BudgIT asks FG to discontinue ‘indiscriminate’ borrowing

BudgIT, a civic-tech organisation, has expressed concerns over the poor fiscal performance of the federal government’s 2022 budget and the growing subsidy payments.

BudgIT said this in a statement on Monday signed by Iyanu Fatoba, assistant head, media and communications.

The organisation said the fortunes of Nigeria have worsened in the last eight months.

According to BudgIT, the most pressing concern is the debt service-to-revenue ratio, which has reached alarming levels within the first four months of 2022.

It added that the country’s current debt service, which stood at N1.94 trillion from January – April 2022, is over 100 percent of the nation’s revenue which was N1.64 trillion naira, within the same period.

“This is in spite of warnings given by the International Monetary Fund (IMF) that Nigeria would be spending over 100 percent of its revenue on debt service in 2026. Unfortunately, those predictions are Nigeria’s current realities,” the statement reads.

“Recall that BudgIT, in a consultation memo released in February 2022 titled: ‘Leveraging budget reforms for economic development,’ had articulated several reform issues bordering on Nigeria’s public financial management regime that affect the very core of governance, separation of powers, expenditure efficiency, and the livelihoods of millions of Nigerians; 83 million of whom live in extreme poverty.

“Four months later, some of those same challenges exist, with additional ones, if not properly managed, may spell fiscal crisis for an already impoverished nation. In particular, the debt service spending is only N93.6 billion less than the combined total personnel and capital expenditure for the period under review. Also alarming are the expenditure targets for the Tertiary Education Trust Fund (TETFund), which have only been 15 percent (of the total N5.10 billion naira) for the period under review.

“There is no gainsaying that the fortunes of the most populous black nation on earth, Nigeria, have worsened in the last 8 months after the 2022 budget was passed.”

Gabriel Okeowo, BudgIT’s country director, said despite being confronted with a myriad of challenges ranging from the ASUU strike which has crippled tertiary education, Nigerians are waiting with bated breath for the national budget to begin to bring about relief and the positive change it was claimed to have harboured.

The civic-tech group advised the federal government to discontinue indiscriminate borrowing through ways and means.

“It is in light of the above that we call on all well-meaning Nigerians, CSOs, media, the private sector, the international community, and reformers to join the call for the federal government to do the following: discontinue indiscriminate borrowing through ways and means, which is creating a ballooning set of interest payments, running parallel to the external debt, as well as increasing the money supply and creating more monetary volatility; check the oil theft that is now commonplace in the petroleum industry, and has encumbered the countries ability to meet its production quotas-the latter having fallen to 1.25 million barrels as at May 2022,” the statement added.

“Ramp up the remittance of operating surpluses by MDAs and GOEs to boost FG’s independent revenues, which is currently underperforming, and take considered action to reform subsidy, this achieves the twin objectives of having citizen buy-in and revenue savings that are channelled into priority areas.”