2021 Budget Proposal Contravenes Fiscal Responsibility Act – Atiku Says
BY AMOS DUNIA, ABUJA – Former Vice President Atiku Abubakar has picked holes in the 2021 Budget proposal presented to the National Assembly by President Muhammadu Buhari on Thursday, stressing that the deficit in the budget clearly shows the precarious state of our national finances, which have since been overburdened by excessive borrowing on the part of the administration.
Atiku therefore called on President Buhari to quickly 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 that to do otherwise will not only be unpatriotic, but catastrophic for the nation’s economy.
In a statement he personally signed, Atiku, who was the presidential candidate of the Peoples Democratic Party (PDP) in the 2019 election, said that looking at the 2021 Budget Proposal placed before the National Assembly by President Buhari, a number of issues, very grave and perhaps disturbing issues arise.
Atiku said that he could bring up several of them, saying that but for the sake of its direness and consequence to the nation’s economy, he would only address one very important issue.
He specifically said that the budget deficit in the proposal is ₦5.21 trillion, adding that the amount is just over 3.5% of Nigeria’s 2019 GDP.
Atiku stressed that 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 continued; “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.
“So clearly, the budget deficit of ₦5.21 trillion, as announced by President Muhammadu, is above 3% of our GDP and is therefore in contravention of the Fiscal Responsibility Act of 2007”.
The former Vice President also said that even more disturbing is the fact that the nation’s 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.
He explained that this means that in actual sense, the ₦5.21 trillion budget deficit is actually far above the 3% threshold stipulated by the FRA.
According to him; “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.
“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% 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,” he counseled.
