Some Nigerian Senators are questioning the parameters and fiscal assumptions set by President Muhammadu Buhari in the 2020 budget proposal, which he presented to the National Assembly on Tuesday, saying the figures cannot sustain the Appropriation Bill.
Specifically, the Senators queried the projected 2.93% Gross Domestic Product growth rate, which the President said is expected to be driven largely by non-oil output, as economic diversification accelerates. According to the Senators, that assumption was unrealistic.
Also, the lawmakers questioned the increase of the VAT from 5% to 7.5%, saying it was faulty because the country lacked viable businesses to enhance revenue generation.
The Senators also faulted the debt service in the 2020 budget which is estimated at N2.45 trillion, saying it could throw the country into increased borrowing.
The lawmakers on Wednesday took turns to debate the 2020 appropriation bill. The bill is for an Act to authorise the issue from the Consolidated Revenue Fund of the federation a total of N10.33 billion, as presented by Buhari has passed second reading in Senate.
Buhari had presented the 2020 budget to a joint session of the NASS on Tuesday in which he announced increase in VAT to 7.5% from 5%, an estimated GDP of 2.93%, and N8.155 trillion estimated revenue generation, as well as a debt Service of N2.45 trillion, among others.
While some lawmakers say the 2020 budget will consolidate the nation’s infrastructure deficit to bear on economic performance, many said the appropriation bill will only create more economic woes for the country, instead of proffering lasting solutions.
Leading the debate, Senate Majority Leader, Yahayah Abdullahi, raised the alarm that the budget could only be better achieved if the economic structure was strengthened.
According to him, the need to raise the country’s revenue bar was imperative, noting however that it required an urgent legislative action and collaboration with the executive arm of government to achieve it.
“I think NASS should look into the economic structure. This country is on the brink and what we are doing is raising the alarm to tighten our belts to drive the economy to a higher level and to raise the revenue bar,” he said.
Senate minority Leader, Enyinnaya Abaribe, who faulted Buhari that the 2020 budget does not have a tag like the previous ones, however said, “this is simply a budget of taxation”.
He frowned at the President’s assumptions in the budget to create jobs without putting in place practical measures to achieve job security.
“Like the previous budgets, this budget (2020) does not have a tag. This is nothing but a budget of taxation because the budget is only based on 7.5% increase in VAT. Also, the federal government is talking about creating jobs without putting in place things that will create jobs. The 2.1m barrel per day is presumptuous and not sustainable. This is not a sustainable budget, Abaribe said.
However, in his contribution, Senate Deputy Whip, Sabi Abdullahi insisted that the 2020 budget has a name tag which is to consolidate infrastructural deficit.
He posited however that to sustain rapid economic growth, the small and medium enterprises (MSEs) must be enhanced to play a key role in doing business and generating revenue.
For Senator Gabriel Suswam (PDP, Benue North East), the entire economy of the country had contracted and if the 2020 budget must be achieved, the Senate should quickly evolve proactive legislative ways to improve revenue generation.
He faulted the budget deficit and said borrowing to fund budget was detrimental because the debt service would also jump, which would not be sustainable.
“I am worried about revenue because VAT is increased from 5% to 7.5% and the 2.93 GDP growth is not achievable because the country is dominated by small enterprises and the 7.5% VAT is simply outrageous.
“The N2.4 trillion debt service in the budget is higher, compared to the 2019 budget. To service debt, borrowing will increase and the debt service will increase which will not sustain the budget,” Suswam said.
He further observed that priority was not given to health and education sectors in the 2020 budgetary allocation, insisting that if the country was ready to reduce poverty and create welath, money should be pumped into these sectors.
As more than twenty senators were given opportunity by Senate President, Ahmad Lawan, to debate the budget, there were concerns that reactions of some of the Senators, particularly the PDP, who seriously queried the 2020 budget, were politically motivated.
But the Senate spokesperson, Adedayo Adeyeye, in an interview with our correspondent said the parliament was democratic and that the lawmakers are protected by law to air their different perspectives.
“We are in democracy and when you have parliamentary democracy, cross-fertilization of ideas is allowed and everybody has the right to look at things from different perspectives, depending on the background and where they come from.
“Of course, all those that contributed made reasonable contributions and so, while some look at the budget as not sustainable, majority of us look at it as a budget that is realistic and also sustainable,”Adeyeye stated.
