President of the Senate, Dr. Bukola Saraki has described Nigeria’s recovery from economic as fragile, stressing that the fundamentals underlying the recovery remain weak, and if unchecked, can lead to dire consequences. In a speech he delivered at the budget presentation by President Muhammadu Buhari to the National Assembly on Wednesday, Saraki observed that the economy still runs on oil and very little progress has been made in terms of diversification.
He added that as a result, the expansionary budget policy in effect since 2016, which was aimed at raising spending and stimulating growth in the economy, was not matched by achievable revenue targets.
According to him, the corollary is higher and rising deficit as well as a considerable debt burden, all due to an unsustainable fiscal stance. Saraki said, “Without doubt, the last three–and–a–half years have been eventful ones at the global level and in our domestic economy. From dips in oil prices to major shifts in the economic landscape, crude oil production shut-ins and security challenges, the economy and Nigerians have been directly impacted by these events.
“Many businesses closed down and many people lost their jobs during the recent recession. In the same period, we lost innocent citizens to insurgency in parts of the North East, thousands were displaced, and many lives also lost due to clashes between farmers and herders, in addition to the general hardship unleashed by unstable economic winds.
“These are some of the security challenges we have faced. We must take them head-on; it is a battle we must win as a country. It must be admitted that we are not there presently. For one, these security challenges now pose a threat to the viability of the agricultural sector.
“This is clear in the marked reduction in agricultural output observable since the first quarter of 2018. There is the need for more efforts by all. We here are prepared to give all necessary support to the Executive. We stand ready and committed to assist in every way we can, in order to ensure food security and the protection of lives and property”.
He bemoaned the under–performance of independent revenues, saying it is straining government’s ability to meet its expenditure, especially investments in critical infrastructure.
This, he said, further exposes government to higher deficit levels which have been largely financed by borrowing, stressing that there was urgent need to address the lapses.
“To be clear, two scenarios will play out if we do not deal decisively with challenges to revenue. These would be to accommodate higher debt with higher repayment costs, which is not sustainable or to reduce the capital budget, which would mean a slow-down in government investment in critical infrastructure. This, again, does not aid growth or economy development.
“Mr. President, it is for these reasons that the National Assembly required that the 2018 Budget proposal and future ones be accompanied by a Finance Bill, which would give credence to the financial proposals of government.
THE NATION
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