ATIKU Abubakar, a former Nigerian Vice President has asked President Muhammadu Buhari to withdraw the 2021 budget proposal which he presented to the National Assembly on Thursday for consideration and passage into law.
Ahmad Lawan, Senate President had already assured Buhari of a quick passage of the budget but Abubakar, in a statement he personally signed on Friday, said the proposed 2021 appropriation bill should be recalled and revised for contravening provisions of the Fiscal Responsibility Act, 2007.
Buhari proposed N13.08 trillion total expenditure for 2021. Total federally distributable revenue for 2021 is estimated at N8.433 trillion, while the total revenue available to fund the budget, including grants and aid of N354.85 billion as well as the revenues of 60 Government-Owned Enterprises, is estimated at N7.886 trillion.
The N5.21 trillion deficit in the 2021 budget, representing 3.64 per cent, is to be financed with new borrowings amounting to N4.28 trillion.
Described as a budget for ‘Economic Recovery and Resilience’, the proposed 2021 appropriation bill is based on an estimated oil price benchmark of 40 dollars per barrel, daily oil production estimate of 1.86 million barrels (inclusive of condensates of 300,000 to 400,000 barrels per day) and an exchange rate of N379 per dollar. Oil revenue is projected at N2.01 trillion and non-oil revenue is estimated at N1.49 trillion.
A total of N3.12 trillion was earmarked for debt servicing in 2021, rising with about 50 per cent from the sum of N2.1 trillion allocated for the same purpose in 2020.
However, although some experts had already raised concerns over Nigeria’s public debt stock, with the country certain to sink deeper into debt with the planned N4.28 trillion new borrowings that will fund the 2021 budget deficit, Abubakar weighed in on the matter with an unusual call for the withdrawal of the budget.
“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,” the former Vice President said in the statement entitled ‘2021 budget proposal contravenes Fiscal Responsibility Act, by Atiku Abubakar’.
Arguing his case for the withdrawal of the budget, Abubakar said the proposed 2021 appropriation bill gave rise to a number of ‘very grave and perhaps disturbing issues’.
Specifically, he noted that the N5.21 trillion budget deficit amounted to just over 3.5 per cent of Nigeria’s 2019 GDP, and thereby contravening provisions of the Fiscal Responsibility Act, 2007.
The Fiscal Responsibility Act, 2007, provides in Part II, Section 12, sub-section 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”.
Abubakar added, “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 N379 to $1, gives you a figure of N5.07 trillion. So clearly, the budget deficit of N5.21 trillion, as announced by President Muhammadu, is above three per cent of our GDP and is therefore in contravention of the Fiscal Responsibility Act of 2007.”
“Even more disturbing is the fact that our 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. Meaning that in actual sense, the N5.21 trillion budget deficit is actually far above the three per cent threshold stipulated by the Fiscal Responsibility Act,” he observed.
The former Vice President, who lost the 2019 presidential election against the incumbent, Buhari, of the All Progressives Congress (APC), while contesting as the candidate of the Peoples Democratic Party (PDP), expressed concern that the Buhari-led Federal Government could not spot the violation of provisions of the FRA, 2007, in the proposed 2021 budget.
He also used the opportunity to knock Buhari for engaging a series of borrowings that had dragged the country into massive debt. Nigeria’s debt stock has risen from N12.12 trillion in June 2015 to N31 trillion ($85 billion) as of June 30, 2020, according to data from the Debt Management Office.
The amount includes N11 trillion external debt stock, and N19 trillion domestic debt portfolio.
The country’s debt stock is certain to continue rising with the new borrowings planned to fund the 2021 budget deficit.
Hitting Buhari for not taking provisions of the FRA, 2007, into consideration in the preparation of the budget, Abubakar said, “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.”
The former Vice President went ahead to caution the National Assembly against raising the threshold of the budget deficit to a higher figure, an action which they are entitled to take by virtue of provisions of the FRA, 2007.
Should the National Assembly exercise the power, Abubakar argued that they would only be serving the interests of the Buhari government, and not that of the nation.
He said, “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 per cent 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?”
Abubakar was Vice President of Nigeria from 1999 to 2007, during the presidency of former President Olusegun Obasanjo.
Although he has not formally declared his intention to contest in 2023, all indications suggest that Abubakar, who has contested in all elections since Nigeria returned to democratic rule, would run for president again in the next general election.
One of his sons, Adamu Atiku-Abubakar, said Abubakar will contest for the number one office in 2023, and PDP National Chairman, Prince Uche Secondus, had said the floor is open for the former vice president to seek the party’s presidential ticket, once again, for the next election.
In what appears to be a calculated move to water the grounds for another bid for the presidency in 2023, Abubakar has, of late, been speaking out on most national issues.
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