Abuja Chapter Chairman of the Chartered Institute of Bankers of Nigeria (CIBN), Prof Uche Uwaleke has picked holes in the 2021 appropriation bill submitted to the joint session of the National Assembly by President Muhammadu Buhari on Thursday, saying that new borrowings of over N4 trillion to part finance a deficit of over N5 trillion was worrisome given the already huge amount of over N3 trillion allocated to debt servicing alone.
In his reaction to the budget proposal, Uwaleke, who is also Nigeria’s first professor of the capital markets further noted that the deficit to GDP should have been kept within the 3% threshold stipulated in the Fiscal Responsibility Act 2007, despite the ravaging COVID-19 pestilence.
He hoped that the National Assembly will consider any amendment within the budget envelope of N13.08 trillion and not to end up jerking up the figure.
He said: “I also think the real GDP growth rate projected at 3% is a little ambitious in view of the impact of COVID-19 on the economy expected to linger till next year. This is why the recent Fitch report on Nigeria projects a GDP growth rate of 1.3% for the country in 2021”.
Inspite of the above, Uwaleke was happy that the budget proposal seems to have set the right priorities with the bulk of capital spending going to Works and Housing, Power and Transport.
He added that for the first time in many years, the capital allocation to education and health was above that of defense.
He commended the executive arm for submitting the budget proposal in good time that allows the National Assembly sufficient period to consider and pass the appropriation Bill.
“I think the assumptions and budget parameters are realistic except for the Exchange rate of N379 to the dollar that may not hold due to the on-going process of unifying Exchange rates across all forex windows by the CBN consistent with the IMF prescription”, Uwaleke stated.