The Deputy President of the Lagos Chamber of Commerce and Industry (LCCI) Gabriel Idahosa, has criticised the Federal Government’s decision to retain fuel subsidy in the 2023 budget.
This is against the backdrop that lawmakers on Friday approved N1.7 trillion for payment of subsidy on Premium Motor Spirit (PMS) popularly known as petrol, as against the proposed N3.6 trillion meant to span till June 2023.
In a chat with The Punch, Idahosa said fuel subsidy should have ended by January this year, therefore it wasn’t expected to be added to the 2023 budget.
He said the government is staring down another difficult race with regard to financing a budget that is far above its expected revenue.
Idahosa however opined that the N1trillion allocated to the Police Service Commission was grossly insufficient and would mean an understaffed police force incapable of addressing the nation’s mounting security crisis.
Also speaking, the Director-General, of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Olusola Obadimu, described the budget proposals as unhealthy for the productive sector.
He noted that the Federal Government’s plan to borrow N8.4tn while projecting debt servicing at N6.3tn would translate to merely borrowing to service existing debts.
He said, “It doesn’t look good at all. This is not good for productivity. I think this budget is targeted mainly at the upcoming elections. It is not targeted at tackling our weak infrastructure or creating an enabling environment for businesses. We have to adopt fiscal discipline along the line.”
He said the government have to start cutting their coats according to their clothes, adding that there is an urgent need to look for more ways to start earning foreign exchange.
Obadimu lamented that despite budgeting trillions of naira in previous budgets, the Buhari regime “has nothing to show for it.”
In his own reaction, the Chief Executive Officer of the Centre for the Promotion of Private Enterprises (CPPE,) Dr Muda Yusuf, said the budget had further shown a troubling fiscal outlook for Nigeria.
He observed that the deficit would grow more than what was projected in the budget before the year ends, and that financing from the Central Bank of Nigeria(CBN) could also accelerate.
Yusuf advanced that the 2023 budget has further amplified the troubling fiscal outlook for the economy, as expenditure continues to accelerate amid consistent weak revenue performance.
“We have a budget of N20.51 trillion and a revenue projection of N9.73 trillion. This is a deficit of N10.78 trillion. In all probability, the deficit will be much bigger by year-end because of the track record of revenue under-performance over the last couple of years,” he noted.
Yusuf also explained that there are possibilities to see an acceleration of the CBN financing of the fiscal deficit given the revenue performance trajectory.
He added: “The public debt stock is growing and currently at N42 trillion. With additional new borrowing of N8.8 trillion, the debt profile will be getting close to N50 trillion by May next year.”