By Sherifat Lawal
Mr. Ben Akabueze, the Director-General of the Budget Office, has said that the reason the country’s debt ratio is a cause for concern is not because the debt is high, but that revenue is low.
Akabueze said this as a guest on Channels TV Friday morning, while commenting on the 2021 budget and government’s efforts at raising revenue.
According to Akabueze, “While cutting cost of governance is in view, the government also has an efficiency unit, which continues to look into ideas to cut cost.
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“Looking at the structure of the budget, the single largest item in the 2020 budget is personnel cost with about N3.7 trillion.
“We have debt service of N3.1 trillion, statutory transfer of nearly half a billion and capital expenditure, N3.5 trillion, which amount to over N10 trillion.
“Even though our aggregate debt stock ordinarily shouldn’t be a concern, but our debt service aggregate ratio should be a concern and it’s a concern because the revenue is too low; not because the debt is high.
“Therefore, if we address the real issue, as our revenue grows, the denominator grows and debt ratio declines. That is why tackling revenue is our number one challenge as a country, but it has not been easy.”
He also noted that the government would revisit the recommendations of the Oronsaye report on rationalising, which he said is an ongoing process and for the 2021 budget.
“I can also say that for the 2021 budget, there were a number of government agencies that generate their own revenues and still use to draw from the Federal Government’s budget.
“That has been kicked out, effective from 2021 and if you aggregate savings from kicking such organisations, it amounts to over N80 billion.
“Also because we are technically in a recession, the government is mindful about keeping people employed, as the private sector is not creating a lot of jobs and government is wary about compounding the unemployment problem,” Akabueze added.