Some financial experts have told the federal government that increasing the country’s oil production to the OPEC quota is the only way to keep the budget stable and reduce the projected budget deficit.
On Wednesday in Lagos, they made the appeal in separate interviews with the News Agency of Nigeria (NAN).
Prof. Sherifdean Tella, Head, Economics department, Olabisi Onobanjo University in Ago-Iwoye, urged the federal government to make more oil than the estimated 1.6 million barrels per day. He claims that doing so will support governmental revenue.
“Ensuring we meet the OPEC benchmark in a business-friendly climate is germane to enhancing government fiscal revenues and effectively implementing the proposed budget.
“The rising budget deficit and the unending need to borrow to execute the proposed budget will be ameliorated,” Tella said.
He noted that the federal government could cut down the increasingly high cost of government to reflect the current economic times.
“The government revenues have been on a decline, and the public expects the political class to replicate that by reducing its allowances on travels in the budget.
“Even issues relating to the allocation of funds for constituency projects should be reduced because oftentimes it’s a duplication of federal projects or abandoned,” Tella said.
Additionally, Mr. Titus Okurounmu, a former director of the research division of the Central Bank of Nigeria (CBN), noted that the planned N20.5 trillion budget was ambitious given the nation’s prior income receipts.
Okurounmu suggested that the government implement some of the planned budget’s components in a more inventive manner.
“The authorities could adopt more private sector initiatives in fixing the capital component of the budget.
“Which deals with infrastructural renewals and developmental issues in our society,” he added.
Okurounmu pointed out that the federal government may make use of the vast opportunities in the mining industry to combat budgetary challenges.
Meanwhile, Mr. Nerus Ekezie, a former director of the National Association of Small and Medium Enterprises (NASME), asserted that the federal government should implement policies in the proposed budget that would strengthen the SME sector.
“Such initiatives could be in form of more interventions to the SMEs sector, devoured of partisanship, to have the necessary impact.
“Enhancing the sector and providing critical infrastructure is key to ensure they contribute adequately to the economy and government revenues through taxes,” he said.
He noted that the budget needs to accord the SME sector the right of place, saying, “it is instrumental to the growth and development of any emerging society”.
President Muhammadu Buhari has presented the “2023 Budget of Fiscal Consolidation and Transition” to the joint session of the National Assembly.
Buhari suggested setting the oil benchmark at N20.51 trillion for the entire year.
In the Medium Term Expenditure Framework (MTEF), which they passed, lawmakers set it at $73 per barrel.
Other factors include an estimated 1.69 million barrels of oil being produced each day, including 300,000 to 400,000 barrels of condensates.
Additionally, it includes the N435.57 to $1 exchange rate, a 3.75 per cent expected GDP growth rate, and a 17.16 per cent inflation rate.
The planned expenses are as follows: N744.11 billion in statutory transfers; N8.27 trillion in non-debt recurrent costs; N4.99 trillion for staff; N854.8 billion for pensions, gratuities, and retiree benefits; and N1.11 trillion for overhead.
Source: NAN
