Despite being the highest budget figure in Nigeria’s history, the Director-General, Budget Office of the Federation, Ben Akabueze, has said the N16.39 trillion figure proposed by President Muhammadu Buhari as the 2022 budget is “low.” Mr Akabueze stated this while speaking on Channel Television programme, “Politics Today” on Thursday.
President Buhari presented a total budget of N16.39 trillion to the joint session of the National Assembly on Thursday which is over N3 trillion more than the 2021 budget.
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He hinged the increase on the need to give the Independent National Electoral Commission (INEC) a sum of N100 billion for the 2023 General Election, while another N50 billion will be set aside for health workers’ hazard allowance and other allocations to security agencies with the total available revenue for the year estimated at N10.13 trillion.
However, Mr Akabueze, a leading person in the budget preparation, said the federal budget is so low compared to the country’s unmet needs.
He said, “Well first of all, I think we need to understand that as large as the size of this budget might seem to Nigerians, and as you say it’s the largest so far, the truth of the matter is that our budget is still way lower than it should be. The problem of Nigeria isn’t that, I’m talking about the government now, we’re spending too much money, it’s that we’re actually spending too little.
“If we look at, I mean there’s a global measure for this, you know, which is called a public expenditure to GDP ratio. For Nigeria, the public expenditure to GDP ratio is still in the order of 12 percent. The average for Africa is 22 percent, some countries in Africa have about 30 percent, I mean in the developed countries, the ratio is, you know, typically over 40 percent. And so, you know our budgets.
“But, why are our budgets still so low relative to our needs, and it’s because the budgets are so low in terms of size; that is why there is still a lot of unmet needs. But there’s a correlation between that and our revenues,” he explained.
He further explained that Nigeria’s Gross Domestic Product (GDP) ratio, which is barely eight and nine percent, is far below the 20 percent for other African countries.
Mr Akabueze, who had served as the CEO of NAL Bank Plc (now Sterling Bank) and two terms Commissioner for Economic Planning and Budget with the Lagos State, said the country may not meet some of its needs, going by its current revenues from GDP, without borrowing to fund the deficit.
“By the IMF measures, you know, standards, the country needs at least 15 percent revenue to GDP ratio to either begin to approach fiscal viability. Alright, and we are just barely over 50 percent of that,” he said.
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The Budget office boss mentioned defence and security agencies among the sectors “crying” that they are underfunded, even though many Nigerians would disagree given the widespread state of insecurity in the country.
