Former Vice President and candidate of the Peoples Democratic Party, PDP, in the 2019 presidential election, Alh. Atiku Abubakar has described the budget deficit in the proposal of N5. 21trn as contrary to the Fiscal Responsibility Act of 2007.
In a statement, Atiku said the budget deficit in the proposal is ₦5.21 trillion is just over 3.5% of Nigeria’s 2019 GDP.
He said, “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.
“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.
“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,” he said.
According to him, Nigeria had a GDP of approximately $447 billion in 2019, which 3 percent 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.
“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.
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. “Which means 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,” he added.