IF Nigerians expected a departure from the old ways when President Muhammadu Buhari presented the 2023 budget to the National Assembly, they were gravely mistaken. The N20.51 trillion budget dubbed Budget of Fiscal Consolidation and Transition came with a deficit of N10.78 trillion representing 4.78 percent of estimated Gross Domestic Product (GDP) and above the three percent threshold set by the Fiscal Responsibility Act 2007. According to the president, the deficit will be financed through new borrowings totaling N8.80 trillion, N206.18 billion from privatisation proceeds and N1.77 trillion drawdowns on bilateral/multilateral loans secured for specific development projects. It is based on certain parameters, including oil price benchmark of $70 per barrel; daily oil production estimate of 1.69 million barrels; exchange rate of N435.57 to $1; and projected GDP growth rate of 3.75 percent and 17.16 percent inflation rate.
According to the president, based on these parameters, total federally collectible revenue is estimated at N16.87 trillion in 2023, while the total federally distributable revenue is estimated at N11.09 trillion, with total revenue available to fund the budget pegged at N9.73 trillion. And justifying the borrowing spree, the president said: “Over time, we have resorted to borrowing to finance our fiscal gaps. We have been using loans to finance critical development projects and programmes aimed at further improving our economic environment and enhance the delivery of public services to our people. As you are aware, we have witnessed two economic recessions within the period of this administration. A direct result of this is the significant decline in our revenue generating capacity. In both cases, we had to spend our way out of recession, resulting in higher public debt and debt service. It is unlikely that our recovery from each of the two recessions would have been as fast without the sustained government expenditure funded by debt.”
We have deplored the Buhari administration’s large appetite for loans time and again, and it is distressing that we have to do it again. In the last seven years, the administration has given the impression that mindless borrowing even while the country has no realistic means of repaying the loans without jeopardising the future of millions of Nigerians is the way to go. In toeing this terrible path, he has had a ready accomplice in the pliable, docile and unreflective legislative arm of government headed by Senator Ahmad Lawan. Like Buhari, Ahmad has stuck to the brazenly false logic that since Nigeria is a poor country, it has no alternative to borrowing. Lawan has thus not only facilitated the government’s borrowing spree, he has provided intellectual back-up for it. He has understandably failed to take up our challenge to name any country that ever borrowed its way into prosperity, and must bear the responsibility for foisting a fait accompli on Nigeria and Nigerians with severely adverse consequences for the future.
The 2023 budget proposal presented by President Buhari, his last as president, is regrettably cast in the tradition of bogus dependence on borrowing and outrageous budget deficits. The N20.15 trillion budget estimate is expected to have a deficit of N78 trillion naira which even the Budget Office earlier projected could rise to N12.4 trillion, yet the country is already mired in the inability to source enough revenue to service existing debts. The fact that the government is adding to the existing debt stock that it cannot currently service should be a matter of concern to all Nigerians as this is tantamount to simply not caring about the future of the country. This apparent lack of interest in or care about the future has been clearly visible in all of the budgets presented by President Buhari’s government since 2015. Surely, the president will be remembered for recklessness in amassing debts and giving no thought to the decreasing capacity of the economy to service them.
Economists have been befuddled by the logic of the Buhari government in continuing to take loans even while lacking the revenue to service existing debts. It is clear that it enjoys spending money that it does not have while preferring to shift the burden of such reckless pursuit to the future, a future mortgaged with debts. Nigerians certainly have a duty to ask questions about the debt overhang that the Buhari government is imposing on the country and not simply accept it. They ought not to allow Nigeria’s future to be mortgaged by the exceedingly outrageous appetite for debts and loans. The government has not kept its promise to diversify the economy and as the president leaves office, most of his electoral promises will be exiting with him.
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