The Federal, State and Local governments have been urged to be proactive in spending to avert the looming danger associated with increasing debt, seeing that coronavirus pandemic has affected oil price that in turn alters the 2020 national budget implementation.
This observation was made at the 2020 roundtable discussion titled: The Art of National Budgeting and Nigeria’s Debt Profile: Sectoral and Demographic Implications organised by the Covenant University’s Centre for Economic Policy and Development Research (CEPDeR).
Ben Akabueze, director-general, Budget Office of the Federation, who was the keynote speaker, said the Budgeting in Nigeria had been focused on allocation rather than revenue (fund availability) due to the oil wealth effect, adding that this discourse was very timely considering the current effects of COVID-19 and dwindling oil prices.
Akabueze, who was represented by Olumide Ayodele, technical adviser to the director-general, Budget Office of the Federation, said Nigeria’s analysts need to focus on Sub-National budgets in order to engender the required development needed at the grassroots.
The keynote speaker pointed out that the main challenge to the Federal Government budget financing was the poor revenue performance that could be attributed to several factors.
Talking about revenue, he noted that the coronavirus pandemic would have an impact on VAT, domestic income, foreign trade, oil prices and spikes in risk aversion in the global financial market.
Discussing the budget’s impact on Small and Medium-scale Enterprises, Oluwasegun Osidipe, director, Economics and Statistics, Manufacturers Association of Nigeria (MAN), said it was the expectation of manufacturers that a critical portion of the budget would be allocated to developing strategic infrastructure, saying, “The major challenge is not the availability of incentive is not the availability of necessary policies, the major challenge is SMES getting the right information to even know what is available for them”.
It is the stringent regulatory environment by government account for why a lot of SMEs play in the informal sector, Osidipe said, adding that unless government changes its strategy, it will continue to lose the huge money exchanging hands in the informal sector.
Temitope Jebutu, general manager, AACE Food Processing & Distribution Limited, while discussing the budget as it affect agriculture sector, observed that the 2020 budget was already starting on the wrong foot, noting that a budget that was done on a $57 per barrel oil benchmark was already faulty in implementation going by the global crisis of Covid-19.
According to Jebutu, “For agriculture, if you look at previous budget, you will realise that the issues we have had is not an issue with the budget in itself, but about implementation. The agriculture sector in Nigeria today is not self-sufficient.”
Adekunle Salako, chief operating officer, Klasik Healthcare & Pharma Nigeria Limited, while speaking on the implication for the health sector, noted that the health sector, which is one of the key drivers of human capital development, was in a familiar territory, saying that from 1999 till date, Nigeria had had an average of 4 to 5 percent allocated to the health sector.
To him, “I think it is a matter of priority and clearly, we can state that from the 2020 budget and subsequent budgets we have had, the health sector has not been a priority to government at the federal and at the sub-national levels”.
On his part, Aderemi Aaron-Anthony Atayero, vice-chancellor, Covenant University opines that the various governments had not been able to muster the needed political will to effect the necessary and comprehensive changes to tackle the entrenched structural problems with the country’s economy.
Atayero, who was represented by Akan William, Deputy Vice Chancellor noted that the roundtable became important to discuss the implications of various issues unfolding in the public debt structure, with a view to exploring the possibilities of restructuring the debt profile within sustainable level with minimal negative impacts on socio-economic growth and development.
Evans Osabuohien, chair of the CEPDeR centre, in his remarks, noted that the roundtable is aimed at making an impact on the economic wellbeing of Nigeria and the African continent.
Hinting on the emerging technical partnership with the African Capacity Building Foundation (ACBF), African Union (AU)’s specialised agency for capacity development programmes across 48 African countries and eight regional economic communities,
Osabuohien explained that the partnership would entail the dissemination of the policy briefs to other African countries.
Sprung from the university’s economics and development studies department, CEPDeR is aimed at ‘Linking Research to Policy and Practice’. “It was born out of a burning passion during my tenure as the Head of Department (August 2016-July 2018), which was based on the need to have a platform for interaction among academia, policymakers and practitioners,” Osabuohien said.
