, made the call in a statement he issued to newsmen in Enugu on Saturday, while reacting to the newly signed revised budget.
President Muhammadu Buhari signed the 2020 Revised Federal Government Budget of N10.8 trillion (about $28 billion) into law on Friday July 10.
Uba, while commending President Buhari for the budget and its early signing, said that the signed 2020 budget had a budget deficit of about N4.5 trillion, debt service of N2.9 trillion, a capital expenditure of N2.4 trillion and N4.9 trillion for recurrent expenditures.
He said that Nigeria’s budget had consistently suffered from low credibility and poor performance occasioned by corruption, inflation of contracts, stealing, poor planning and supervision, weak institutions and most especially, unrealistic revenue and expenditure projections.
According to him, the expected revenue may be difficult to achieve as a result of the COVID-19 ravaging the globe.
Uba, who is a developmental economist, said that about 42 per cent of the 2020 budget would be funded through additional public debt as Nigeria’s debt service to revenue ratio is about 66 per cent.
He however observed that “this is above the World Bank prescribed debt service to revenue ratio of not more than 22.5 per cent.”
The chairman also expressed fear that greater part of the budget might be siphoned for selfish uses and at the detriment of poor, unemployed and dying Nigerians and therefore recommended that Nigeria’s budgets should be made transparent and accountable as Nigerians need to know the budget for waivers and subsidies.
Uba also advised for the budget to be re-allocated “as the present allocations will not guarantee economic stabilization and growth intended by the government and more attention paid to the health and education sectors.
“We are worried about the performance and credibility of the budget. In most cases, the actuals are usually at variance with the budgets.
“According to the information accessed from the Budget Office of the Federation website, as of the 3rd quarter in 2019, the total debts and fiscal deficits increased by 13.7 per cent and 94.92 per cent above the amounts provided in the budget, respectively.
“Given the current global crisis occasioned by the COVID-19, the proposed 2020 Federal Government revenue (loans, oil, and non-oil revenue) may be difficult to be achieved. And, this, on the other hand, may also affect the proposed expenditures,” he noted.
With a budget deficit of about N4.5 trillion, debt service of N2.9 trillion, a capital expenditure of 2.4 trillion, and N4.9 trillion for recurrent expenditures, “this means that about 42 per cent of the 2020 Federal Government will be funded through additional public debt.
“Nigeria is borrowing to fund consumption and this is not only unsustainable but unacceptable for a country struggling with high poverty rate, high misery rate, high unemployment, insecurity, and an economy facing recession among other challenges.
“Painfully, monies that end up into personal bank accounts are included as part of the metrics for determining budget performance. A typical example is the alleged N1.6 billion shared by the management of NDDC, as part of their COVID-19 palliatives.
“Budget performance should not be measured based only on the amount expended, but, more importantly, it should be based on the value-added. This should be determined by evaluating the social costs of the foregone projects and activities as well as the social and economic benefits derived by the citizens for the monies spent.
“Clearly, Nigeria needs to rethink its project and infrastructure strategy. A cost-benefit analysis should be employed in project determination and implementation.
“The budget of about $28 billion is a far cry to South Africa’s budget of $122 billion and Kenya’s budget of $32 billion. Unfortunately, Nigeria has a population of over 200 million people. Nigeria’s population is 3.5 times the South African population of 57 million people and over 4 times Kenya’s population of 48 million. Yet, only about 22 per cent of the 2020 Federal Government budget is for capital expenditure,” he said.
Uba noted that the current administration promised to increase the capital budget, but that had not really happened as promised.
“Most of the government budget under-spending is related to capital expenditure, especially, the economic sector – infrastructure projects. In most cases, more than a third of these projects are never started. Even when they are started, it is never completed.
“It is even worse when you factor in over-inflated and poorly executed projects,” he added.
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