By Yinka Kolawole
The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has welcomed the timely presentation of the 2022 Budget estimates to the National Assembly by President Muhammadu Buhari but cautioned on the Federal Government’s plan to continue to borrow to finance the budget.
In a statement made available to Vanguard on Friday, National President, NACCIMA, Ide JC Udeagbala, also applauded the decision to inject affirmative action into the N16.9 trillion Appropriation bill through its gender component to make it gender friendly, describing it as a historic decision.
He however said that the upward swing in the borrowing to finance the budget is worrisome to NACCIMA.
Udeagbala stated: “There is a need to watch the rising profile of our debt. An increase in deficit to N6.26 trillion, which is to be funded by borrowing is worrisome.
“While it is an accepted fiscal option across the world, for countries to resort to borrowing to finance shortfalls in their budgets, there must be caution in what component of the budget will be financed by the budget.
“A sustainable debt profile requires that borrowed funds must be used for critical infrastructure projects that will enable payback of these loans.
“There are speculations that the borrowings have been encouraged by projections that the Nigerian economy will grow by 2.4% in the year 2022 well above earlier projected GDP growth of 1.8%.
“It was also said that the decision on scaling up borrowing is based on assurances of revenue from the prices of crude which now hover around $80 dollars well above $57 backed by projected, 1.88million barrels a day .
“The Association however wishes to draw attention to the boom and bust cycle of international crude oil prices and cannot be relied upon as firm and assured sources of revenue.
“Rather there must be continued efforts to diversify the economy, improve significantly on non-oil revenue and deliver on upgrade of infrastructure and improvement in security situation.
“This is to enable an increase in productive activities especially in the Agric sector.”
The NACCIMA President further expressed the Association’s delight on the decision under the budget to further strengthen the frameworks for concessions and Public Private Partnerships (PPP) and that capital projects that are good candidates for PPP will be developed for private sector participation.