PMB's BUDGET OF CONSOLIDATION AND TRANSITION, AND WHY YOU SHOULD CARE!

PMB's BUDGET OF CONSOLIDATION AND TRANSITION, AND WHY YOU SHOULD CARE!

Apologies to my readers, I must confess that I've not fully digested the 2023 Federal Government Budget of Consolidation and Transition as tagged by President Muhammodu Buhari in his presentation to the National Assembly last week, but one item that has generated a lot of controversy is the plan of the government to borrow more money to finance its expenditure. 

According to the breakdown of the budget, the total budget is 20.5 trillion.The expected revenue is 9.7 trillion.The Government planned borrowing is 8.8 trillion. The country current debt profile is 42 trillion.Thus, if the budget is strictly adhered to, the country total debt will not be less than 50.8 trillion. The question then is if there is any reason for concerned? 

The answer is both Yes and No. One of the immediate reason why we should worry is that some of the money to be borrowed is to refinance some of the previous loans borrowed. Secondly, we need to worry as a nation that we're making less than of half of the income we need to service our needs. In simple terms, it means we're insolvent. If Nigeria were to be a company, by now, it will be declared growing-concern company. It is in this light, I won't want to agree with the Minister of Finance who said our problem is not debt problem but problem of revenue. 

If we have a problem of revenue, then, must we borrow money to fuel our appetites? Maybe, if such expenditure is future directed on infrastructures and education of the citizens capable of bringing about high ROI, then, there won't be need for worry, but if it is expended on recurrent expenditures, then, we may be at the mercy of our creditors, and to me borrowing money to service debt is one of the items on recurrent expenditures except my knowledge of budget is now rusty. 

One thing we must know about public debt is that there is no country without public debt: a combination of external and domestic debt. The United State is the most indebted country in the world with over $30 trillion debts, followed by China debt of $13, United Kingdom debt of $9.02 trillion debt and France debt of $7.32 trillion. 

According to the Business Insider report, "15 countries in West Africa have registered a total public debt of $164.1 billion as of half-year 2021. Gambia and Guinea-Bissau recorded the lowest public debts at $823 million and $381 million, respectively.... Without much surprise, Nigeria, Ghana and Ivory Coast registered the highest public debts in the region, with $79.5 billion, $21.9 billion and $19.5 billion, respectively."

Beyond this staggering debt figures, what hope lies for the future? We may need to look critically on what the other items in the budget are to be expended on, and the possibility of Return on Investment. Another thing we may need to look into is whether there are opportunities to increase the country revenue profile? Let me answer these questions quickly. 

First, if there is anything we must applaud the PMB administration for, it is the investment in infrastructures from road projects to rail projects, rail projects to aviation projects, and aviation projects to Power projects. Some of the projects are projects that will continue to service the country in the next 50 to hundred years, so such borrowing and investment cannot be termed wastes or uncalled for. The question however is whether we still have the capacity to borrow more to finance such expenditure or not? I'm not an economist, but I must says here that it is time to put a stop on our borrowing, if we can't device a means to increase our revenue. 

On the second plane, do we have the capacity to increase our revenue? Absolutely yes, but is the government ready, willing, and possess the courage to do so? For instance, one way to increase our revenue profile is to block the loopholes in our revenue generation thrive. For example, just a fortnight ago, the Channels Television made a startling documentary on what can be termed the biggest Oil Heist in Nigeria history on how crude oil are being fraudulently diverted. How about custom? This kind of illegal and fraudulent diversion of public revenue pervades all the nooks and crannies of government agencies from local to State, and State to Federal government. Thus one step to increasing our revenue profile is blockage of loopholes. Another way is tapping of our untapped potential in both human and natural resources. 

At present, we've a lot of untapped natural resources scattered across the country being illegally mined by private profiteers with collusion from government officials. And just like the natural resources, our vast population is not being used to our advantage for now. Rather, it is being underutilized and disempowered when all it will require is right education and investment in a directed manner. 

In conclusion, like many Nigerians, I'm worried by our rising debt profile, and it is in this regards we must look for and search for credible people to represent us at the different level of governance comes 2023 especially with respect to who becomes president, Governors, parliamentarians at both national and State level.

Sanmi Adekola is a Social Commentator and Entrepreneur.