Budgit Rally Support Against FG’s Indiscriminate Borrowing

Posted by Eric Ojo Latest Headlines, News Across Nigeria Wednesday, July 27th, 2022

(AFRICAN EXAMINER) – BudgIT, a frontline Nigerian nonprofit organization promoting transparency and accountability in budget and public resources through infographics, data analysis, and presentations, has urged the Federal Government to stop indiscriminate borrowing.

Founded in 2011, BudgIT uses technology to improve transparency in budgets and public spending and to galvanize participation and accountability.

In a statement on Tuesday, the organization called on all well-meaning Nigerians, Civil Society Organisations (CSOs, media, the private sector, the international community, and reformers to join the call for the Federal Government to stop undiscerning borrowing.

The group said the Federal Government should be dissuaded from 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.

“Amidst the growing concern of debt service-to-revenue ratio, which has reached alarming levels within the first 4 months of 2022. 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, 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 said.

BudgiT also expressed its concern over the poor fiscal performance of the Federal Government’s 2022 budget and the growing subsidy payments, adding 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.

The non-profit harped on the need for the Federal Government to check the oil theft that is now commonplace in the petroleum industry, and has encumbered the country’s ability to meet its production quotas to the extent of that it has fallen to 1.25 million barrels as at May 2022;

The group also reiterated the need to ramp up the remittance of operating surpluses by Ministries, Departments and Agencies (MDAs) to boost Federal Government’s independent revenues which is currently underperforming.

They equally suggested that deliberate and considered action should be taken to reform subsidy, adding that such a step will achieve the twin objectives of having citizen buy-in and revenue savings that are channeled into priority areas.

BudgIT’s Country Director Gabriel Okeowo said despite being confronted with a myriad of challenges, Nigerians are waiting with bated breath for the national budget to begin to bring about the relief and positive change it was claimed to have harbored.

“We posit that, with 2022 being a pre-election year, alongside the growing fiscal threat posed by subsidy payments and the debt service-to-revenue ratio; all the latter will negatively impact Nigeria’s budget credibility, cripple service delivery in critical social sectors of the economy and impede needed investments in productive sectors, thereby stunting economic growth”, he stressed.

Okeowo however acknowledged that the country is currently grappling with the five-months and counting ASUU strike which has crippled Nigeria’s tertiary education; a 13-month high inflation of 17.7 percent which has pushed millions of more Nigerians into poverty; a drastic decline in Nigeria’s oil production which has displaced Nigeria as Africa’s biggest crude oil producer; a massive increase in the country’s petroleum subsidy liabilities (which has crowded out investment in critical areas of the economy, obliterated federal transfers to subnational units, and skyrocketed the country’s debt to over N41.6 trillion); a complete breakdown of law and order in several cities across the federation, which has encumbered the inflow of foreign direct investments and increased the cost of doing business.