Former Vice President, Alhaji Atiku Abubakar has picked holes in the proposed N13.08 trillion 2021 budget, saying it contravenes the provisions of the Fiscal Responsibility Act, FRA.
Atiku, who served in Olusegun Obasanjo administration as the Vice President said in a statement he signed and made available to newsmen on Friday that the budget is capable of stiffening growth and expansion of the nation’s economy next year.
The statement read: “The budget deficit in the proposal is ₦5.21 trillion. This amount is just over 3.5 per cent of Nigeria’s 2019 Gross Domestic Product, GDP. “This is 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.”
He said further, “Nigeria had a GDP of approximately $447 billion in 2019. Three per cent of this amount is $13. 3 billion, which at the current official exchange rate of ₦379 to $1, gives you a figure of ₦5.07 trillion. So clearly, the budget deficit of ₦5.21 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.”
The statement continued: “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 ₦5.21 trillion budget deficits is actually far above the 3% threshold stipulated by the FRA.
“That this escaped the notice of the Buhari administration shows a glaring lack of rigour in the formulation of the Budget; a very disturbing development. READ ALSO: COVID-19: UK in record recession after economy shrinks by fifth
“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. Is it sustainable when our budget makes almost as much provision for debt servicing, as it does for capital expenditure?
“As such, I call 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. To do otherwise will not only be unpatriotic, it will also be catastrophic for our nation’s economy.”