Director-General of the Budget Office, Ben Akabueze, on Monday said the Federal Government may not be able to fund the nation’s huge pension liability, as the N2.3tr deficit in the 2017 budget is inadequate.
Speaking at the first ever National Assembly Joint Public Hearing on the 2017 Appropriation Bill, he urged the legislators, as a way out, to increase the size of the budget deficit to enable the country borrowing more and accommodate pension funding.
Expressing regrets over the plight of pensioners in the country, Akabueze assured that the Muhammadu Buhari administration is making effort to offset arrears in the new scheme, adding that the situation was made worse last year when the National Assembly approved N50.195bn as contributory pension scheme, almost 50% less than the N91.914bn requested in the 2016 Appropriation Bill prepared by the Federal Executive Council.
The need to raise the budget deficit in 2017, he said is buttressed by the fact that “last month, N400bn was shared by all tiers of Government and salaries obligations still couldn’t be met,” he stressed.
Declaring the three-day parley open, Senate President Bukola Saraki, expressed belief “that the public budget, if well-crafted and implemented, remains the most potent fiscal policy instrument of government in delivering socio-economic benefits in an all-inclusive manner; and, the best way to achieve this is to ensure that all stakeholders are made a part of the decision-making process especially as it relates to the provision of public services and distribution of social benefits.”
Nigeria’s economic challenges, he continued, ranging “from low government revenues, shortages in foreign exchange supply, and slowdown in economic activities to rising unemployment and cost of living,” are well-known as everyone is affected in one way or another.
“With key economic indicators heading south, there is no better opportunity to reset the fundamentals of our economy,” he continued, following which the various NASS committees are objectively reviewing the planned expenditures, especially as it relates to its feasibility and relevance in delivering the broad objectives of the budget.
Saraki listed the objectives of the 2017 budget to include: pulling the economy out of recession; investing in the Nigerian people; and laying the foundations for a diversified, sustainable and inclusive growth.
The Senate President lamented that although the government “has made efforts to ensure that provisions in the Budget proposal aligns with the arching goal of pulling the economy out of recession and laying the foundations for diversified growth, certain provisions are clearly off the path. The Budget must address the critical issues setting back our national growth and development.”
He assured that the National Assembly, while supporting government’s economic recovery and growth effort, “will ensure that proposed projects and programmes, and their estimated expenditure are in sync with government’s priorities.
“Beyond that, we will also ensure that, in line with the amended Procurement Act, a sizable part of the capital expenditure is retained within the country as Government patronizes “Made-in-Nigeria”.
Experts at the seminar included former Deputy Governor of Central Bank of Nigeria (CBN), now chief executive of CEPER, Obadia Mailafia, who noted that at the point the nation’s slipped into a recession, an army of experts should have been assembled by the Federal Government to monitor all key sectors of the economy.
He warned that the Naira, which has already crossed the N500/$ mark at the black market, will continue to plunge further until we are bold in economic policies, infrastructure & monitoring. #BudgetHearing
Lessons for Nigeria today, Mailafia said is that recessions and financial crises derive from complex sources, just as uncertainty remains a real challenge, warning that recessions can trigger financial crises and political upheaval.
There is therefore the need for a structured budgetary process that ensures rapid recovery, besides the imperative for an economic stabilization, in addition to a stimulus package which is vital to the recovery process.
This, he continued, is in addition to the need for stronger micro and macro-prudential regulations, lamenting that the collapse of Nigeria’s economy actually “started from the railway collapse.”
Also making a presentation at the summit, Professor Nazif Abdullahi Darma of the Department of Economics, University of Abuja, spoke on the key challenges of national planning and budgeting in Nigeria.
He expressed regret that every government fashions its own economic policies, without bothering to review the past for continuity, or even a coherent framework for economic growth and development.
No wonder, he stressed, there are “abandoned projects all over the country running into over N5tr (for which) nobody has been prosecuted.
“Development will continue to be elusive as long as there’s no collaboration in infrastructure/projects btw the Federal and State government.”