Funke Olaode in Washington, D.C.
The Executive Director, Civil Society Legislative Advocacy Centre (CISLAC) Auwal Ibrahim Musa (Rafsanjani) has called on the federal government to address the economic crisis facing the nation before it gets out of hand. Rafsanjani stated this during an exclusive interview with THISDAY during the on-going IMF/World Bank Annual Meetings holding in Washington, D.C., United States.
While lamenting that the public finance integrity of the nation is probably at the lowest debt, he noted that the debt profile had defiled all economic prudence frameworks existing in the laws.
While analyzing the 2023 budget presented by President Buhari on the 7th of October 2022, the budget estimate as contained in the bill is N20.5 trillion with borrowing to the tune of N8.8 trillion, he said if the budget scales through, Nigeria’s debt stock will move to N50.8 trillion. He said it is worrisome and also scary, considering the state of the economy. “In this situation, it looks like nothing else than escalated poverty and exacerbated austerity.”
On the cause of the economic woes, Rafsanjani said one of the problems is tax administration, which has led to the leakages that exist within the financial architecture of Nigeria as a country. This, he said, has created a default opportunity for ineffective taxation and consequently failure in optimizing revenue required for national development.
Another problem identified by the renowned activist is extractive sector governance. He observed that the organised corruption in the oil and gas sector is a major issue that is expressed in several ways including oil theft and all other forms of sabotage within the trade value chain – fuel subsidy and other unproductive incentives.
Rafsanjani said: “This trend has consistently left us in a situation where this revered sector is rather sapping revenue from the government instead of contributing substantially to fund developmental projects in Nigeria.
“For me, absence of an economy has contributed largely to the economy woes. Like the saying goes, ‘If you fail to plan then you are planning to fail.’ Every government should constitute an economic team of technocrats saddled with the responsibility of advising the President on economic issues at any given time in the life of every regime.
The absence of such a critical team leaves room for knee-jerk approach to economic policies and interventions which lots of time falls short of. Although this essential spending is being made by our governments today, the debate over how to deal with the debt generated by the COVID-19 crisis will be of vital importance to Nigerians.
“The consistent and ever-increasing budget deficit trend is a strategic way of getting capital projects out of the space as most of the revenue are channeled towards debt servicing and at most recurrent expenditure. This means that Micro, small and middle industries who are unable to provide basic infrastructural needs to operate will be closed down and the ones that can, will be producing at a very high cost and in-turn cannot compete comparatively with their international counterparts.”
“The legislature’s primary mandates are oversight, law making and representation. The legislator is never saddled with the responsibility of implementing projects at any level of government. This is arguably putting the constituency project concept as an economic misplaced priority.
Also, owing to the fact that these funds has never been accounted for, nor has it ever had any resemblance of proper management in the past. We believe that it is better for the law maker to concentrate on their primary mandates but ensure that the executive implements any project as provided by the appropriation Act within a fiscal of the government.”
In his recommendations, CISLAC boss said to get out of this mess, the National Assembly mustn’t be in a hurry to just pass the 2023 Appropriation bill until they have assembled a team of economic experts in conjunction with the executive, who will work out alternative source of funding the budget deficit other than borrowing.
Also, use of tax incentive must be productive and reduce budget size and waste by weeding out frivolous items which have always been featured in the budget year in year out.
“This will also look at a possible reduction in the budget size and make it more reasonable and realistic as we are not in any budget increment contest,” he concluded.
