Immediate-past President of the Chartered Institute of Bankers of Nigeria, Prof Segun Ajibola, has said that it will be a miracle for government to realise the estimates in its revised budget.
President Muhammadu Buhari had last Thursday reviewed the budget he passed in December 2019 down by N84.70bn.
The new spending plan presented is higher than the N1.5trn cut the Minister of Finance, Budget and National Planning, Zainab Ahmed, said government would make in March.
Prof Ajibola told SaharaReporters in an interview that the government was only making ‘educated guesses’ and the fortunes of oil has since improved, giving the government room to be more optimistic than it was two to three months back.
The academic feels “it will be miraculous if they meet them” – the new spending estimates.
Ajibola, who teaches economics at Babcock University, said all Nigerians need from any appropriation right now was a budget of survival.
“I don’t expect budget 2020 to offer much hope. If there is anything we can strive to achieve, it is a survivor. All we need in 2020 is budget of survival,” he said.
The revised spending plan increases recurrent expenditure by an estimated N85.55bn or 1.77 per cent, from the N4.84trn approved last December to N4.92trn.
The size of the money Nigeria will be using to service its domestic and foreign loans was also raised by 8.30 per cent or N226.21bn from the previously approved N2.73trn to N2.95trn.
The professor notes that although the cost of governance and debt servicing are burdens on Nigeria’s finances, salaries needed to be paid.
He described the envelope meant for developmental purposes, which was reduced by 9.51 per cent or N234.50bn from the N2.47trn signed in December to N2.30trn, as a balancing item, saying it could be toiled with or even deferred.
He added, “Capital expenditure is usually a balancing item. You hardly can control recurrent expenditure. Capital spending is always a problem in the planning process.
“Some even suggested that for 2020 we should cancel capital expenditure all together, and ascribe that to COVID-19, then start afresh in 2021 as far as capital expenditure is concerned."
The possibility that Nigeria would match either its approved budget estimates is indeed a miracle.
The net oil and gas revenue that came into the Federation Account in the first quarter of 2020, was N940.91bn, a shortfall of N425.52bn or 31.1 per cent of the assumed amount.
Non-oil tax revenue tells a gloomier story, with earnings of N269.41bn at the end of the first quarter of 2020.
This is a shortfall of about 40 per cent of the hoped-for non-oil revenue income for 2020.
While the shortfalls are above 30 per cent, the proposed revision to the budget is less than one per cent.
"We will still have enough energy to take us through this challenging moment and navigate into a new year," Ajibola said.