…As Senators bemoan continues borrowing to finance budget
By Ignatius Okorocha
The Senate on Tuesday commenced debate on the 2022 appropriation bill presented to the National Assembly last week by President Muhammadu Buhari.
This was as many senators insisted that rather than engaging in continues borrowing to finance budget, federal government should exploit other revenue outlets and cut-down on over bloating deficit.
President of the Senate, Ahmad Lawan, who presided over plenary, said the debate on the bill which is slated for two days continues on Wednesday, October 13, 2021.
President Buhari had on Thursday last week presented a N16.39 trillion budget proposal for the 2022 fiscal year.
He said out of the total expenditure of N16.39 trillion Naira proposed for the Federal Government in 2022, N768.28 is for Statutory Transfers; N6.83 trillion is for Non-debt Recurrent Costs; and N4.11 trillion for Personnel Costs.
Others are N577.0 billion for Pensions, Gratuities and Retirees’ Benefits; N792.39 for Overheads; N5.35 trillion for Capital Expenditure, including capital component of statutory transfers; N3.61 trillion for Debt Service; and N292.71 billion Naira for Sinking Fund to retire certain maturing bonds.
He explained that the expected total fiscal operations of the Federal Government would result in a deficit of 6.26 trillion Naira, an amount representing 3.39 percent of estimated GDP.
According to him, the figure is slightly above the 3 percent threshold set by the Fiscal Responsibility Act 2007.
Senators who took turns to contribute to the ongoing debate on the 2022 appropriation bill were each allowed to speak for 3 minutes.
Leading debate on the general principles of the bill, the Senate Leader, Yahaya Abdullahi, said the 2022 Budget of Economic Growth and Sustainability places Defence and Internal Security as top priority signaling the administration’s firm commitment to the security of life, property and public safety, nationwide.
According to him, the fiscal operations of the federal government which would result in a deficit of 6.26 trillion naira can be tackled either by increasing taxes, cutting expenditure and borrowing.
He, however, explained that increase in taxes was not feasible because the majority of Nigeria’s population are made up of the poor.
The lawmaker observed that it is more dangerous to sack workers in bid to cut down on government spending, warning that doing so would expose the country to political and economic turbulence.
He added that the country’s last option of borrowing would allow the nation survive the present challenges and stabilize the polity and economy.
“In the 2022 budget, deficit spending has become necessary in order to ensure that the economy does not relapse into another recession after strongly coming out of the last one with a respectable 5 percent growth in the second quarter of this year.
“Deficit financing is mainly to fund capital expenditure. This new borrowings totaling N5.01 trillion naira, N90.73 billion naira from Privatization Oroceeds and 1.16 trillion naira drawdowns on loans secure for specific development projects.
“Although there is a growing concern over this administration’s resort to borrowing to finance fiscal gaps, let me state here that the debt level of the federal government is still within sustainable limits”, Senator Yahaya said.
Other Senators who spoke during the debate include the Minority Leader, Enyinnaya Abaribe (Abia South), Aliero Adamu (Kebbi Central), Aliyu Wamakko (Sokoto North), Ibikunle Amosun (Ogun Central), and Emmanuel Bwacha (Taraba South).
