By Victor Ahiuma-Young
At the backdrop of consistent positive figures reported on Nigeria’s macroeconomic indicators in the past one year, the Nigeria Employers’ Consultative Association, NECA, has indicated that their findings reveal continued adversity for both individuals and businesses in the country.
They attributed the situation to misalignment of fiscal policy of the federal government where the bulk of its resources that would have been injected to boost economic activities were spent on debt servicing, lamenting that a whopping N18.01 trillion of total national budget was used to service debt in the last three years.
The Association added that the trend has negative implications to the nation’s development as only N13.7 trillion was spent on recurrent and capital expenditures. They also lamented the adverse impact of delays in budgetary process on the economy over the last three years.
The National Bureau of Statistics, NBS, has reported a steady growth in the gross domestic product, GDP, figures since 2017 after Nigeria exited recession.
But at its 61st Annual General Meeting, AGM, yesterday, President of NECA, Mr. Larry Ettah, while acknowledging the slight economic growth in 2017, said, “The economy continued to be dogged by the perennial bad habit of delay in passage of the budget. The grave implication of this is the loss of momentum and impetus to consolidate on the gains of the previous year. It is, therefore, not surprising that the projected GDP growth rate for 2018 is already being reviewed downward.
“A cursory look at the 2018 budget shows that government’s recurrent expenditure as a percentage of total federal government expenditure stands at a staggering 68.50 percent, an increase from 68.27 percent in 2017. We don’t think this a healthy expenditure pattern; a clear indication that government is yet to accord the issue of infrastructural improvement the importance it deserves through adequate fiscal support.
“The National Budget as recently passed showed that the debt service provision (including sinking fund) is the third (N2.2trillion) largest component of the 2018 expenditure framework, representing 24.17 percent or approximately a quarter of the entire budget (N9.12trillion). The N2.2trillion cost of debt servicing is about 30.76 percent of total expected revenue (N7.1trillion), indicating that debt service may soon be back to the pre-debt relief period.