The Nigerian economy has several sources through which revenue is generated. These sources include crude oil, tax and some others. In the wake of the sudden crash in the global price of crude oil, it is now very obvious whether Nigeria is a mono product economy or not.
Nigeria’s budget for 2020 really expected a very large chunk of the revenue to come from crude oil sales pegged at a benchmark far above the current price per barrel of about $20.
If Nigeria operated a well-diversified economy, it would not have been this devastating if crude oil failed to generate as much revenue as expected.
Nigeria has had it tough diversifying away from oil revenues. It is shameful that an oil-producing nation like Nigeria does not have a fully-functional refinery and has to export crude oil for refining only to turn around and later import fuel and other value-added products. It remains a mystery how long such infliction would last.
The Daily Times Friday Reported that Former Vice-President, Atiku Abubakar, had strongly criticized the Federal Government’s recent review of the 2020 budget with a view to greatly imparting the common man and helping the Nigerian economy prevent near-recession experience.
Atiku’s Suggestion for Economic Boom
Dr. Abubakar noted that instead of reviewing the national budget, the FG should auction at least eight presidential jets, while the N27bn designated for the rehabilitation of the National Assembly complex should be immediately cancelled.
In a press statement released on Thursday in Abuja, Atiku said he was sad that despite the sudden fall of global oil prices and Nigeria’s failure to diversify the economy and create alternative revenue sources, the administration only reduced the budget by a meagre 0.6 percent.
He further explained that slash the budget for presidential feeding and transport together with less important sub heads would help free up more funds to make the average Nigerian enjoy a better life.
Similarly, Vanguard Newspapers reported that Former Vice President, Alhaji Abubakar had expressed disappointment about the President Buhari-led administration’s insignificant slash of the 2020 budget from ₦10.594 trillion to ₦10.523 trillion.
Atiku, who made that remark in a statement personally issued on Thursday said the downward review represented only the sum of ₦71 billion, stressing that the amount was far inadequate and would not be able to help Nigerians overcome the harsh economic realities in the global economy.
Also, he said when that budget was brought before the National Assembly on Tuesday, October 8, 2019; it was on the basis that Nigeria’s crude oil production would reach 2.18 million barrels daily and would sell at $57 per barrel.
Right now, all of those metrics are no longer valid because both production and the oil price have been so adversely affected with the unfortunate covid-19 pandemic and Nigeria had many unsold vessels searching for prospective buyers.
Also, he compared Nigeria with Saudi Arabia whose production capacity exceeded Nigeria’s, had a larger global market share, foreign reserves more than 10 times, but had to reduce its national budget by about 30% in line with prevailing economic realities.
He further chided the Buhari administration for wanting Nigeria to compensate for the drop in anticipated revenue by opting for more loans as well as issuing more bonds without minding the negative effects these would have on the economy.
The Punch Newspapers corroborated Atiku Abubakar’s faulting of the recent review of the 2020 budget by the Buhari-led administration, noting it showed the government was not committed to reducing the sufferings of Nigerians.
Wazirin Sariki explained that significant cuts in funds budgeted for presidential feeding and transport would go a long way in making the economy grow and in ensuring Nigerians got a better deal.
According to him, between now and the time the budget was first presented in the hallowed chamber in 2019, lots of changes had taken place.
In a related development, This Day Newspapers report that the former presidential aspirant, Alhaji Abubakar advised the Nigerian government on some identified items that should be excluded from the 2020 budget.
Atiku said apart from the N27 billion budget renovation of the national assembly, the fund budgeted for car purchase both for the president and other political officeholders should be cancelled.
Also, he recommended the budget for travels and feeding of the president and vice president and other political appointees should be cut down, while the salaries those in the civil service should be left untouched.