Muda Yusuf, an economic expert has emphasised the need for new funding models to support road infrastructure and the country’s tertiary education system.
Yusuf said this in Lagos while reacting to the 2023 budget presentation by President Muhammadu Buhari to the National Assembly on Friday.
Yusuf, also founder, the Centre for the Promotion of Private Enterprises (CPPE), said the call was in agreement with the president’s speech that funding of the same cannot be adequately and sustainably supported exclusively from the government budget. He stated that budget funding for road infrastructure could not guarantee quality roads for a country of over 200 million people.
“We note the reference by Mr President to Public Private Partnership (PPP) options for infrastructure financing.
“However, the macroeconomic and regulatory environment needs to improve to inspire the confidence of investors in infrastructure within the PPP framework.
“Current macroeconomic and foreign exchange policy regime are major disincentives to investors in infrastructure, especially foreign investors.
“We need the inflow of such foreign capital to complement government funding in infrastructure,” he said.
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Yusuf stressed the need to address issues surrounding the country’s fiscal sustainability aspiration in the 2023 budget.
According to him, the budget has further amplified the troubling fiscal outlook for the economy as expenditure continues to accelerate amid consistent weak revenue performance.
He noted that the budget of N20.51 trillion with a revenue projection of N9.73 trillion left the country with a deficit of N10.78 trillion.
Yusuf stated that in all probability, the deficit would be much bigger by year-end because of the track record of revenue underperformance over the last couple of years.
He added that the development would likely lead to an acceleration of the Central Bank of Nigeria (CBN) financing of fiscal deficit given the revenue performance trajectory.
Noting that the country’s public debt stock was currently at N42 trillion, Yusuf said that additional new borrowing of N8.8 trillion would increase the debt profile towards N50 trillion by May 2023.
“A number of issues need to be addressed to achieve our fiscal sustainability aspiration.
“Government-owned enterprises managing huge economic assets need to justify the value of assets at their disposal.
“Returns on investment on those assets have been consistently sub-optimal for many years.
“These include government enterprises in maritime, and oil and gas, for example even though it is instructive that some reforms are ongoing at the Nigerian National Petroleum Corporation (NNPC),” he said.
Yusuf also emphasised the need for the lapses in the petroleum upstream ecosystem to be urgently addressed. This, he said, includes the impunity of crude oil theft and vandalism of oil facilities.
He added that the foreign exchange policy regime which was adversely impacting the business environment needed urgent attention.
“Weak private sector performance will naturally affect non-oil tax revenues. There is a need for budget reforms. The budgetary appropriations must reflect urgent national economic priorities,” he said.
