Home News Economists Criticize Further Borrowing as Buhari Signs N21.83trn Budget

Economists Criticize Further Borrowing as Buhari Signs N21.83trn Budget

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Buhari Signs
Buhari Signs

By Uche Amunike

The disconcerting N67.7 trillion debt profile in Nigeria has made Economists criticize the plans made by the federal government to borrow another N10.78 trillion with which to finance the deficit in the N21.83 trillion 2023 budget as President Buhari signs it into law, in Abuja.

Speaking, during the signing of the final annual budget of the Buhari-led administration, President Buhari, through a statement released by presidential spokesman, Femi Adesina, stated that the aggregate expenditure of 21.83 trillion was topped with N1.32 trillion over the first Executive Proposal for the entire N20.51 trillion expenditure.

As President Buhari signs the 2022 Supplementary Appropriation Bill into law, he explained that it would enable his administration bring solutions to the problems caused by the recent floods that ravaged both infrastructural and agricultural sectors.

The non-debt recurrent expenditure amounts to N8,271,882,354,405 trillion while the total CRF charges amount to N2,150,882,322,038 trillion. While the total capital supplementation gulped N855,700,746,399 billion, N1,091,875,921,153 trillion was mapped out for Defense, while the total expenditure stands at N4,934,352,745,705 trillion.

Analytically, at least N4,495,111,346,991 trillion will be spent by the government on domestic debts, while a total of N1,814,759,620,336 trillion will be used to service foreign debts in 2023.

According to the statement, the Minister of Finance, Budget and National Planning will eventually give more details of the approved budget and the supporting 2022 Finance Act.

It partly read: ‘We have examined the changes made by the National Assembly to the 2023 Executive Budget proposal. ‘The amended fiscal framework for 2023, as approved by the National Assembly, shows additional revenues of N765.79 billion, and an unfunded deficit of N553.46 billion.’

‘It is clear that the National Assembly and the executive need to capture some of the proposed additional revenue sources in the fiscal framework. This must be rectified.’

‘I have also noted that the National Assembly introduced new projects into the 2023 budget proposal for which it has appropriated N770.72 billion. The National Assembly also increased the provisions made by Ministries, Departments and Agencies (MDAs) by N58.55 billion.’

As President Buhari signs the 2024 Appropriation Bill into law, after being passed by the National Assembly, his intent was to fast track its implementation since the imminent transition process to another democratically elected government was on course.

However, he made a call to the Minister of Finance, Budget and National Planning to engage with the Legislature to reconsider some of the changes made to the Executive budget proposal, while hoping that the National Assembly will synergize with the executive arm on this note, while also urging them to rethink their stand on his proposal to securitize his administration’s outstanding Ways and Means balance at the Central Bank of Nigeria (CBN).

Hear him: ‘As I stated, the balance has accumulated over several years and represents funding provided by the CBN as lender of last resort to the government to enable it to meet obligations to lenders, as well as cover budgetary shortfalls in projected revenues and/or borrowings.’

‘As I stated, the balance has accumulated over several years and represents funding provided by the CBN as lender of last resort to the government to enable it to meet obligations to lenders, as well as cover budgetary shortfalls in projected revenues and/or borrowings.’

‘I have no intention to fetter the right of the National Assembly to interrogate the composition of this balance, which can still be done even after granting the requested approval.’

‘Failure to grant the securitisation approval will, however, cost the government about N1.8 trillion in additional interest in 2023, given the differential between the applicable interest rates which is currently MPR plus 3% and the negotiated interest rate of 9% and a 40 year repayment period on the securitised debt of the Ways and Means.’

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