Experts have reacted to the presentation of the 2023 Appropriation Bill, titled ‘Budget of Fiscal Sustainability and Transition’ presented before a joint session of the National Assembly by President Muhammadu Buhari yesterday.
The President said in his presentation that fiscal operations of the Federal Government result in a deficit of N10.78tn, which represents 4.78% of the estimated Gross Domestic Product (GDP) above the three per cent threshold set by the Fiscal Responsibility Act 2007.
However, Buhari’s plan to finance the deficit majorly by new borrowings totalling N206.18 billion from privatisation proceeds and N1.77 trillion draw-downs on bilateral/multilateral loans secured for specific development projects/programmes has been described as insensitive and absurd by some stakeholders.
Naija News understands that some financial experts have described the 2023 proposed budget as a ritual, adding that the government’s plan to finance it from borrowing is not only absurd but it will worsen the country’s debt burden.
In a chat with The Punch, an Economist and Professor of Management and Accounting at Leads City University in Ibadan, Godwin Oyedokun, said the Federal Government was callous and insensitive because it’s only borrowing to further its own selfish goals.
He pointed out that it is insensitive on the part of the government to be borrowing at this stage, and that they are borrowing for the next generation to pay since they have less than 9 months left.
According to him, the amount of credit Nigeria has been borrowing has not resulted in much in terms of equal infrastructure development, and borrowings are simply economic extortion.
Oyedokun said borrowing for infrastructural development is not bad but over the years nothing has been achieved with the funds borrowed, the government is borrowing to finance the internal and personal pockets of some people.
Also speaking with the newspaper, an economist and former Vice-Chancellor of the University of Uyo, Prof Akpan Ekpo, said it was dangerous for the country to hope to fund the over N20 trillion budget through borrowing.
He bemoaned how the country’s debts keep increasing and the huge amount of money used to service debts.
Ekpo said, “I can recollect that about 70 % or so is being used in servicing debts for 2022. That is worrisome. If the government keeps borrowing to fund recurrent expenditures, it is not good for the economy. It will retard growth.”
Borrowings he furthered should be done to fund capital projects as they have long-term multiplier effects.
Ekpo said the government have to stop borrowing to pay salaries or fund expenses, and that it needs to stop else progress would be hindered.
“That is why the government is insisting more on domestic borrowing because when a government intends to borrow from the World Bank or African Development Bank (ADB), it has to show that the money will be utilised for infrastructure, so it is quite worrisome that we are borrowing to finance recurrent expenditure,” he said.
Naija News also learnt the Managing Director (MD) and Chief Executive Officer (CEO) of Taurus Capital, Nnaemeka Obiaraeri, maintained that the proposed budget was one of “poverty perpetration and collective elitist grandstanding and looting.”
He said it makes no sense for the government to propose N20.5tn over the N13tn proposed in the last budget without commensurate growth in revenue.
In his reaction, Associate Professor of Economics and Statistics, University of Benin, Hassan Oaikhenan, was also reported to have said the 2023 budget was already on its way to failing because of its heavy dependence on borrowing.
Oaikhenan said, “The budget, from the look of things, will certainly fail. This is against the background that it will be heavily funded from borrowing. It is just a hollow ritual, which means next to nothing. This will just compound the failure of this administration.”
He added that “since the regime’s inception, the country has been plunged into avoidable debts. A few days ago, we were told that the government is set to borrow another N720bn and the lame-duck Senate has given the express approval.”
Oaikhenan described the release of the appropriation document for the 2023 fiscal year as a “mere hollow ritual” with no direct positive impact on the populace, noting that the budget for them is just an empty ritual.
This article was originally published on Naija News