• Friday, June 14, 2024
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BusinessDay

PDP targets N21trn deficit to stabilise economy by 2019

Dorherty, Dosunmu, others withdraw from Lagos PDP guber race

Nigeria’s ruling People’s Democratic Party (PDP), is proposing a budget deficit of no more than five percent of GDP annually, or an estimated N21.4 trillion total deficit over the next four years, in order to “guarantee macroeconomic stability”, if the party’s candidate and incumbent, President Goodluck Jonathan is re-elected at the March 28, 2015 polls.

BusinessDay estimates that the PDP plan would require financing a N4.3 trillion deficit, which is almost six times the N755 billion deficit currently in Nigeria’s 2015 budget proposal, before the National Assembly.

This continues to support our analysts’ consensus that a supplementary budget cannot be ruled out in 2015, irrespective of who wins the elections.

Recall that the opposition All Progressives Congress (APC) also outlined an economic plan with an estimated budget of  N8 trillion in 2015/2016 compared to the N4.46 trillion budget proposal for 2015.

The PDP Manifesto, outlines implementation strategies and targets across 30 segments of the economy.

“There are few things that are uniquely PDP”, says Lanre Adebayo, director-general at the People’s Democratic Institute (PDI) – the party’s policy think tank, where the manifesto was masterminded.

“There is a strong emphasis on partnership and the provision for monitoring and evaluation of the manifesto across all government levels of the party.

The target is people-centred and people-oriented.” Adebayo concluded on a phone interview with BusinessDay.

The manifesto proposes the development of the education sector by constructing and equipping at least one primary school in a community, one secondary school in a local government and one university in a senatorial district.

Mid-day meals for all students in the first nine years of schooling; 100 percent school enrolment target for boys and girls alike, as well as a 10 percent yearly drop in the adult literacy rate, are outlined in the manifesto.

Read also: Outdated broadband speed threatens FG’s penetration plan

The PDP is also promising free education for all in the first nine years. To cater for this, the manifesto proposes an expansion of the education’s share of budget to 15 percent (from current 11 percent).  This could cost an extra N177 billion yearly, at the current budget 2015 run rate.

On employment, labour and wages, the PDP proposes a review of wage structure and rates, in line with “prevailing economic realities”, while ensuring the payment of minimum wages to workers.

Public sector wages have been a thorny issue in Nigeria’s public finance management. In May 2010, public officers received over 50 percent wage increase, which saw the public sector wage bill double to about N1.8 trillion today.

The Ministry of Finance and Budget Office constantly allude to this as the bane of effective reallocation of funds for capital spending.

More so, the PDP would consider rightsizing the public sector and limiting personnel cost to 30 percent of total revenues, if elected. We estimate that this would require a N756 billion haircut on public sector expenses.

This will face strong resistance from the trade unions, with the likely ultimate price of such move being a lost election.

The PDP will “continue to reorganise, streamline and explore alternative funding schemes for the Nigerian National Petroleum Corporation (NNPC)” if elected into power. The manifesto also promises to complete the deregulation of the downstream sector and ensure the passage of the Petroleum Industry Bill.

Analysts are of the view that the current PDP government lacks the political will to take decisive action on the state-run oil company – given the number of infractions levelled against the agency in the past four years, to which the Presidency has been largely unresponsive.

The most recent is the forensic audit by professional services firm PricewaterhouseCoopers, which found that the NNPC owes at least 1.48 billion dollars in unremitted funds to the federation accounts.

The NNPC has come out rather, to state that the audit findings absolve the agency of allegations by former central bank governor, Sanusi Lamido Sanusi that over $20 billion oil monies were unremitted to government.

Overall, the PDP manifesto boasts of Nigeria’s status as Africa’s largest economy and 26th largest in the world, happening during this current administration.

The party’s policy thrust now seeks to achieve the central goal of the Vision 20:2020, which is to become one of the 20 largest economies in the world by 2020.

Akin-Olusoji Akinyele