Following the recent submission of 2014 budget to the National Assembly for passage, the Lagos Chamber of Commerce and Industry (LCCI), a strong advocacy group, has faulted the Federal Government’s devotion of N712 billion to debt servicing alone.
According to the chamber, the amount meant that 70 percent of total capital expenditure for the year is spent on outstanding debts, a phenomenon not in tune with national development priorities of the time.
In a statement signed by Remi Bello, president, LCCI, the chamber said allocating N663.6 billion to domestic debt interest payment as well as N48.4 billion to foreign debt payment was not good for an emerging economy.
“In an economy with a huge infrastructure deficit, poorly funded institutions and poverty incidence of over 65 percent, spending an equivalent of $4.6 billion on interest payment in one year is difficult to justify,’’ he said in a statement made available to BusinessDay.
“It is instructive as well that the debt service appropriation is equivalent to 712 percent of the capital vote for the works ministry (N100bn); 2455 percent of capital budget for transport ministry (29bn); 1548 percent of capital vote to health ministry (N46bn); 2034 percent of capital vote to agriculture ministry (N35bn),’’ he said.
The chamber also faulted the structure of this year’s budget which devotes 76.3 percent to recurrent expenditure, while allocating merely 23.7 percent to capital expenditure, saying such could infuse low infrastructure investment, weak competitiveness and productivity of enterprises as well as wasteful spending and corruption as recurrent expenditure were generally more susceptible.
“The chamber is concerned that in the past couple of years, an increasing proportion of the nation’s resources are being committed to recurrent spending, which is also a reflection of higher consumption spending as against investment expenditure,’’ he said.
“This fiscal structure is certainly not in the best interest of the economy and not consistent with the objective of job creation and inclusive growth. The National Assembly would therefore need to address the relativity of recurrent and capital expenditure proposals,’’ he noted.
The chamber called for closer examination of items such as refreshments and meals, foodstuffs and catering, travels, honorarium and catering as well as welfare, repair and maintenance for expenditure quality assurance purposes.