The Senators who spoke across party lines, did not hide their reservations as they lampooned the entire budget proposal, even as many of them declared that the projections were not only unrealistic, but a budget that could be described as that which is enveloped in taxation and the level of poverty in the Country still very high.
While some of the lawmakers called for an increase in the oil price benchmark from $57 to $69 per barrel, some took a swipe at the present exchange rate of $305/ naira, saying it was not realistic The purpose of the debate on the general principle of the budget yesterday, was for the budget to pass through second reading, but debates will continue today as only sixteen Senators contributed to the debate yesterday, with twenty Senators to speak today. Recall that President Muhammadu Buhari had on Tuesday presented a total budget estimate of N10.33 trillion for 2020 Fiscal year to a joint session of the National Assembly. The 2020 Budget tagged ” Budget of Sustaining Growth and Job Creation” has a total budget estimate which is 1.4 trillion higher than that of 2019 which was 8.9 trillion naira.
***Debt service as a Percentage of Capital Expenditure is still high, GDP Ratio is too Small, the 2020 Capital Expenditure of N2.46 trillion, is paltry, Says Senate Majority Leader
The tone for the discourse was set when the Senate Majority Leader, Senator Abdullahi Yahaya, All Progressives Congress, APC, Kebbi North presented the bill for consideration, led the debate and he fired the first salvo Leading the debate, that “the Capital Budget to GDP Ratio is rather too small, (about 2% of GDP) “The injection of this amount is a mere drop in the ocean and Is incapable of stimulating the economy to higher growth, wealth creation and employment generation. “The projections of increased Oil Production averaging 2.18 million barreIs/day, in the medium term, are subject to very high risks that have had devastating consequences in recent times. Volatility, both at the international market and in the Niger Delta are factors that could make these expectations only tentative.”
The Senate leader who reviewed the allocation for capital development in the budget bill, said that “when viewed in terms of per capita, the 2020 Capital Expenditure of N2.46 trillion, is paltry” Senator Abdullahi who stressed that the projected high deficit of N2.18 trillion for 2020 was a direct function of the economy-wide revenue shortfalls, as well as the choice and cost of borrowing, said, “Government, particularly the collecting agencies, must improve on their collection capacity.
But to do this, there must be robust investments in the real sector so that it could grow to earn taxable revenues. “Debt service as a Percentage of Capital Expenditure is still high, while debt service as a Percentage of Revenue should be diminishing. The Senate leader at the end of the day in his presentation advised the Federal Government to dedicate itself to raising more revenue by investing in the real sector to grow the economy and boost employment and productivity;broadening the tax base in order to capture more revenue sources;improving our transparency and reduce pilferage by intensifying the drive against corruption; and and ensuring that there is security for economic operators, both local and foreign.”
Speaking further, the Senate Majority Leader who lampooned the Central Bank of Nigeria (CBN), said “The continued pursuit of CBN’s restrictive Monetary Policy in the face of a clear economic necessity to reflate the economy, particularly by ensuring cheap money to power the real sector of the economy, is still baffling. “I have, on the floor of this chamber, repeatedly called for the realignment of the country’s monetary and fiscal policies to ensure the right structural momentum in the economy “
*** 2020 Budget is that of Taxation, assumptions of the budget proposals completely unrealistic, Abaribe When it was time for him to speak, Senator Minority Leader, Senator Enyinnaya Abaribe, Peoples Democratic Party, PDP, Abia South who hailed the majority leader, said he made his job as the leader of opposition very easy. Abaribe who described the 2020 Appropriation Bill as that of taxation, stressed that it was contradictory that President Buhari could talk about job creation when he had failed to invest in what should create jobs, adding, “Debt servicing as a component is higher than capital expenditure.
According to him, the budget assumptions of the budget proposal were completely unrealistic. The Minority leadership who noted that the projected growth as read by the President was 1.9% less than the population growth of 2.6%, said, “So if you look at it globally we are still struggling that is why I was very happy when the senate leader said we may have to take over and redirect the economic policy of this government having seen that the executive has not done anything”
According to Abaribe, the budget assumptions of the budget proposal were completely unrealistic, just as he said that the Appropriation Bill was a budget of taxation based on 7. 5 per cent VAT and other increases. Abaribe said, “The fact is that this is not a sustainable budget, the fact also tells us that where we are going if we need a change we must be able to look at the critical fundamentals of this budget speech and make adjustments.”
*** Exchange Rate Unrealistic, VAT should be introduced if for the Common Man, Alimikhena In his contribution, Chairman, Senate Committee on Customs, Excise and Tariff, Senator Francis Alimikhena, APC, Edo North who noted that no budget was free of criticisms; said that the projected Exchange rate was not realistic, just as he said that even the CBN cannot get the realistic rate, adding that Nigeria as a country needed more money and that if the CBN fixes the rate, there will be more money to the country’s coffers. Senator Alimikhena said that he would hail the increase in the Value Added Tax, VAT, if it will block leakages and the proceeds, will be for the Common Man, adding that Ministry of Works should be able to carry out serious work on projects with the money available to it, especially the completion of Okene- Auchi- Benin Road to serve the people of the South-South.
*** 2020 Budget is Very Ambitious, Suswam
On his part, Chairman, Senate Committee on Power, Senator Gabriel Suswam (PDP-Benue North-East) who described the budget as very ambitious as intended to address the infrastructural deficit, said that the economy had contracted to a level that the senate needed to critically address some very “germane and pregnant issues. “Along with the appropriation submitted by the President, was s financial bill and that bill has five thematic areas. ” I am worried about the area that talks about revenue. I am worried about that because Value Added Tax (VAT) that had been moved from 5 per cent to 7.5 per cent is one of the sources that we tend to raise revenue, finance critical areas of education and the health sector. ” In the same budget that we propose 2.93 Gross Domestic Product Growth, we have also taken these policies, policies that will further contract the economy. “This is because if we say that VAT will be moved from 5 per cent to 7.5 percent, the exemptions from the VAT are small because most of the aggregate economic activities are small business enterprises.”
Suswam who explained that most of the small business enterprises would be unable to address the issue of 7.5 per cent VAT, said, “7.5 per cent VAT is on the high side and has exempted mostly food items.” On the sectoral allocations, Suswam who noted that the money for the education and health was insufficient, said that to address infrastructure from a holistic point of view, “outside of roads and power; education and health should have also been enhanced.” *** Allocation to Power, Works, Housing Shows that the FG is serious, Barau Jibrin In his contribution, Chairman, Senate Committee on Appropriations, Senator Barau Jibrin, APC, Kano North said that the sectoral allocation of N262 billion to Works and Housing and Power, N127 billion showed that government was serious in providing the necessary infrastructure to drive and sustain the economy.
According to him, the government was serious to actualise its long term objective of diversifying the economy. *** Job is now for Us to make Necessary Adjustments, Revenue generation must be emphasised, not at the expense of ordinary Nigerians, Ekweremadu In his contribution, former Deputy President of the Senate, Senator Ike Ekweremadu, PDP, Enugu West who noted that he was pleased with the emphasis on road sector development and the marginal increase in allocation to Human Rights Commission, said, “These are indeed very commendable steps. “The President has done his best by presentation of the Appropriation Bill pursuant to Section 81 of the Constitution. Now the job is left with us to consider and make appropriate adjustments. ” We cannot blame the President or anybody else to fail in this responsibility of adjusting the proposal where necessary. Once the budget is passed, the rest is implementation.” According to him, in order to ensure full implementation of the budget, revenue generation must be emphasised and certainly not at the expense of ordinary Nigerians. Ekweremadu who noted that there was the need to block all leakages, said, “I am happy that the Federal Government is now clear on their position on IPPIS that Federal Government agencies on the civil service of the federation must be captured under IPPIS.” He further said that there was the need to show more interest in mineral sector development, adding, “We need to remove so much emphasis on oil and gas and see what we can do to take advantage of all the deposits of solid minerals in our country.”
No comments: