The President, Muhammadu Buhari during the presentation of the 2023 budget at the National Assembly.
The National Assembly has approved or at least received budget estimates worth N93.453tn from the President, Muhammadu Buhari , in eight years.
Out of the N93.453tn budgeted from 2016 to 2023, a total of N67.4tn has been committed to recurrent expenditure, including the payment of salaries and emoluments of civil servants and legislators.
This amounts to 72.1 per cent of the entire budget devoted to the recurrent expenditure in the life of the Buhari regime. The administration met a debt of N12.12tn on June 30, 2015, but it increased it to N42.84tn by June 30, 2022, according to statistics obtained from the Debt Management Office. The increase represents 253 per cent growth over the period.
A breakdown shows that Buhari presented a budget of N6.061tn in 2016, his first after a populist election in 2015. The budget, however, heralded Nigeria’s first recession under the regime.
The budget was increased to N7.44tn in 2017; N9.1tn in 2018; N8.916tn in 2019; and N10.8tn in 2020.The budget for 2021 and 2022 rose to N13.6tn and N17.126tn, respectively. The estimates presented to the National Assembly last Friday for 2023 put the figure at N20.51tn.
The debt problem
The country’s debt rose by N30.72tn between July 2015 and June 2022, according to data released by the DMO.
According to the DMO statistics, Nigeria’s total debt as of June 30, 2015 stood at N12.12tn. By June 30, 2022, the figure had risen to N42.84tn, which showed an increase of 253.47 per cent. Despite the high increase in debt over the years, the government still plans to borrow N8.4tn in 2023.
Just like the massive rise in debt, there has been a huge increase in expenditure budget under Buhari. The Federal Government has increased the projected expenditure in its annual budget by about 238.45 per cent between 2016 and 2023, according to reports analysed by one of our correspondents.
According to data from the Budget Office of the Federation, the government budgeted to spend N6.06tn for the 2016 fiscal year. However, in the recently proposed 2023 budget, the projected aggregate expenditure was pegged at N20.51tn, more than thrice the amount budgeted in 2016.
In the 2023 budget, the government’s N17.12tn projected expenditure consists of N6.9tn recurrent expenditure, N5.9tn capital expenditure and N3.9tn for debt servicing. Statutory transfers amount to N744.11bn; non-debt recurrent costs, N8.27tn; personnel costs, N4.99tn; pensions, gratuities and retirees’ benefits, N854.8bn; overheads, N1.11tn; capital expenditure, N5.35tn, including the capital component of statutory transfers; debt service, N6.31tn; and sinking fund of N247.73bn to retire certain maturing bonds.
Despite the huge allocations, the budgets have failed to trickle down to the productive sector of the economy.
It was gathered that Nigerian manufacturers had slashed their investments by 56 per cent in the last seven years, reflecting a sector buffeted on all sides by poor policies and economic headwinds.
Between 2016 and 2021, manufacturers’ investments tumbled from N489.44bn to N217.22bn, according to data collated by the Manufacturers Association of Nigeria.
“How many companies in our sector are still in operation? Wempco has shut down; WAHUM is struggling, and the rest are just there. When we come for meetings, we will not be more than 11,” the Chairman of Qualitek Industries, Oluyinka Kufile, who is a major player in the aluminium and steel sector, said.
Kufile attributed the situation to a combination of poor policies, arguing that Nigeria had yet to understand its true direction in economic diversification.
The Nigerian economy has witnessed two recessions within the period – one fuelled by a foreign exchange crisis and the other by COVID-19 pandemic. But the responses of the federal and state governments to issues of the economy have been poor, according to analysts.
Insecurity has worsened over the period and the foreign exchange crisis has reached its crescendo with the naira-to-dollar exchange rate rising from N197/$ toN430-N442 in the official market over the period. A dollar sells for N735-N745 at the parallel market.
According to the Deputy President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, the situation is caused by poor foreign exchange and weak policies. He urged the government to eliminate subsidies and create a more convivial environment.
Economists knock budgets
Economic experts have kicked against the huge budgetary allocations and the excessive borrowing tendency of the government.
Source : Punch