2022 Budget: FG’s projections need amendments

By Adetunji Ayobrown
With a huge national debt profile consuming up to 80% of its yearly earned revenue, only an effective tax system can rebuild the Nigerian economy.
And that N8trillion budget is massive enough to drive Nigeria economic progress and that the 2022 budget as presented by the FG to the NASS needs amendment if optimal performance is to be achieved.
This and many more views were stated by Matthias Ofili Ugwudioha on a live programme addressing the state of the Nigerian economy and ways to its recovery.
The exchange rate is projected at N410.15 per dollar and Gross Domestic Product (GDP) growth rate of 4.2 per cent with 13 per cent inflation rate. 2022 proposed total expenditure was put at N16.39 trillion with a crude oil benchmark price of $57 per barrel and daily oil production estimate of 1.88 million barrels, inclusive of condensates of 300,000 to 400,000 barrels per day.
Total fiscal operations of the Federal Government expected a deficit of 6.26 trillion Naira. Representing 3.39 percent of estimated GDP, slightly above the 3 percent threshold set by the Fiscal Responsibility Act 2007.
Prof. Ofili from Nile University who is a development finance analyst holds PhD in Accounting and Finance, and also in Financial Management wondered why FG’s over engagement in unscrupulous borrowings.
Seen as the only means out of revenue scarcity, he said “Nigeria now has a huge national debts profile, so scandalous that it is consuming up to 80% of our national earned revenue. No country can ever survive on a policy like this”.
He said, “looking at this year’s budget for instance, FG is supposed to generate around N8trillion which should ordinarily be sufficient for the government in the year. But for the monthly consumption allowances of some executive and legislative members of government that is over thirty million naira”.
He said, “N8trillion budget estimate is big enough to drive Nigeria’s economic progress for a year. FG has no justifiable excuse, any to the contrary is not true. But when you become minister, senator or house of representative member, your monthly salary is juicy enough to pay the entire people in your constituency”.
He said “the economy of Nigeria does not reflect the projected reality of the GDP. Because most big companies in Nigeria had relocated to neighbouring countries while seeking a better enabling environment for their businesses”.
The inflation rate as projected by the FG 2022 budget is only possible if correct indices are used in its computation. But I can categorically tell you, it is not possible to achieve 13% inflation rate come next year”, he said.
He said, “though, it is achievable if it is aggregate inflation, but this is food and consumption inflation which today stands at 20.7%.
Considering the present economic indices and taking into perspective each sector of the Nigerian economy, agriculture for instance is not growing, instead it has gone down almost 100% over the years.
“Revenue is mainly generated from taxes and that is the norm world over. But considering our workforce population structure here, most Nigerians are artisans and because there are few or no companies while those few ones are struggling to survive.
But how do you tax, when companies are not making profits. FG should provide a business enabling environment which security happens to be on top of the list. Government should set up an environment which is supposed to be provided from budgets by the government.
And that beyond the COVID-19 pandemic that affected the entire world, Nigeria’s foreign direct investment has drastically gone down before then and now we can see that many world economies are back on track but where is ours.
He further said, “hungry man is an angry man. Hunger has been attributed to many bad things, because statistics have shown that they are not born but turned into criminals in order to feed and that they are impoverished by the system. That is the true issue without dressing only the surface. Prof Ofili declared.