Modupe Gbadeyanka
By Modupe Gbadeyanka
President Muhammadu Buhari has been advised to withdraw the 2021 budget estimate he presented to a joint session of the National Assembly on Thursday.
According to the former Vice President of Nigeria, Mr Atiku Abubakar, who made this suggestion, the 2021 appropriation act contravenes the Fiscal Responsibility Act.
In a notice on Saturday, the candidate of the Peoples’ Democratic Party (PDP) in the 2019 presidential election said while analysing the government proposed expenditure for the next fiscal year, he discovered “a number of issues, very grave and perhaps disturbing issues” that could threaten “our economy.”
However, he stressed that one of the faults he found in the budget was the budget deficit of N5.21 trillion in the appropriation act.
Mr Atiku argued that, “This amount is just over 3.5 per cent of Nigeria’s 2019 GDP,” adding that it is also “contrary to the Fiscal Responsibility Act of 2007, which provides in Part II, Section 12, subsection 1 that: Aggregate Expenditure and the Aggregate amount appropriated by the National Assembly for each financial year shall not be more than the estimated aggregate revenue plus a deficit, not exceeding three per cent of the estimated Gross Domestic Product or any sustainable percentage as may be determined by the National Assembly for each financial year.”
In the former Vice President’s message, he pointed out that “Nigeria had a GDP of approximately $447 billion in 2019,” saying that the 3 per cent of this amount is $13.3 billion, which at the current official exchange rate of N379 to $1 amounts to N5.07 trillion.
“So, clearly, the budget deficit of N5.21 trillion, as announced by President Muhammadu, is above 3 per cent of our GDP and is, therefore, in contravention of the Fiscal Responsibility Act of 2007,” he said.
Mr Atiku stated further that, “Even more disturbing is the fact that our GDP has fallen sharply from its 2019 figures, and has been projected by the World Bank and other multilateral institutions at somewhere between $400 billion and $350 billion, meaning that in actual sense, the N5.21 trillion budget deficit is actually far above the 3% threshold stipulated by the FRA.”
He said “that this escaped the notice of the Buhari administration shows a glaring lack of rigour in the formulation of the budget,” describing it as “a very disturbing development.”
“Furthermore, this deficit shows the precarious state of our national finances, which have since been overburdened by excessive borrowing on the part of the Buhari administration.
“It has not escaped my attention that the Fiscal Responsibility Act of 2007 makes provision for the National Assembly to raise the threshold of the budget deficit from 3 per cent to a higher figure.
“However, if this is done, they will be serving this administration’s interests, not Nigeria’s, because the Act says that such a threshold must be sustainable,” he submitted, asking, “Is it sustainable when our budget makes almost as much provision for debt servicing, as it does for capital expenditure?”
Concluding, he called “on the President to recall this budget and recalibrate it to reflect the provisions of the Fiscal Responsibility Act of 2007, and the current economic realities of the nation,” saying, “To do otherwise will not only be unpatriotic but will also be catastrophic for our nation’s economy.”
