In its eight-year reign, the Muhammadu Buhari administration budgeted N93.45 trillion (2016 to 2023 budgets). But 72.1 percent of that figure, amounting to N67.4 trillion, was committed to recurrent expenditure, leaving 27.9 percent for capital spending on infrastructure in health, works, education and other sectors.
Recurrent expenditure includes salaries, emoluments and allowances of public officers and civil servants.
On the debt side, the administration inherited a portfolio of N12.12 trillion as at 30th June 2015, but the Debt Management Office reports that the figure was N42.84 trillion by end of June, this year, which is an increase of 253 percent.
President Muhammadu Buhari’s first budget was N6.061 trillion in 2016, but it heralded Nigeria’s first recession under the administration.
The budget was increased to N7.44 trillion in 2017, N9.1 trillion in 2018, N8.916 trillion in 2019, N10.8 trillion in 2020, N13.6 trillion in 2021 and N17.17 trillion last year. The 2023 estimates presented to the National Assembly last Friday put the figure at N20.51 trillion.
DMO says Nigeria’s debt rose by N30.72 trillion between July 2015 and June 2022. The country’s total debt as of 30th June 2015 stood at N12.12 trillion. By 30th June 2022, the figure had risen to N42.84 trillionn, which showed an increase of 253.47 percent. Despite the high increase in debt over the years, the government still plans to borrow N8.4 trillion in 2023.
There has also been a huge increase in expenditure budget in this dispensation. The Federal Government has increased the projected expenditure in its annual budget by about 238.45 percent between 2016 and 2023.
According to data from the Budget Office of the Federation, the government budgeted to spend N6.06 trillion for the 2016 fiscal year. However, in the recently proposed 2023 budget, the projected aggregate expenditure was pegged at N20.51 trillion, more than thrice the amount budgeted in 2016.
In the 2023 budget, the government’s N17.12 trillion projected expenditure consists of N6.9 trillion recurrent expenditure, N5.9 trillion capital expenditure and N3.9 trillion for debt servicing. Statutory transfers amount to N744.11 billion; non-debt recurrent costs, N8.27 trillion; personnel costs, N4.99 trillion; pensions, gratuities and retirees’ benefits, N854.8 billion; overheads, N1.11 trillion; capital expenditure, N5.35 trillion, including the capital component of statutory transfers; debt service, N6.31 trillion; and sinking fund of N247.73 billion to retire certain maturing bonds.
Despite the huge allocations, however, the budgets have failed to trickle down to the productive sector of the economy.
Saturday PUNCH gathered that Nigerian manufacturers had slashed their investments by 56 percent in the last seven years, reflecting a sector buffeted on all sides by poor policies and economic headwinds.
Between 2016 and 2021, manufacturers’ investments tumbled from N489.44 billon to N217.22 billion, according to data collated by the Manufacturers Association of Nigeria.
“How many companies in our sector are still in operation? Wempco has shut down; WAHUM is struggling, and the rest are just there. When we come for meetings, we will not be more than 11″, the Chairman of Qualitek Industries, Mr Oluyinka Kufile, who is a major player in the aluminum and steel sector, said.
Kufile attributed the situation to a combination of poor policies, arguing that Nigeria had yet to understand its true direction in economic diversification.
The Nigerian economy has witnessed two recessions within the period – one fuelled by a foreign exchange crisis and the other by COVID-19 pandemic. But the responses of the federal and state governments to issues of the economy have been poor, according to analysts.
Insecurity has worsened over the period and the foreign exchange crisis has reached its crescendo with the Naira-to-US Dollar exchange rate rising from N197/$ toN430-N442 in the official market over the period. A US dollar sells for N735 – N745 at the parallel market.
According to the Deputy President of the Lagos Chamber of Commerce and Industry, Mr Gabriel Idahosa, the situation is caused by poor foreign exchange and weak policies. He urged the government to eliminate subsidies and create a more convivial environment.
Credit: Sunday PUNCH
