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Buhari’s regime borrows ₦31tn, to leave ₦39.12tn debt for successor

The National Assembly has approved or at least received budget estimates worth ₦93.453tn from the President, Muhammadu Buhari, in eight years.

Out of the ₦93.453tn budgeted from 2016 to 2023, a total of ₦67.4tn has been committed to recurrent expenditure, including the payment of salaries and emoluments of civil servants and legislators.

This amounts to 72.1 per cent of the entire budget devoted to the recurrent expenditure in the life of the Buhari regime.

The administration met a debt of ₦12.12tn on June 30, 2015, but it increased it to ₦42.84tn by June 30, 2022, according to statistics obtained from the Debt Management Office. The increase represents 253 per cent growth over the period.

A breakdown shows that Buhari presented a budget of ₦6.061tn in 2016, his first after a populist election in 2015. The budget, however, heralded Nigeria’s first recession under the regime.

The budget was increased to ₦7.44tn in 2017; ₦9.1tn in 2018; ₦8.916tn in 2019; and ₦10.8tn in 2020. The budget for 2021 and 2022 rose to ₦13.6tn and N17.126tn, respectively. The estimates presented to the National Assembly last Friday for 2023 put the figure at ₦20.51tn.

The debt problem

The country’s debt rose by N30.72tn between July 2015 and June 2022, according to data released by the DMO.

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According to the DMO statistics, Nigeria’s total debt as of June 30, 2015 stood at N12.12tn.

By June 30, 2022, the figure had risen to N42.84tn, which showed an increase of 253.47 per cent. Despite the high increase in debt over the years, the government still plans to borrow ₦8.4tn in 2023.

Just like the massive rise in debt, there has been a huge increase in expenditure budget under Buhari.

The Federal Government has increased the projected expenditure in its annual budget by about 238.45 per cent between 2016 and 2023, according to reports analysed by one of our correspondents.

According to data from the Budget Office of the Federation, the government budgeted to spend ₦6.06tn for the 2016 fiscal year.

However, in the recently proposed 2023 budget, the projected aggregate expenditure was pegged at ₦20.51tn, more than thrice the amount budgeted in 2016.

In the 2023 budget, the government’s ₦17.12tn projected expenditure consists of ₦6.9tn recurrent expenditure, ₦5.9tn capital expenditure and ₦3.9tn for debt servicing.

Statutory transfers amount to ₦744.11bn; non-debt recurrent costs, ₦8.27tn; personnel costs, ₦4.99tn; pensions, gratuities and retirees’ benefits, ₦854.8bn; overheads, ₦1.11tn; capital expenditure, ₦5.35tn, including the capital component of statutory transfers; debt service, ₦6.31tn; and sinking fund of ₦247.73bn to retire certain maturing bonds.

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Despite the huge allocations, the budgets have failed to trickle down to the productive sector of the economy.

Saturday PUNCH gathered that Nigerian manufacturers had slashed their investments by 56 per cent in the last seven years, reflecting a sector buffeted on all sides by poor policies and economic headwinds.

Between 2016 and 2021, manufacturers’ investments tumbled from ₦489.44bn to ₦217.22bn, according to data collated by the Manufacturers Association of Nigeria.

“How many companies in our sector are still in operation? Wempco has shut down; WAHUM is struggling, and the rest are just there. When we come for meetings, we will not be more than 11,” the Chairman of Qualitek Industries, Oluyinka Kufile, who is a major player in the aluminium and steel sector, said.

Kufile attributed the situation to a combination of poor policies, arguing that Nigeria had yet to understand its true direction in economic diversification.

The Nigerian economy has witnessed two recessions within the period – one fuelled by a foreign exchange crisis and the other by COVID-19 pandemic. But the responses of the federal and state governments to issues of the economy have been poor, according to analysts.

Insecurity has worsened over the period and the foreign exchange crisis has reached its crescendo with the naira-to-dollar exchange rate rising from ₦197/$ to ₦430-₦442 in the official market over the period. A dollar sells for ₦735-₦745 at the parallel market.

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According to the Deputy President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, the situation is caused by poor foreign exchange and weak policies. He urged the government to eliminate subsidies and create a more convivial environment.

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