2021 Budget: Can It Engender Economic Revitalization?

The 2021 Appropriation Budget has been passed. The legislature has taken into cognizance the gross infrastructural deficits existing in the country, thereby increasing the budget by 505 Billion. While many may frown at the amount budgeted for statutory transfers, the 2021 budget is at a critical point where critics, industry players and analysts are holding a pitchfork to dissect the dimensions of opportunities it offers.

PriceWater Coopers, a leading consulting and advisory firm has noted in a recent official document that the 2021 Appropriation budget is ‘expected to create the enabling environment and infrastructure for businesses to thrive and stimulate economic activities’. The document also noted that government is willing to increase its focus on ‘taxation and fiscal policy’.

Read Also: 2020 BUDGET: Performance Level in Lagos State to Rise at 86% by Fourth Quarter

This is also reflective of the recent drive of the Federal Inland Revenue Service (FIRS), as well as several Youth Support Programmes that aim to grow the economy through an economically responsible and obligatory populace.

In other words, the Buhari Government intends to invest in Youth Empowerment Projects, Agriculture, Infrastructure among others, in order to build a relationship of trust with the people, so that they can easily pay their taxes voluntarily or without cutting corners. The government realizes that the greatest asset it has is the people and as long as it intends to diversify its economy from the current pegs on a fluctuating oil price index, it must rely on pooling together taxes from corporate, blue collar and white collar economic activities as well.

2021 budget

The economy has been adversely affected by the COVID-19 Lockdown, it has led to a depressing recession; the most debilitating in 13 months. This is heightened by growing and true concerns of budget deficits and rising debt of the country. Therefore, President Mohammadu Buhari was apt when he tagged the 2021 Appropriation Bill as Budget of Economic Recovery and Resilience. This hints that President Buhari and his economic team considered the scarcity of resources, the inherent economic risks caused by border control, government investment in programmes and infrastructure, among others.

When President Buhari was presenting the budget at the National Assembly, he said ‘ I fully understand the difficulties many of our people are going through with the implementation of our reform agenda. However, the measures we are implementing are necessary for sustainable public finance, better allocation of our scarce resources and improved public service delivery’.

This shows that Buhari also understands that the emergence of COVID-19 among other factors have placed a lot of people in the middle income bracket under crushing financial circumstances. And he responded appropriately: ‘As we implement these reforms, social safety nets will be implemented to cushion the effect of the most vulnerable of citizens as well as business owners’.

Nigeria still relies heavily on the international market rate of Crude Oil. The government had pegged its 13 trillion budget based on a $40 per barrel rate. It envisages to produces at least 1.86 million barrels of oil, inclusive of other valuable oil extractions or condensates. The Nigerian legislature and the Executive seem to agree that the Naira is competitive and stable enough to remain at the current rate of N379 to a dollar, when it is being sold at N380 at the central bank, and N477 at the Black Market. This perhaps hints that government will continue to subsidise the NNPC or give foreign exchange concessions to the NNPC so that the nation can meet its benchmarks in order to funds its fiscal needs.

While the Federal Government intends to engage the Petroleum Industry Bill, it continues to straddle between engaging the NNPC as both a regulatory body for the Petroleum Sector, and an emergency distributor of Petroleum products across the country. The ball is therefore in the court of the National Assembly to quicken the passage of the PIB so that the twin elements of confidence and investment can be bolstered in the industry. The KPMG, in its analysis of the budget proposal noted that the PIB will engender growth, local and international investments as well as accountability in the Oil Sector.

Nevertheless, experts have also noted that earmarking funds for ongoing projects in Lagos-Ibadan-Kano Line, Abuja-Kaduna Line, Portharcourt-Maiduguri Line and Itakpe-Ajaokuta- Warri Line, shows that government has no intention to abandon these projects, which was the corrupt culture of previous governments. It is clear that the Buhari government is interested in been heard, seen and felt not just by words but by visible and impressionable infrastructural developments that will give room for business activities with effortless ease in the country.

The Rural Electrification Projects is also a laudable project that the government intends to continue. The project is budgeted to improve and empower rural communities thereby stemming the tide of rural-urban migration. This project is also intricately linked to the drive of government to lift 100 million people out of poverty in the next ten years. With the Rural Electrification Project, government would have fast-tracked its establishment of economic systems which would naturally stem from the ingenuity of the locals. The KPMG added to the above facts that the budget has included Social welfare programmes and employment opportunities across the 774 local government areas of the state.

2021 budget

The government further intervened through the budget to pay out debts owed to contractors, so that trust and a good national outlook may be maintained with national and international contractors. In the past, Nigeria has assumed an outlook of a government that reneges on contractual agreements. A good example is the P&ID gas project that was bedeviled by corruption and has cost the federal government a lot in legal fees. In order to avoid such happenstances, the Federal Government has put in place strategic funds to meet its contractual obligations within the budget. This will enhance the investment in long-term capital projects in the country. Senator Jubrin and his colleagues in the Senate must have critically discovered that largely the 2021 budget could usher in a new lease of life for all. He said “Our infrastructure decay has been on the increase. I am very much impressed with the way and how this Budget has addressed our problems. I want to support and to urge my dear colleagues that we pass this budget.”

Nevertheless, this can be scuttled by corruption and general indiscipline, a situation that was quite common among MDAs in the past. It can also be frustrated by the spate of insecurity in the country as quality infrastructure, policy drives, and empowerment programmes are only suitable for people who live in secure communities and environments.

Femi Morgan

Categories: Features

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