Ndubuisi Francis and Kelvin Okofu in Abuja
A civil society organisation (CSO), Centre for Social Justice (CSJ) has enjoined the National Assembly to ask President Muhammadu Buhari to withdraw both the proposed 2017-2019 Medium Term Expenditure Framework (MTEF) and the Medium Term Borrowing Plan (2016-2018) in order to revise both to align with the capital projects that should demand a staggering $30 billion loan.
It also urged the lawmakers to ask the president to provide a detailed borrowing plan that shows at what point in the three-year period a particular amount will be borrowed and from what sources.
This, CSJ argued, will help to show if the request for the approval of medium term borrowing plan is a critically thought-out plan or not.
These were part of the recommendations of the CSO in its “Review of the 2016-2018 Medium Term Borrowing Plan of the Federal Government of Nigeria: Implications for Debt Sustainability.”
In the review, the Lead Director, CSJ, Eze Onyekpere, said a lot of issues still needed to be clarified in the request for the approval of the Medium Term Borrowing Plan (2016-2018) submitted by President Buhari to the National Assemly. One of such issues, CSJ said, bothers on the disagreement between the total value of capital projects in the proposed MTEF (2017-2019) and the amount proposed to be borrowed between 2016 and 2018.
“Assuming the federal government would spend all its annual revenues on recurrent expenditure items throughout the two-year period and all capital projects will be financed with proceeds from the proposed loan, it is clear from our discussions that the proposed loan is still higher than the capital projects that the Federal Government of Nigeria has identified so far in the 2016 approved budget and 2017-2019 Medium Term Expenditure Framework,” the CSO observed.
CSJ also advised that the Director General of the Debt Management Office be invited to proffer policy recommendations on the basis of the pessimistic scenarios observed in the findings of the Debt Sustainability Analysis exercise of the debt management technical team.
It recommended that the National Assembly asks the President to follow the stipulations of the Fiscal Responsibility Act (FRA) to wait for the full approval of the submitted MTEF (2017-2019), which should serve as the basis for any proposal to borrow.
It also asked the lawmakers to request that Buhari follows the FRA to revise downwards the proposed amount in the Medium Term Borrowing Plan (2016-2018) in order to allow same to correspond to the total budget and proposed capital expenditures within the years.
It equally urged the lawmakers to ask President Buhari to provide detailed repayment plan in accordance with the FRA as well as provide forecast (with justification) of the sources of revenue that will be used in servicing the debts at maturity.
Also analysing the 2017-2019 MTEF and Fiscal Strategy Paper (FSP), CSJ recommended that future MTEFs should be submitted to the National Assembly immediately after endorsement and must be done by the Federal
Executive Council in June in line with the provisions of the act.
The MTEF should be sent to the NASS in July before the commencement of the mid-year legislative recess. For this will enable the legislature sufficient time to analyse and approve the MTEF and for actual preparation of budgetary estimates to start on time.
The Medium Term Sector Strategies (MTSS) should precede the preparation of the MTEF and all relevant stakeholders should be brought on board during the preparation process, it further recommended.
“The MTEF should be anchored on consultations with states and designated agencies of government. The Minister of Budget and National Planning should also open up the process for consultation with diverse stakeholders including the organised private sector and civil society.
The process and fact of the consultation should be documented in the MTEF as provided in the act.
“Nigeria needs a new overarching and fundamental economic policy document and vision to coordinate all sectorial activities and introduce coherence and convergence into sector policies, ” CSJ recommended.