Business - News - January 17, 2021

Group faults plan to auction govt. property to fund 2021 budget deficit

Urges NASS to stop Buhari

The Federal Government must find alternative means of financing the N5.6billion deficit in 2021 budget, rather than disposing of public properties to raise funding. A civil society group has said.

The Socio-Economic Rights and Accountability Project (SERAP) on Sunday urged the National Assembly to take urgent steps to stop President Muhammadu Buhari from going ahead with the plan.

How deficit will be funded
Presenting details of the 2021 Appropriation Act during a virtual media briefing in Abuja on Tuesday, the Minister of Finance, Budget and National Planning, Zainab Ahmed, said apart from domestic and foreign borrowings and from multilateral and bilateral loan drawdowns, the government planned to finance the N5.6trillion deficit with the proceeds from the privatization of public assets.

Part of the government plan is to borrow about N2.34trillion each from domestic and foreign sources, with about N709.69 billion expected from multilateral and bilateral loan drawdowns and N205.15 billion from privatization proceeds, the Minister said.

SERAP faults plan
But, SERAP faults the plan, saying rather than dispose public assets to finance the deficit, the government can consider other high cost centres in the budget, such as the salaries and allowances of the lawmakers and the Presidency to raise the needed funding.

Concerns among Nigerians

Already the hefty allocation to the National Assembly in successive annual budgets has been a source of concern among Nigerians.
Apart from 2015 and 2016 that the budgetary allocations to the law makers were cut down to about N115 billion at the onset of the present administration, previous years’ allocations between 2011, 2012, 2013 and 2014 were N150 billion each.
In 2016, the allocation was N125billion, same as 2017 and 2019, apart from 2018, which had an allocation of N139.5billion. It was N128billion each for 2019 and 2020.
Despite official confirmation by the government that country’s economy has gone into its second recession in five years, allocation to the National Assembly has not changed, even with details not available for public scrutiny.

A review by BudgIT, a civic organization focused on budget transparency, shows that the allocations to the National Assembly in the 2021 Budget is over two and a half times more than the combined total capital allocation of N51.16billion to 27 Federal Polytechnics (N10.34bn), 21 Federal Colleges of Education (N5.49bn), 47 Federal Universities (N18.88bn) and 104 Unity Schools (N16.44bn) in the same budget.
SERAP writes NASS
In a letter dated January 16, 2021, to the Senate President, Ahmed Lawan, SERAP’s deputy director, Kolawole Oluwadare, urged the National Assembly to exercise its constitutional right of oversight on the executive by protecting valuable public properties and ensure a responsible budget spending.

A copy of the letter was sent to the Speaker of the House of Representative, Femi Gbajiabiamila.
Mr Oluwadare said allowing the government to sell public properties, while also enjoying almost absolute discretion to borrow to fund the 2021 budget would amount to a fundamental breach of constitutional and fiduciary duties.

“Selling valuable public properties to fund the 2021 budget would be counter-productive, as this would be vulnerable to corruption and mismanagement. It will not only undermine the social contract with Nigerians, but it would leave the government worse off, and the country hurt in the long run,” SERAP said.

Describing the plan as neither necessary nor in the public interest, SERAP said the country’s fiscal situation must be changed through some combination of cuts in spending on salaries and allowances of the lawmaker.

SERAP called for a freeze on the spending in certain areas of the budget, such as hardship and furniture allowances, entertainment allowances, international travels, and buying of motor vehicles and utilities for members and the Presidency.

NASS must protect public property
“The time is now for the leadership of the National Assembly to stand up for the Nigerian people and stop the rush to sell public properties, push for a responsible budget, and support efforts to have the government spend responsibly
“Other areas the government should focus on to propose the sliding of their pay include constituency allowance, wardrobe allowance, recess allowance, and entertainment allowance.”

“SERAP also urges the National Assembly to stop approving loan requests by the Federal Government if it continues to fail to demonstrate transparency and accountability in the spending of the loans so far obtained.”

“The current level of borrowing is unsustainable, which means that the National Assembly under your leadership can play an important role to limit how much the government can borrow in the aggregate. The National Assembly should urgently seek assurances and written commitment from President Buhari about his government’s plan to bring the country’s debt problem under control.”

“We would consider the option of pursuing legal action to stop the Federal Government from selling public properties, and we may join the National Assembly in any such suit.”

The group noted that the budget deficit and growing debt crisis threatening Nigerians’ access to essential public goods and services, will hurt future generations, particularly the poorest and most vulnerable people who continue to endure dire conditions,” the group said.

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