President Muhammadu Buhari on Thursday, December 31, signed the 2021 Appropriation Act.
<p class="has-drop-cap has-vivid-red-color has-text-color" value="<amp-fit-text layout="fixed-height" min-font-size="6" max-font-size="72" height="80">The President signed the 2021 budget in Aso Rock Presidential Villa, Abuja, five days after the bill was transmitted to him by the National Assembly.The President signed the 2021 budget in Aso Rock Presidential Villa, Abuja, five days after the bill was transmitted to him by the National Assembly.
The National Assembly had on December 21, 2020, passed the 2021 Appropriation Bill with an aggregate expenditure of N13, 588, 027,886, 175 trillion.
It comprises total Capital Supplementation of N1,060,751,051,650 and total Capital Expenditure of N4,125,149,354,222, Statutory Transfer stands at N496,528,471,273; recurrent Expenditure of N5,641,970,060,680 and Gross Domestic Product, GDP growth rate of 3.00 Percent.
The National Assembly also provided the sum of N3,324,380,000 trillion for debt servicing.
The lawmakers increased the budget estimate by the sum of N505, 607,317,942 from the estimate of N13, 082, 420, 568,233 presented to the joint sitting of National Assembly by President Muhammadu Buhari on October 8, 2020.
Present with the President to witness the ceremony were Vice President Yemi Osinbajo; Senate President Ahmad Lawan; Speaker, House of Representatives, Femi Gbajabiamila; Secretary to Government of the Federation (SGF), Mr. Boss Mustapha; Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, among others.
Former Vice President, Atiku Abubakar, has picked holes in the 2021 Appropriation Bill presented to the National Assembly by President Muhammadu Buhari on Thursday.
According to Atiku, the 2021 budget proposal presented by Buhari was fraught with “very grave and perhaps disturbing issues” that could boomerang on the economy should the federal government go ahead to pass it into law.
The former vice president said the budget proposal contravenes Nigeria’s Fiscal Responsibility Act, 2007, which stipulates that, “Aggregate Expenditure and the Aggregate amount appropriated by the National Assembly for each financial year shall not be more than the estimated aggregate revenue plus a deficit, not exceeding three per cent of the estimated Gross Domestic Product or any sustainable percentage as may be determined by the national Assembly for each financial year.”
Atiku noted, however, that Buhari’s proposal to the National Assembly showed that the federal government had proposed N5.21 trillion budget deficit, which he said was more than 3.5% of the country’s 2019 GDP.
The former vice president, in a statement posted on his Facebook page, said the errors he spotted showed “glaring lack of rigour in the formulation of the budget.”
He, therefore, called on the Buhari administration to recall the proposed budget and make amends.
Atiku wrote, “Looking at the 2021 Budget Proposal placed before the National Assembly by President Muhammadu Buhari on Thursday, October 8, 2020, a number of issues, very grave and perhaps disturbing issues arise.
“I could bring up several of them, but for the sake of its direness and consequence to our economy, permit me to address one very important issue.
“The budget deficit in the proposal is ₦5.21 trillion. This amount is just over 3.5% of Nigeria’s 2019 GDP. This is contrary to the Fiscal Responsibility Act of 2007, which provides in Part II, Section 12, subsection 1 that: “Aggregate Expenditure and the Aggregate amount appropriated by the National Assembly for each financial year shall not be more than the estimated aggregate revenue plus a deficit, not exceeding three per cent of the estimated Gross Domestic Product or any sustainable percentage as may be determined by the national Assembly for each financial year.”
“Nigeria had a GDP of approximately $447 billion in 2019. Three percent (3%) of this amount is $13. 3 billion, which at the current official exchange rate of ₦379 to $1, gives you a figure of ₦5.07 trillion.
“So clearly, the budget deficit of ₦5.21 trillion, as announced by President Muhammadu, is above 3% of our GDP and is therefore in contravention of the Fiscal Responsibility Act of 2007.
“Even more disturbing is the fact that our GDP has fallen sharply from its 2019 figures, and has been projected by the World Bank and other multilateral institutions at somewhere between $400 billion and $350 billion. Meaning that in actual sense, the ₦5.21 trillion budget deficit is actually far above the 3% threshold stipulated by the FRA.
“That this escaped the notice of the Buhari administration shows a glaring lack of rigour in the formulation of the Budget. A very disturbing development.
“Furthermore, this deficit shows the precarious state of our national finances, which have since been overburdened by excessive borrowing on the part of the Buhari administration.
“It has not escaped my attention that the Fiscal Responsibility Act of 2007 makes provision for the National Assembly to raise the threshold of the budget deficit from 3% to a higher figure. However, if this is done, they will be serving this administration’s interests, not Nigeria’s, because the Act says that such a threshold must be sustainable. Is it sustainable when our budget makes almost as much provision for debt servicing, as it does for capital expenditure?
“As such, I call on the President, to recall this budget, and recalibrate it to reflect the provisions of the Fiscal Responsibility Act of 2007, and the current economic realities of the nation. To do otherwise will not only be unpatriotic, it will also be catastrophic for our nation’s economy.”