Posted on Sat 11 Nov 2017, 05:53 PM

Amid commendations for its timely submission, experts have identified flaws in the 2018 Budget submitted to the National Assembly by President Muhammadu Buhari on Tuesday.

The senior economist, SPM Professionals, Paul Alaje, told PREMIUM TIMES on Wednesday that one of the areas the government did well was its spread of projects to all geo-political zones, saying more of this should be encouraged to give every section equal sense of belonging.

But, Mr. Alaje was not happy over the government’s allocations to education and health sectors, describing them as disappointing.

“Allocation for education is far less than 10 per cent, which is below the minimum 26 per cent of the budget recommended by UNESCO. The Federal Government has not demonstrated leadership.

“The Minister of Health was encouraging commissioners of health in the 36 states of the federation to give minimum 15 per cent of their states’ budget to health.

“Meanwhile, the federal budget allocated less than one per cent to health. It showed that the federal government does not practice what it preaches,” Mr. Alaje said.

Besides, he faulted the government for setting its economic growth projections of 2.19 per cent in the Medium Term Expenditure Framework, MTEF and Nigeria Economic Growth Plan, NEGP, below the global average of 3.2 per cent in 2016 and 3.5 per cent in 2017.

For the Chief Executive, Global Analytics Limited, Tope Fasua, making reference to “Budget of Consolidation,” was not correct, rather it should be called “Budget of mediocrity”, when compared to the budget of some African countries.

“Nigeria economy is supposed to be the biggest in Africa. But, we are the lowest, both in per capita budget figures and in absolute terms. Nigeria is in the middle among South Africa, Algeria, Egypt and Angola.

“This year, South Africa is budgeting about $116 billion, against Nigeria’s $23 billion, despite being the highest appropriation ever. Angola is doing $124 billion; Algeria $53 billion and Egypt $40 billion.

“What it shows is that successive Nigerian governments have not been dreaming. Not enough revenue is being generated, yet we are one of the most profligate countries in the world. We should be budgeting about N30 trillion,” Mr. Fasua said.

“With 2018, pre-election year, a lot of monies would be required by politicians for campaigns and other activities. This might either bring a supplementary budget to drive growth, or an increment in the debt profile beyond the N2trillion presented in the budget,” he noted.

In his view, the Chief Executive of Pan African Development Corporation, Odilim Enwegbara, described the revenue targets set by government as unrealistic, particularly from the Nigerian Customs, in view of several import duty waivers granted by government, declining importation of finished consumer goods and porous borders causing snuggling.

Mr. Enwegbara, who criticised the country’s current 6 per cent tax rate, against minimum average rate of between 15 and 20 per cent for VAT among peer economies, said the government should urgently consider increasing its tax rate, to grow the economy and make local producers more competitive.

“The government should urgently find ways to drastically reduce the recurrent portion of the budget, which has continued to grow at geometric progression, against capital expenditure growing at arithmetic progression.”

One of the ways to reverse the trend, he pointed out, was to raise the country’s tax-to-budget ratio, which he said was the lowest among peer economies in Africa.

He expressed satisfaction with the government’s new debt management strategy, to increase external borrowing and reduce domestic debt and force down interest rates, especially with alternative financing to small and medium enterprises, SMEs by the Central Bank of Nigeria, CBN.

For the Lead director, Centre for Social Justice, CENSOJ, Eze Onyekpere, President Muhammadu Buhari’s early presentation of the budget to the National Assembly in accordance with section 81 of the Constitution of the Federal Republic of Nigeria 1999, as amended, was a welcome development.

Mr. Onyekpere criticised the entire budget outlay, arguing that although the total N8.612 trillion “appears high in Naira terms,” it actually amounted to a “paltry $28.24 billion.”

He said when the figure was divided by the country’s population of 180 million people, the budget would translate to per capita federal expenditure of N47,844.44 only.

Besides, he said plans to improve further the Ease of Doing Business; tax administration; productivity of agriculture and reduction of the food import bill, as well as sustenance of the Social Investment Programme, were commendable.

He frowned at the poor implementation of the capital budget for 2017, with only N450 billion, or 20.70 per cent of the total capital vote of N2.174 trillion released to ministries, departments and agencies before the end of the financial year.

The recurring deficit and dependence on sovereign debts to finance key infrastructure and budgetary provisions, Mr. Onyekpere said was as a result of government’s refusal to activate key domestic resource mobilisation mechanisms to harness the people’s resources and energy for development.

On revenue, he said expected revenue from oil would pose a major challenge for the revenue framework, with projected oil production capacity of 2.3 million barrels per day, MBPD considered unrealistic, in view of recent figures of 1.9mbpd figure the 2017 half year.

He noted that about N512 billion provided as expected recoveries in the second quarter of 2017, as well as proceeds from restructuring government’s equity in joint ventures and other sundry incomes, should only be appropriated ”after they were actually realised.”

 

PREMIUMTIMES

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