Worried Over Poor 2022 budget Performance, BudgIT Tasks FG On Uncritical Borrowing, Oil Theft

BudgIT,  Nigeria’s a foremost civic-tech organization engaged in leading advocacy for transparency and accountability in the country’s public financial management, wants Nigerians, Civil Society Organisations, the media, organized private sector, the international community, and reformers to join the call for the Federal Government to discontinue indiscriminate borrowing through Ways and Means, saying it creates a ballooning set of interest payments, running parallel to the external debt, as well as increasing the money supply and creating more monetary volatility.

It also wants the government to “check the oil theft that is now commonplace in the petroleum industry, and has encumbered the country’s ability to meet its production quotas- the latter having fallen to 1.25 million barrels as at May 2022;  ramp up the remittance of operating surpluses by MDAs and GOEs to boost FGs independent revenues which is currently underperforming, and take considered action to reform subsidy, this achieves the twin objectives of having citizen buy-in and revenue savings that are channelled into priority areas.”

In the statement by Iyanu Fatoba, its acting Head, Media and Communications, BudgIT said factors such as the 2022 being a pre-election year, the growing fiscal threat posed by subsidy payments and the debt service-to-revenue ratio; will negatively impact Nigeria’s budget credibility, cripple service delivery in critical social sectors of the economy and impede needed investments in productive sectors, thereby stunting economic growth.

BudgIT expressed worry, particularly at the poor fiscal performance of the federal government’s 2022 budget and the rising subsidy payments, especially the debt service-to-revenue ratio which has reached alarming levels at N1.94 trillion between January and April this year, representing over 100% of the nation’s N1.64 trillion revenue within the same period.

This, BudgIT noted, was needless, coming earlier than the target set by the International Monetary Fund (IMF) long before now that Nigeria would be spending over 100% of its revenue on debt service in 2026,

It recalled its consultation memo of February 2022 titled:Leveraging Budget Reforms for Economic Development”, which “articulated several reform issues bordering on Nigeria’s public financial management regime that affect the very core of governance, separation of powers, expenditure efficiency, and the livelihoods of millions of Nigerians; 83 million of whom live in extreme poverty.”

Four months later, it lamented further, “some of those same challenges exist, with additional ones that-if not properly managed, spell fiscal crisis for an already impoverished nation.”

In particular, it stressed, “the debt service spending is only N93.6 billion less than the combined total personnel and capital expenditure for the period under review.

“Also alarming are the expenditure targets for the Tertiary Education Trust Fund (TETFund), which have only been 15% (of the total N5.10 billion) for the period under review.”

It further lamented how the fortunes of Nigeria, the most populous black nation on earth, have worsened in the last eight months after the 2022 budget was passed, quoting Gabriel Okeowo, its Country Director, as saying “despite being confronted with a myriad of challenges ranging from: the five-months and counting ASUU strike which has crippled Nigeria’s tertiary education; to an 13-month high inflation of 17.7% which has pushed millions of more Nigerians into poverty;  a drastic decline in Nigeria’s oil production which has displaced Nigeria as Africa’s biggest crude oil producer;  a massive increase in the country’s petroleum subsidy liabilities (which has crowded out investment in critical areas of the economy, obliterated federal transfers to subnational units, and skyrocketed the country’s debt to over N41.6 trillion); a complete breakdown of law and order in several cities across the federation, which has encumbered the inflow of foreign direct investments and increased the cost of doing business; Nigerians are waiting with bated breath for the national budget to begin to bring about the relief and positive change it was claimed to have harboured.”