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• How FG can reduce poverty with N27.5 trillion budget implementation – Economists
• N9.92 trillion non-debt recurrent expenditure, others worrisome – Ex MAN boss
• Devt expert queries source of expected N18.32 trillion
• ‘FG showing bad example by shunning Nigerian goods’
From Merit Ibe, Lagos and Ogbonnaya Ndukwe, Aba
Economists, business analysts, development experts and members of the Organised Private Sector, among others, have expressed mixed feelings on the proposed N27.5 trillion 2024 Budget of Renewed Hope presented to the National Assembly by President Bola Tinubu earlier in the week.
In its analysis, the Lagos Chamber of Commerce and Industry (LCCI), expressed concern that relative to Nigeria’s GDP size, the proposed budget is 12.2 per cent, which is very low compared to its African peers. This, it said, is a serious issue that needs to be addressed by the government, in the light of its renewed hope agenda.
Dr Chinyere Almona, Director-General of LCCI, opined that government must improve on its budget performance in terms of capital expenditure in 2024. She said over the years, the performance of the capital expenditure has been very low relative to the recurrent expenditure, with implications for the country’s infrastructure sector.
The LCCI boss further recommended that particular attention must be paid to investing more in transport infrastructure to mitigate the high cost of fuel and resolve the many logistical challenges that have impacted the movement of goods across the nation.
“Looking beyond oil revenues, government must build investors’ confidence and enhance our forex earnings through non-oil exports. We need to invest more in export infrastructure through automation and implementation of critical port reforms to reduce the bottlenecks in our export logistics and processes.” For Frank Onyebu, immediate past chairman, Manufacturers Association of Nigeria (MAN), Apapa branch, the non-debt recurrent expenditure of N9.92 trillion is very high. “If you add this figure to the projected debt service of N8.25 trillion you have a total of N18.17 trillion out of a total budget of N27.5 trillion.
“This constitutes more than 66 per cent of the budget, which leaves only N8.7 trillion for capital expenditure. These will be part-funded by a deficit of N7.83 trillion.” He emphasised on the need to cut back on the cost of governance “but this government doesn’t appear to be impressed with this call. It is important that we all understand the gravity of the situation we face at this point in time and take necessary measures. It is imperative that the government leads by example.”
He said on the revenue side, government needs to expand its tax net by bringing in more people into the tax bracket instead of overtaxing. The manufacturer supported the idea of private sector involvement in development, which he said will boost the economy. He said the emphasis on a stable macro-economic, business friendly environment with due regard to private investment is commendable.
A development expert, Dr. Nathan Owhor noted that there are clear indications in the budget presentation to create jobs, reduce poverty, ensure security, enhance human capital development, contain rising domestic prices, lower cost of doing business, ensure value for money, greater transparency and accountability as well as engender macro-economic stability.
He however pointed out that the major challenge in the past has been the disconnect between policy and implementation. But he is hopeful that things will change with the new administration. “In any domestic economy, private sector investment will always accelerate socio-economic development. This is given especially when the investment is in some critical sectors of the economy like energy, communication and transport infrastructure amongst others. “These sectors have the capacity to enhance manufacturing, trade and businesses with its attendant positive impact on the well-being of citizens.”
An SMEs expert and member of the LCCI, Daniel Dickson-Okezie, decried a situation where about 45 per cent of expected revenue is spent on debt servicing. “I have issues with the expected revenue of about N18.32trillion. The question is where is the revenue coming from? We have never gone up to N10 trillion expected revenue in our previous budgets, and over-optimistic revenue projection will lead to further borrowing, which may be in the usual way of taking foreign loans or ways and means from the Central Bank. The expected revenue of N18.32 trillion in my view is on the high side.” He decried the present situation where companies are overtaxed, which has led to many closing shop and relocating.
“From the high estimated revenue which is about 18.32 trillion, we hope government is not just relying on heavy taxation as it is obvious the government is banking so much on increasing taxes. If you tax businesses beyond what they can give, obviously they will leave. Now, the cost of living is beyond what everyone can handle. Purchasing power has been eroded. The people that will buy what those businesses will produce don’t have the capacity to buy. That is the effect of excessive taxation.”
Dickson-Okezie viewed that for this budget to work, the country has to first diversify the economy. He commended the projections and estimate in the area of agriculture, but noted that if the political will is not there to implement the budget on defence, there won’t be security for farmers to go back to farms and for people to leave IDP camps and go out to do business. “This will also affect getting raw materials input for manufacturers and other businesses.” He also lamented that the government was not implementing the ‘buy made-in-Nigeria order’ which could create more jobs if executed.
“How can the government create jobs when it must have bought about 10,000 SUVs all imported? They do not want to patronise made in Nigeria goods. How can they encourage local industries and create employment.”
He tasked government to have the political will to follow up and implement the budget. “You want to create jobs; no improvement in power supply, you are not patronizing made in Nigeria goods, you import everything. It’s not feasible. The manufacturing companies and SMEs are closing shop due to unfriendly environment of doing business. There is absence of verifiable action plans to revive the manufacturing sector, agriculture, energy, health, education sectors. We hope the government will walk the talk and do things that will not inhibit what they tend to achieve.” National President of Nigeria Association of Economists (NAE), Prof Innocent Eleazu, in his reaction, said that any budgetary proposal in the country without serious plans on revamping dilapidated national infrastructure to enable diversification into non-oil sectors as foreign exchange earners was bound to fail. He said government should hands off directly running the economy, rehabilitate and fix electricity power supply, make flexible conducive environment for businesses to get established as is the case in neighbouring countries to attract investments.
“As we speak today, the issue is not in making proposals, rather we should look into those areas like epileptic power supply. Nigeria should fix it, repair the roads which is a very important sector in economic management, and to fix the perennial congestion of goods at the ports.
“Let me tell you, I do not foresee the end of Nigeria’s infrastructural problems in the near future, with the attitude of those in government presently. It doesn’t end with writing and presenting a budget proposal. “Government should ask itself why many multinational corporations closed their factories in the country and moved to neighbouring countries like Ghana. The answer is very simple. The President of the African Development Bank (AfDB), Dr. Adewumin Adesina, summed it up on why manufacturing companies are leaving Nigeria for Ghana as lack of reliable electricity and congestion in Nigerian ports. He also mentioned poor infrastructure especially roads which are discouraging and making business difficult for investors.”
Speaking in the same vein, President of African Association of Micro, Small and Medium Enterprises (AAMSME), Ambassador Darlington Kalu, said that over the years, Nigeria’s problems have been hinged on non-implementation of annual budgets and development plans, whether short-term, mid-term or long-term. Kalu said in addition to that, diversion of funds meant for infrastructural development or upgrade by those that should handle the implementation stages was also a major reason budgeting at all levels of government, national, state and local councils, were now seen as annual rituals, and not taken seriously.
“Those that are supposed to manage our budgets, have been seen to connive with politicians to divert funds meant for specific developmental projects, leaving such needed infrastructures to be included in subsequent ones and from there form conduits for the managers. “Priority areas like providing funds earmarked in the term projects, including soft loans for small scale businesses are left to continue suffering, despite the authorities making pronouncements to encourage their stay in business. “We welcome the presentation of the N27.5 trillion budget proposal but would want actual implementation leading to putting back decayed infrastructure into good working order and updated ones whose capacity has been outgrown, diversifying into non oil sectors productive economy. This is our request. MSMEs should be aided to continue in business, that is the heartbeat of every nation that wants to grow to become an industrial giant.” Chief Jerry Okechukwu Kalu, President of the Aba Chamber of Commerce, Industry, Mines and Agriculture (ACCIMA), when contacted, said he was yet to see the budget contents, so as to determine what it portends for the business sector. Kalu, however challenged those that will look into its sectoral proposals, make recommendations where necessary and get them approved to be mindful of the current needs of the people, to come out with implementable policies to move the country forward and cushion the effects of hardships being suffered by Nigerians.
