2017 Budget: Expert wants FG to make debt profile public
An Economic expert, Mr Eze Onyekpere, on Sunday in Abuja, called on the Federal Government to make public the nation’s debt profile.
He said that letting Nigerians to know the size of the country’s debt was necessary give the N1.84 billion allocated to debt servicing in the 2017 Budget passed by the National Assembly on Thursday.
Onyekpere, who is the Lead Director, Centre for Social Justice, told the News Agency of Nigeria (NAN) that dedicating such a huge amount of money showed that the country was indeed, heavily indebted.
It would, however, be recalled that the Minister of Finance, Mrs Keri Adeosun, recently debunked insinuations that the country’s debt was high.
She had at The Platform programme in Lagos explained said that the problem was not that Nigeria’s debt was “too high, but that its revenue was too low’’.
According to her, it is revenue you use to pay debt and our revenue in Nigeria right now is very low.
“Secondly’’, she said, “most of our debt matures between two years, and that means that the actual amount of interest we are paying is significant.
“What we are doing right now is refinancing most of that debt, especially those maturing within the next two years.
“We are also working on improving government revenue through tax.”
Onyekpere also expressed concern that the capital allocation to 10 key ministries as a percentage of debt service was 72.99 per cent while debt service was 84.49 per cent of the overall capital vote.
“Dedicating 24.73 per cent of the overall budget to debt service is an indication that Nigeria’s debt profile is becoming unsustainable.
“The capital vote of 29.30 per cent is just a little higher than debt service.
“With a deficit financing of N2.35 trillion, the debt service is about 36 per cent of our expected revenue. This shows that we may soon be back to the debt situation prior to the debt relief period,” he said.
On Statutory Transfer to the Health Sector, Onyekwere queried the non-compliance of the provision of section 11 of the National Health Act (NHA).
“Providing for the Basic Health Care Provision Fund being one per cent of the Consolidated Revenue Fund was ignored.
“The provision should have been in the sum of N47.59 billion.
“It is an act of callous insensitivity to the plight of poor Nigerians, particularly women and children, whose rights to life and health are violated on a daily basis,” he said.
The economist said that a benchmark oil price of 44.50 dollars per barrel of crude oil was close to the prevalent market rate of 47 dollars per barrel.
According to him, the revenue assumptions in the budget, which though not overtly optimistic, may not be realised based on prevalent economic realities.
“At this rate, the sources of funding of the budget may not fully materialise.
“Although the benchmark production rate of 2.2 million barrels per day is realistic, it is imperative to note that Nigeria is not yet meeting the benchmark as current production figures still fall short of the benchmark.
“Also, with an approved exchange rate of N305 to a dollar, the budget still insists on a fixation that is not in tandem with reality.
“The gap between the approved rate and what is obtainable in the market is still very wide.
“A differential between N380 to one dollar and N305 creates multiple exchange rates in one country,” he said.
Onyekpere also criticized the late approval of the 2017 budget, which was submitted on Dec. 14, 2016 by President Muhammadu Buhari.
He said also that the decision of the National Assembly to make details of its budget available to Nigerians was a welcomed development.
He said that no institution under a constitutional democracy had the right to spend public funds in a way and manner unknown to the public, which held the ultimate sovereign power.
The Appropriation Bill as passed was raised from N7.30 trillion proposed by the president to N7.44 trillion, indicating an increase of N143 billion by the lawmakers.
They provided N434.41 billion for Statutory Transfers, N1.84 trillion for Debt Servicing and N177.46 billion for Sinking Fund from maturing bonds.
Recurrent Expenditure got N2.99 trillion, Capital Expenditure, N2.18 trillion and provision of N2.36 trillion was made for Fiscal Deficit, with deficit to Gross Domestic Product (GDP) put at 2.18 per cent.
Highlight of the budget showed that Ministry of Power, Works and Housing received the highest fund of N586.54 billion, Ministry of Transport, N256.52 billion; Ministry of Education, N455.41 billion and Ministry of Health, N308.46 billion.