Economy
SOUTH-West residents have expressed mixed feelings on the workability of the N20.5 trillion 2023 national budget, recently presented to the joint session of the National Assembly for consideration by President Muhammadu Buhari.
They made the assertions on Monday in separate interviews with the News Agency of Nigeria (NAN) in Ado-Ekiti, Osogbo, Ibadan, Ilorin, Abeokuta and Akure.
NAN recalls that Buhari, had on Oct. 7, presented the 2023 Budget with the theme: “Budget of Fiscal Sustainability and Transition”.
The budget, being the eighth and final budget of the current administration, is designed to achieve the strategic objectives of the National Development Plan 2021 – 2025.
The spending outlays was stuffed with a deficit of N10.77 trillion of 52.5 per cent of the total expenditure.
The president said that this amount would be derived through new borrowing, privatisation proceeds and drawdowns on bilateral and multilateral loans, secured for specific development projects/programmes.
While some of the respondents expressed worry over the high deficits and debts burden dotting the 2023 proposed budget, others said that government has a huge task ahead in implementing the budget to the letter.
Also, some of the stakeholders commended Buhari-led administration for the increased budgetary allocation to health sector.
In his reactions, Dr Peter Fadipe, a retired Finance Director, Federal Ministry of Education, said that serious conversation about a sustainable model for education funding, which had suffered untold calamity, should now begin for the N20.5 trillion budget proposal.
Fadipe said he expected that the issue of the recent prolonged strike by the Academic Staff Union of Universities (ASUU) should have been wholesomely addressed in the budget.
This, he said, was required as repeated trends of such strikes in the past had dealt devastating blows on the sector and succeeded in compounding the rot in the academic system.
According to him, states alone cannot bear the burden of financing university education, while undergraduates, who will be leaders of tomorrow, stayed at home for a very long time over inadequate funding of education.
He said that the development ought to have attracted increase in budgetary allocation, compared to what was presented.
A Financial Consultant, Chief Moses Afejua, who also works with the Premium Konsult, said his worries were based on the absence of explanation about the provision of more than N6 trillion for fuel subsidy in the 2023 Budget proposal.
Also, Mr Martins Afolabi, a banker in one of the new generation banks in Ado-Ekiti, expressed worries over the high deficits and debts burden of the proposed 2023 budget, which, he believed, could further cripple the country’s economy.
Afolabi said it was more worrisome that the revenue side of the budget was doubtful, if Nigeria was to meet the target of N1.6 million barrels of oil per day, in view of illegal oil bunkering ravaging the oil producing states.
“But, I am particularly worried about the high budget deficit; a deficit of N10.78 trillion is quite high and debts servicing of over N6 trillion is worrisome,” the banker said.
He, however, commended President Muhammadu Buhari-led administration for restoring the federal budget calendars and as well by sustaining the budgetary cycle of presentation every October.
The banker said that this would go a long way to guarantee the January to December budgetary cycle.
Another analyst, Chief Amos Ogundele, also a retired Financial Director, said a look at the budget showed that N20.5 trillion proposed expenditure by the Federal Government to run the economy, reflected the huge need that existed in critical sectors of the economy.
Ogundele said the proposed budget, which was 19 per cent higher than the 2022 budget, would expectedly take effect from January 2023 to address economic growth, fiscal sustainability and security.
“In reality, we do not have a N20.51 trillion spending plan on the table; we only have a N14.21 trillion spending plan,” he said.
Ogundele said that the proposed revenue of N9.73 trillion does not reflect the peak revenue performance of N6 trillion in 2021.
On the contrary, he was of the view that the nation needed to tow the line of massive equity financing, saying that Nigeria should, henceforth, use equity financing as an exclusive way of funding budget deficits.
Ogundele said there was need to invest more in infrastructure and critical port reforms to reduce bottlenecks in export logistics and processes that would boost non-oil production and exports.
Besides, he said the nation also needed to immediately start blocking revenue leakages by curbing oil theft, pipeline vandalism and trimming excessive fuel, power, gas and forex subsidies, as well as massive tax and duty waivers.
In his contributions, Dr Michael Oke of the Department of Banking and Finance, Ekiti State University, Ado-Ekiti, urged the Federal Government to ensure full implementation of the budget.
Oke decried a situation where only N9.73 trillion, less than half of the N20.5 trillion budgeted expenditure, was the expected revenue, while N10.78 trillion was expected to be borrowed.
The expected deficit, he said, would put pressure on the workability of the budget.
Oke, however, said that effective implementation of the budget and political will of the government should positively impact the various sectors.
Pointing out the lingering precarious security situation in the country, he said that the deteriorating educational institutions and health sector, among others, needed urgent government’s attention in the budget.
Another financial expert in Osogbo, Mr Adewale Tijani, commended Buhari for the proposed budget, which he said, was about N3 trillion higher than the N17.13 trillion budget of 2022.
Tijani said that government had factored in inflation into the proposed budget, decrying the huge amount set aside for debts servicing.
He said from the proposed budget, about N2.5 trillion was voted for defence and security, which was higher than the 2022 vote of N2.41 trillion.
Tijani, however, commended Buhari for giving defence and security priority, saying the fight against insurgency was far from over.
He observed that the N1.17 trillion allocated to health sector was the highest ever in recent times, showing a significant increase from the N826.9 billion allocated to the sector in 2022.
The N228 billion allotted to Agriculture and Rural Development, he said, was, however, too small, considering the food inflation ravaging the country.
Tijani said the government should have voted more money to agriculture to tackle food insecurity, adding that the flooding being experienced in major parts of the country was a pointer to food scarcity in 2023.
According to him, another challenge in the agriculture sector is that real farmers do not get or benefit from the numerous government’s grants and agriculture subsidy programmes, while agriculture dividends were often politicised.
Tijani said he was worried about the N1.07 trillion voted to education, noting that with the demands of the Academic Staff Union of Universities (ASUU), the budget might not be able to clear the rots in the education sector.
Also, an economist, Mr Samuel Atiku, said the proposed 2023 budget required a huge task to implement due to the dwindling economy.
Atiku, who is also a Public Policy analyst and Technical Coordinator at the International Budget Partnership, said the budget was the biggest amount ever presented by any president in the history of Nigeria.
“The budget is predicated on revenue to be generated in 2023. l believe the government must be planning to sell some assets or look deep into some places to meet up with the huge deficit that comes with it.
“If government is planning to spend N20.5 trillion and its projectory revenue is N5 trillion, then, they will have to look elsewhere for N15. 5 trillion,” he said.
Atiku said the 2023 projectory showed that government would have to borrow more money to finance the budget and in return, yielding to an increase in inflation.
According to him, such inflation will bring about high cost of living, which will affect some key sectors of the economy at large.
The need for accountability framework, he said, was sacrosanct to enable government to own enterprises and manage its own resources judiciously in order to get more revenue.
The economist noted that the budget, if implemented, would have positive impact on some sectors of the economy and on the populace at large.
Atiku, however, said it would take a strong political will to ensure that the budget was well utilised for the purpose for which it was being sourced.
Another financial expert in Ibadan, Mr Sola Famakinwa, said that the proposed 2023 budget would impact on various sectors of the nation’s economy.
“Mr President presented a deficit budget to the National Assembly, where expected expenditures are far more than the revenue.
“The difference will be sorted by borrowing from external and internal. But, this will result to increase in debts servicing and inflation rate.
“It will make a negative impact on the economy,” he said.
Famakinwa, however, said that if the government could be sincere and transparent in its policies, there would be positive turnaround.
“The money realised and borrowed can be used to develop agriculture and infrastructure such as electricity, health, education; create more jobs, fix refinery and security.
“These will bring positive impact on the economy,” he said.
Also, Prof. Jesse Otegbayo, Chief Medical Director (CMD), University College Hospital (UCH), Ibadan, appreciated how the health sector got the highest allocation, probably for the first time in many decades, with over a trillion naira.
Otegbayo, however, prayed for enough cash backing and proper management of resources to make the budget one that would be of great impact, not just on the health sector, but on the entire nation.
Commenting, Prof. Gbolagade Lameed of the Department of Wildlife and Ecotourism Management, Faculty of Renewable Natural Resources, University of Ibadan, said that budgetary allocation to any sector should be in correlation to the sector’s contribution to the nation’s economy.
Lameed, a former Head of the Department, said that adequate attention should be given to the tourism sector, because of its benefits to national economy.
According to him, in other developed nations, large chunk of budget is allocated to the sector, because the return will be in ripple and multiple effects.
“There are lots of touristic centres in the country such as national parks, beaches, grooves and other monuments that need financial support for development in different perspectives.
“If this can be done, coupled with conducive political and security vantages, tourism will attract huge number of foreign exchange as well as local tourists that will in turn, add significantly to the national economy,” he said.
Lameed urged government at all levels to give proactive attention to tourism as a major source of revenue, saying this could be done if more attention was shifted to its development.
In her views, Prof. Funmilola Ajani of Tourism and Environmental Management, University of Ibadan (UI), says amount allocated to tourism did not reflect any step or process toward making up for the challenges responsible for Nigeria’s poor showing in the tourism world.
This, Ajani said, was in spite of the great potential in terms of tourism resources.
According to her, Nigeria may not be able to unlock the vast economic contribution from tourism with the current budgetary allocation in which more than 85 per cent is for recurrent expenditure.
“Our budgetary allocation should be fully anchored around providing resources toward implementation of our national tourism plan.
“At the present rate, it will take Nigeria 70 years to achieve a journey of seven days in terms of tourism development,” Ajani said.
She, therefore, called for an increment in the budgetary allocation to the sector to make more impact.
In Ilorin, Dr Sa’ad Abdullahi, acting Dean, Faculty of Pharmaceutical Sciences, University of Ilorin, called for increase budgetary allocation to the nation’s health sector, in line with the global goals.
Abdullahi observed that the proposed revenue and expenditure budgets are N9.73 trillion and N20.51 trillion respectively and the largest (nominally) in Nigeria’s history.
He analysed that the sum of N1.09 trillion allocated to the health sector, accounts for 5.4 per cent of the total budget, which is actually, an improvement from the N0.71 trillion budgeted in 2022 fiscal year.
The acting Dean, however, said it was significantly lower than the benchmark of the World Health Organisation (WHO) to allocate at least 15 per cent of the annual national budgets to health.
He said that the 5.4 per cent was also lower, compared to South Africa’s 11.9 per cent expenditure on the health sector.
According to him, Nigeria is one of the countries that pledged to increase its annual health budget to at least 15 per cent way back in April 2001.
He regretted that the nation had failed to meet this target for over 20 consecutive years, adding the closest it ever came to the target was 6.0 per cent in 2012.
Abdullahi noted that Nigeria’s health sector got 4.8 per cent in 2019; 4.1 per cent in 2020; 4.5 per cent in 2021 and 4.3 per cent in 2022 fiscal years.
“The country has not even been able to allocate half of the expected 15 per cent in the 21 years after making the pledge. Yet, a look at our health’s profile shows that Nigeria has one of the lowest life expectancy rates in the world.
“It is also among the worst five, globally in infant mortality rate, maternal mortality rate and HIV-infections.
“Health, as a key input to the Sustainable Development Goals (SDGs) and healthy populations, is equally fundamental to the spirit and pursuit of the 2030 Agenda.
“Achieving health and well
being (SDGs 3) depends on the progress in other SDGs, such as Ending Poverty (Goal 1); Access to Education (Goal 4); Gender Equity (Goal 5); Reducing Inequality between and within countries (Goal 10), and Promoting Peace (Goal 16).
“It also relies on adequate services and resources, including infrastructure (Goal 9), Food Security and Agricultural Production (Goal 2); Decent Work (Goal 8), Sustainable Consumption (Goal 12), Provision of Water and Sanitation (Goal 6) and Access to Energy (Goal 7),” he said.
According to him, increasing the budget allocation to health is critical, if more domestic resources are to be garnered for financing universal healthcare coverage.
“Thus, despite the increase in the budgeted amount of approximately N1.08 trillion and N1.09 trillion for education and health respectively, over last year’s allocations, the sums are still significantly low compared to standard practices and other emerging countries.
“As a matter of fact, one is tempted to say that as from next year, the chunk of our national budget should go to education and health for the next 10 years.
“The truth is that without a strong commitment to these two sectors, Nigeria may never recover as a country; that is why Nigeria remains unchanged in terms of the Human Development Index (HDI) with a score of about 0.535,” he said.
The dean noted that this put the country in low human development category, positioning it at 161 out of 189 countries and territories.
In his view, an Ilorin-based legal practitioner, Mr Debo Adeyemo, called on the Federal Government to demonstrate good leadership skills and discipline in ensuring proper implementation of the 2023 budget.
According to Adeyemo, budget becomes ‘mere paper work’ when it’s not properly and fully implemented.
“Budget can only be implemented when there is leadership discipline. There is need on the path of the leaders to be focussed, truthful and prudent.
“There is need to follow up to execute the projected plans. Implementation is key to any budget,” he said.
Contributing, a lawyer, Mr Musa Ibrahim, described the N470 billion allocated for revitalisation and salary enhancements in the nation’s tertiary institutions, as not enough.
Ibrahim said he expected much for the sector as Nigeria’s education was gradually loosing value and collapsing,
describing education as key to success and one that should be prioritised by any serious government.
“Education sector should be prioritised as we cannot pretend as if everything is going on well in the sector.
“Invest in the sector and see a rapid development in all aspects of the country’s economy.
“As for me, education should, even take half of the budget every quarter, that N470 billion should have been doubled,” he said.
A resident of Ilorin, Mr Shitu Suleiman, was optimistic that the budget was achievable, only with political will in place, baring the effects of COVID-19 and the ongoing Russia-Ukraine war on the global economy.
“The budget captured the necessary tools for the country’s growth and development. There is only need for political will to perfect it.
“The COVID-19 era was an unforgiven era. We are gradually recovering from the devastating effects. The budget, if implemented, will make the country better,” he said.
A stakeholders in the education sector, Hajia Fatimah AbdulRaheem, Proprietress of Ummy Nusira Memorial College, Ilorin, lauded the government for allocating N15.2 billion for Safe School Initiatives.
According to her, the Safe School Initiatives, has been the government’s gospel ever since Buhari got to office.
“As you can see, many public school students are benefiting from school feeding programmes and other new innovations to improve educational system in the country.
AbdulRaheem also described the 2023 Budget as a blessing for students and lovers of education.
“The 2023 budget shows the country is heading toward the right direction. It is a blessing for the future of Nigeria’s education.
“There is hope for our children and even, the out-of-school children. We are hopeful for better days ahead,” she said.
A cleric, Pastor Emmanuel Adeolu of the Christ Heals Church, Ilorin, said the 2023 budget reflected the reality of the country.
According to him, the budget will spell a new beginning for the future of the country.
“The budget, being the last in President Buhari’s administration, reflects the reality of the country.
“Education, security, economy and human development are well captured in the budget. We believe Nigeria will match to greatness,” he said.
In Abeokuta, Mr Akin Johnson, an Economist, commended the president for the timely presentation of the budget, saying it will ensure the return to the January to December budget cycle.
He, however, frowned at the idea of planning to finance the budget majorly with borrowing, particularly, when the nation is battling with reduced revenue, coupled with high doubts of ability to repay.
The economist also expressed concern over the benchmark of production of 1.69 million barrels of oil per day (mbpd), considering the issues of insecurity, oil theft and pipeline vandalism, particularly within the Niger Delta region.
“For the government to realise the expected revenue from oil production, it must take steps to address the corruption in the petroleum industry and vandalism of oil facilities,” he said.
In his opinion, Dr Kunle Ashimi, Chairman, Nigerian Medical Association (NMA), Ogun branch, commended the Federal Government for allocating N1.17 trillion to the health sector, which according to him, represents about 5.75 per cent of the budget proposal.
According to Ashimi, the amount is the highest to the sector in recent years.
He noted that the 2023 budget showed a significant increase from the N826.9 billion allocated to the health sector in 2022.
The chairman, however, explained that the figure still fell short of the 15 per cent advocated by the United Nations (UN) and the World Health Organisation (WHO).
“Allocating 15 per cent or more of the country’s budget to the health sector may not yet be realistic in Nigeria, because of our huge infrastructure deficit, but we hope we will get there soonest.
“The problems we have in this country is that most funds allocated to various sectors are diverted.
“Those in charge of this funds do not secure or ensure that they get the best out of the budget, without wastage, corruption and misappropriation of funds.
“The issue is that it is not how much money that is being budgeted or the percentage that is the most important, it is how much that actually goes into the projects that is important.
“To be fair, this amount can achieve good things for us in the health sector, if judiciously expended. Little or much can do a lot for the country, if the fund for this 2023 is used properly,” he said.
Ashimi advised the government to priotise the manpower needs of the sector among other at the implementation stage.
“The issue of doctors and nurses leaving the country is telling too much on the health sector, as the country is lacking health workers.
“It is very important that government should be able to pay good salaries that commensurate with the responsibilities and efforts of the health workers.
“The government also needs to create an enabling environment for them to work, through the provision of modern tools and equipment,” he said.
However, Prof. Kolawole Adebayo, Department of Agricultural Extension and Rural Development, Federal University of Agriculture, Abeokuta (FUNAAB), noted that the amount allocated for the agriculture sector, over the years, had never been a problem.
Adebayo explained that the major problem had always been about the amount released from the budget and the actual amount utilised for agricultural purposes.
He added that no matter the percentage earmarked or allocated to the sector, if the fund was appropriately used as intended, the nation would feel the impact.
“I think the challenge, over the years, had been that only about half of the allocated fund is often released, while less that that is often utilised for agricultural purpose.
“So, what we need to do is to start looking at budget performance over the years to be sure that what we intend to spend money on is actually what we are spending money on,” he said.
In his contributions, Prof. Sherifdeen Tella, a Professor of Economics, Olabisi Onabanjo University (OOU), Ago-Iwoye, noted that budgets in the past few years had not impacted significantly on Nigeria’s economy.
Tella said that the government hardly have money to spend on the capital aspects of the budget.
“There is slight increase in health and education in the 2023 budget, but they fall far short of expectations and recommended proportions.
“Health rose from 4.5 per cent to 5.2 per cent of the budget, as against 15 per cent recommended by the African Union (AU).
“That of education is also below 10 per cent of the budget.
“On agriculture, the allocation is also quite low, but the main problems there, are insecurity, subsistence method of farming and now, effects of flooding.
“Basically, like before, the budget will not impact on these sectors and invariably on the economy,” he said.
Tella strongly advised the government to ensure timely release of allocated funds to various sectors to make the budget impactful and be able to transform the economy.
Mr Abiodun Ogunjimi, the Secretary, All Farmers Association of Nigeria (AFAN), Ogun chapter, noted that budgetary allocation for agriculture could never be enough.
Ogunjimi stressed the need for governments to strengthen their monitoring and evaluation units to ensure that funds allocated to the sector do not end up in the pockets of “political farmers” in order to achieve set objectives.
The AFAN Secretary said that it was important for Nigerians and farmers to feel the positive impact of the budget.
On Information Communication Technology (ICT), a security expert, Dr Roy Okhidievbie, alleged that most budgets made in the country had continued to remain bloated proposals.
“Most of the budgets we make are bloated. Anytime you see that we make budget, even in that bloated budget, whatever is required to effectively implement the purpose is normally not up to half of what is budgeted.
“ICT and Technology is now a global norm and Nigeria is supposed to be running its own internet provision right now. We are supposed to have all our satellite covers, run our google, because Nigerians abroad are making waves in technology,” he said.
He added that the allocation of ICT in the budget should be made available and expended to avoid having what he called, a mere paper budget.
“Most things we spend money on and do manually, can be done technologically through ICT Upgrade, but the problem is that the industry is not friendly to the experts.
“Is the industry open to ideas? Is the policy flexible or rigid? Have we met the dynamics of the current millennium to be able to articulate the international and global standards?
“We need to be sure of what we want for our ICT to be able to make appropriate budget for it,” he said.
He also expressed concerns over the genuineness of vendors to be used in implementing the budget hoping they would be such with high pedigree in the ICT field.
In Akure, ASCI Daniel Aidamenbor, Public Relations Officer, NSCDC Ondo Command, said that the funding and full implementation of the budget would have positive effects on and improve security in the country.
Aidamenbor explained that budgeting had not, actually, been the problem in the security sector, but its implementation.
According to him, it is a plus for the government for giving security the highest vote in the 2023 budget.
“With our security seriously in grave and critical situation, what has been budgeted for security may presently look like a drop in an ocean.
“However, we are hoping and believing that if the present insecurity rate can reduced to 40 per cent by the time the budget will be implemented, then, the budget will have effect on the security.
“But, if the situation remains the way it is now, the budget will have no effect,” he said. (NAN)
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Tags: Amos Ogundele Martins Afolabi Moses Afejua Muhammadu Buhari Peter Fadipe
