2021 Budget Proposal Contravenes Fiscal Responsibility Act – Atiku

2021 Budget Proposal Contravenes Fiscal Responsibility Act – Atiku

Former Vice President, Alhaji Atiku Abubakar has said the 2021 Budget proposal placed before the National Assembly by President Muhammadu Buhari on Thursday, October 8, Contravenes Fiscal Responsibility.

Atiku said a number of issues, “very grave and perhaps disturbing” arise in the budget proposal.

“I could bring up several of them, but for the sake of its direness and consequence to our economy, permit me to address one very important issue” Atiku wrote.

“The budget deficit in the proposal is ₦5.21 trillion. This amount is just over 3.5% of Nigeria’s 2019 GDP. This is contrary to the Fiscal Responsibility Act of 2007, which provides in Part II, Section 12, subsection 1 that:

“Aggregate Expenditure and the Aggregate amount appropriated by the National Assembly for each financial year shall not be more than the estimated aggregate revenue plus a deficit, not exceeding three per cent of the estimated Gross Domestic Product or any sustainable percentage as may be determined by the National Assembly for each financial year”.

The former Vice President said Nigeria had a GDP of approximately $447 billion in 2019. Three percent (3%) of which amount is $13. 3 billion, which at the current official exchange rate of ₦379 to $1, gives a figure of ₦5.07 trillion.

He said it is clearly that the budget deficit of ₦5.21 trillion, as announced by President Muhammadu, is above 3% of our GDP and is therefore in contravention of the Fiscal Responsibility Act of 2007.

“Even more disturbing is the fact that our GDP has fallen sharply from its 2019 figures, and has been projected by the World Bank and other multilateral institutions at somewhere between $400 billion and $350 billion.

“Meaning that in actual sense, the ₦5.21Trillion budget deficit is actually far above the 3% threshold stipulated by the FRA”.

Atiku said for government not to take cognizance of the above, the Buhari administration shows a glaring lack of rigour in the formulation of the Budget.

He explained further that the deficit shows the precarious state of the national finances, which have since been overburdened by excessive borrowing on the part of the Buhari administration.

“It has not escaped my attention that the Fiscal Responsibility Act of 2007 makes provision for the National Assembly to raise the threshold of the budget deficit from 3% to a higher figure”.

“However, if this is done, they will be serving this administration’s interests, not Nigeria’s, because the Act says that such a threshold must be sustainable. Is it sustainable when our budget makes almost as much provision for debt servicing, as it does for capital expenditure?”

“As such, I call on the President, to recall this budget, and recalibrate it to reflect the provisions of the Fiscal Responsibility Act of 2007, and the current economic realities of the nation”.

“To do otherwise will not only be unpatriotic, it will also be catastrophic for our nation’s economy”.