What!!! Budget slash of 0.6%!!! It is unrealistic; 25% and above is more like it, says Atiku

Former Vice President Atiku Abubakar has come down hard on the Federal Government for its unrealistic review of the 2020 wondering why it has only seen it fit to slash the budget by a mere 0.6%, from ₦10.594 trillion to ₦ 10.523 trillion, represents a reduction of only ₦71 billion.
He said on Thursday in a statement, “Putting politics aside, this is grossly insufficient and betrays the fact we have lost touch with the current realities in the global political economy.
“For the avoidance of doubt, when this budget was presented to the National Assembly on Tuesday October 8, 2019, it was predicated on a projection that our nation would generate crude oil production of 2.18 million barrels a day, at an expected oil price of $57 per barrel.
“Today, that is no longer the case. Both our production, and the price of oil have been severely affected by the corona virus pandemic, to the extent that we have unsold vessels, and our income has tanked by more than 50%.
“Given that this is the case, how can anyone justify a reduction in expenditure of just 0.6%? We cannot be the only nation bucking the trend?
“Saudi Arabia, a nation with a much stronger production capacity than ours and with a larger global market share, as well as foreign reserves that is 12 times ours, has slashed her budget by almost 30%. Ditto for other oil economies.
“Nigeria cannot make up for the loss of expected revenue by taking out more loans and issuing out more bonds. Debt will be the death of our economy and bonds will put our people in bondage.
“The best way out of this economic quagmire is to reduce our expenditure. And a 0.6% reduction is no reduction. It is only window dressing.
“My counsel to the Federal Government of Nigeria is this: put Nigerians first and cut your coat, not according to your size, but according to your cloth.
“Realistically slash the budget. Every pork barrel has to go. The billions budgeted for the travels and feeding of the President and Vice President has to be reduced. The ₦27 billion budget for the renovation of the National Assembly has to go. The massive budgets to run both the Presidency and the Legislature has to be downsized. The budget for purchasing luxury cars for the President, his vice, and other political office holders must be jettisoned. Leave the salaries of civil servants alone, but reduce the salaries of political appointees. Sell eight or nine of the jets in the Presidential Air Fleet.
“Any budget slash that is less than 25% will not be in the interest of Nigeria. And beyond a budget slash, Nigeria needs a budget realignment, to redirect expenditure away from running a massive bureaucracy, into social development sectors like education, infrastructure, and above all, healthcare. We must invest in the goose that lays the golden egg – the Nigerian people.
“These are the types of sacrifices that we need in a time of crisis. We do not need empty gestures that will lead to empty treasuries.
“In times of austerity, no nation, not the least a mono product economy, such as ours, should be living in luxury at a leadership level. ”
Recall that the Federal Executive Council has approved the amendment of the Medium Term Expenditure Framework (MTEF) 2020-2022 and the slashing of the 2020 budget from N10.59 trillion to N10.523 trillion.
Briefing newsmen after the virtual Federal Executive Council (FEC) meeting chaired by President Muhammadu Buhari yesterday, Minister of Finance, Budget and National Planning, Zainab Ahmed, said the Council approved the new budget parameters to include $26 per barrel as crude oil benchmark; oil production pegged at 1.94 million barrels per day and an exchange rate of N360 to a dollar.
President Buhari had, in December 2019, signed the 2020 appropriation bill of N10,594,362,364,830 into law.
The budget was increased from N10.33 trillion to N10.594 billion by the National Assembly with Nigeria’s daily oil production rate at 2.18 million per barrel, but increased the oil benchmark price to $57 per barrel against the $55 proposed by the Executive.
However, the minister announced that the Council approved a revised budget of N10.523 trillion, a difference of N71.5 billion when compared to the approved budget of N10.594 trillion.
She said: “The revised budget is now in the total sum of N10.523 trillion, a difference of just about N71.5 billion when compared to the approved budget.
“This is because, as we cut down the size of the budget, we also have to bring in new expenditure previously not budgeted, to enable us adequately respond to the COVID-19 pandemic.
“The Federal Government, in this budget, will have direct revenue of funding the budget of N5.158 billion.
The deficit to this budget is N5.365 trillion and this will be financed by both domestic as well as foreign borrowing.
“The foreign borrowing we are doing for 2020 are all concessionary loans from the IMF which has already been approved and has crystallized, from the World Bank, Islamic Development as well as Afro EXIM bank.
There will also be some drawdown of previously committed loans for major ongoing projects that we will be drawing from both existing facilities as well as some special accounts with the approval of Mr. President and the National Assembly.
“And also revenue that we are expecting to realize from privatization. So the borrowing, the multilateral loans draw down coming from special accounts and coming from the privatization will fund the fiscal deficit of N5.365 trillion that we have in the proposed amendment of the 2020 budget.”
The minister also disclosed that the Council approved the ministry’s request to borrow $80 million from Islamic Development Bank on behalf of Ebonyi State to construct Abakaliki Ring Road.
She said: “While the Federal Government is the one borrowing from the bank, Federal Government will be on-lending this loan to Ebonyi State government.
“We have done our debts sustainability analysis that proves that Ebonyi State has the capacity to repay this loan.
“These Ebonyi Ring Roads connect 13 local governments in the states as well as the neigbouring Cameroon republic.”
▪ Additional reports by New Telegraph