Alhaji Atiku Abubakar, the Presidential candidate of the Peoples Democratic Party, (PDP), in the last general election, has faulted the 2021 fiscal year budget presented to the National Assembly by President Muhammadu Buhari.
The former Vice President, reacting to the proposed budget, took to his facebook page saying, ‘Looking at the 2021 Budget Proposal placed before the National Assembly by President Muhammadu Buhari on Thursday, October 8, 2020, a number of issues, very grave and perhaps disturbing issues arise.’
He said, ‘I could bring up several of them, but for the sake of its direness and consequence to our economy, permit me to address one very important issue.’
He stated that, the budget deficit in the proposal is estimated at ₦5.21 trillion, and this amount is a little over 3.5% of Nigeria’s 2019 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 revealed that, ‘Nigeria had a GDP of approximately $447 billion in 2019. Three percent (3%) 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.’
This clearly means that the budget deficit of ₦5.21 trillion, as stated by President Muhammadu, is above 3% of our GDP and is therefore in contravention of the Fiscal Responsibility Act of 2020.
However, the concern is raised over the GDP, which has fallen rapidly from its 2019 figures and has been projected by the World Bank and other multilateral institutions at somewhere between $400 billion and $350 billion. This also means that the ₦5.21 trillion budget deficit is actually far above the 3% threshold stipulated by the FRA.
He reiterated that if this escaped the notice of the Buhari administration, it then shows a glaring lack of precision in the formulation of the Budget, which is a very disturbing development.
Alhaji Atiku proceeded by saying that, this deficit shows the hazardous state of our national finances, which have since been overwhelmed by excessive borrowing in the Buhari administration.
According to his statement, he said, ‘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% 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.’
‘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.’
Photo Credit: DailyPost and Twitter