By George Samuel
Senators on Tuesday made divergent opinions on workability or otherwise of the proposed N13.08 trillion 2021 budget .
While most of the PDP senators who contributed to the debate , picked holes in the budgetary proposals , their APC counter parts said as bad as the situations on ground are , the budgetary proposals can still bring about required recoveries in various sectors of the Nation’s economy as anticipated by President Muhamnadu Buhari who christened the budget as one of ” recovery and resilience”.
First to speak was the Senate Leader, Yahaya Abdullahi ( APC Kebbi North) who veered off by describing those clamouring for restructuring of the country as people seeking for dismemberment of the country before addressing the budgetary proposals and projections .
” Mr. President distinguished colleagues, we are all witnesses to the cacophony of voices and opinions of some leading members of our society, our compatriots who out of genuine concerns, frustration, sense of entitlement or sheer political bravado, call for the dismemberment of this nation or for public disobedience through which they hope to bring down the government of the day, thereby truncating our hard won democratic journey.
“The constitutional reform process is there in the National Assembly to satisfy the earnings and aspirations of Nigerians for restructuring and reshaping our federation to make it an inclusive and all-embracing polity.
“We as Senators of the Federal Republic, should not contemplate the dangerous and destabilizing temptations of dismembering our federation.
“We must stand by the honour of our status, our convictions and our oath of office which is to preserve and protect the interest of Nigeria and Nigerians, as a whole.
“We are obliged to place the social and economic challenges we face today in their proper historical perspectives with a View to determining the best course of action for our people and our nation at this point in history”, he said.
Specifically , the Senate Leader on the budget proposals said
“It is important to note at the outset, that this proposal is not strange to the leadership of the National Assembly and the Committees of Finance and National Planning. All the parameters were discussed and agreed upon, at least in principle.
“What remains for us is to closely examine the contents and the details in order to sort things out and smoothen the rough edges.
A budget deficit of #5.19 trillion represents 3.64% of GDP and is therefore above the threshold set by the Fiscal Responsibility Act, 2007.
Even though the deficit is covered by N4.28 trillion of new borrowing and funds obtainable from privatization proceeds and multilateral and bilateral sources, it is important for our committees on Finance to raise the matter for the National Assembly to permit this increase, as specified in the extant law, particularly given the special circumstances which made this necessary.
“It is also important to note that a budget deficit of this size requiring more indebtedness is not healthy for the long-term development of the country, but this must be tolerated now because of the challenges of the times”.
The Senate Minority Leader , Enyinnaya Abaribe ( PDP Abia South), in his own contribution , tore the budget proposals into pieces by saying that the budget is nothing but old news .
“The 2021 Appropriation Bill proposes to spend N13.082 trillion, with expected revenue of N7.886 trillion and a deficit of N5.196 trillion. As with the other budgets over the last few years, it looks impractical and unimplementable.
“The major challenge, as with previous budgets, is with revenue and an overly optimistic revenue target. The 2021 budget hopes that the federal government will be able to generate almost eight trillion naira. If history is anything to go by, this projection looks impossible.
“This overly optimistic
position is not new in Nigeria but is part of a continuing pattern of false
optimism that has put the federal government’s accounts in the deep red and the country in dire straits.
“To demonstrate this point, the observers needs to look at the performance of previous approved budget revenues and what were achieved as actual
revenue.
” In 2016, Nigeria had an approved budget with a revenue of N3.855
trillion. By the end of the year, the total retained revenue was only N2.621 trillion.
” This performance was a 32 percent shortfall according to the budget
implementation reports. In 2017, instead of trying to readjust to the reality of a difficult revenue situation, Government of Nigeria repeated the same overly optimistic exercise. The approved budget had a revenue of N5 trillion while actual revenue that year was only N2.37 trillion.
“This performance was a
whopping 53 percent shortfall. In 2018, Federal Government of Nigeria
repeated the same thing by submitted a budget that expected revenue to
jump from N2.37 trillion to N7.165 trillion. By the end of the year, actual
revenue was only N3.48 trillion; a 51 percent shortfall. The story was the same in 2019 and 2020. In 2019 the revenue shortfall was 41 percent and so far in 2020 the shortfall is 38 percent.
“Here we are in 2021 and the submitted budget expects revenue to be N7.886 trillion. Based on the half year numbers, Nigeria would be lucky to realise N3.3 trillion in revenue in 2020 by the end of the year. Yet the Executive expects revenue to increase by over 200 percent in 2021.
“When the Executive announces a N13 trillion budget, the ministries and agencies take it as a signal that the largess can continue. A casual look at the Appropriation Bill contains items like SUVs for chief executives and fancy office buildings for agencies who really do not need them.
” All of these things will count as “capital expenditure” without adding much to the productive ability of the economy. At a time when the Executive is on the verge of a
serious fiscal crisis some of these proposed spending items are unnecessary.
“The budget betrays a lack of understanding of how modern economies function”.
The trend of disagreements continued when PDP Senators such as Ike Ekweremadu , Gabriel Suswam , Oker Jev etc made their presentations against workability of the budget .
Ekweremadu in particular , tackled the Senate Leader over his comment that proponents of restructuring are seeking for dismemberment of Nigeria .
He said the leader got it wrong and withdrew the statement on his behalf .
But other APC Senators like Aliyu Sabi Abdullahi , Orji Uzor Kalu, Uba Sani , Adamu Aliero, Ibikunle Amosun etc , expressed hope in the workability of the budgetary proposals .
Strongly defending the budget, the Chief Whip of the Senate , Senator Orji Uzor Kalu said, “Mr. President’s 2021 budget is in line with the challenges currently facing the nation. At this time our nation is regressing into recession due to the COVID-19 pandemic you will have no option than to borrow.
“Any economy where you have serious challenges you have to resort to borrowing but the President’s borrowing is being channelled to Capital projects that are on going in the North, South, East and West geopolitical zones of the nation.
Speaking further, Kalu asked , “How do you manage an economy during recession? What to do is to borrow and finance infrastructure like road projects, the 2nd Niger Bridge.
“I urge the leader of the opposition ( Abaribe) to appreciate what President Buhari is doing. For example in my constituency, Mr. President has just earmarked Twelve Billion Naira to cconstruct the Umuahia-Arochukwu Road. Do we expect him to print money to construct the road? Of course he has to borrow. So I want my colleague Abaribe to appreciate what this administration is doing, instead of saying that there is nothing new in the budget.
“There is a creation of 774,000 special public works which has been inserted into this budget, those are the kind of programmes that you need to cushion the effects of a distressed economy and you cannot cushion an economy without borrowing. Senator Abaribe is an economist and I want him to counter my submission, I will give him right to reply because we are not going to print special currency from the central bank , we have to result to borrowing.
“We should also understand that the borrowing is long term not short term borrowing. A long term borrowing facilitates the building of an economy and creates employment for the people.
” can also see sight of a lot of socio infrastructural programmes that has been inserted into the budget like the hundred billion for small industries and medium scale industries. We also have hundred billion emarked for Agriculture and healthcare . So I urge this Senate, that due to the challenges that we are facing, we must come out clearly and look into this budget carefully and implement this budget for us to make progress as a nation. Our economy cannot afford to collapse, our economy cannot have any other option other than growth. We must get the economy back to the part of growth. Mr. President and his team have done the right thing with this budget proposal, we must show solidarity by doing the right thing. Let us set aside our political party differences we must stand as Nigerians . It doesn’t matter if you belong to the All Progressives Congress (APC) or the People’s Democratic Party (PDP) we are all looking for the same thing which is “economic growth” and that should be our rallying point not playing politics we should be truthful in our deliberations and contributions. ” Senator kalu said
The debate continues Wednesday and Thursday this week.