By Rukayat Moisemhe
Lagos, Oct. 7, 2021 The Centre for the Promotion of Private Enterprise (CPPE) says the 2022 appropriation bill is generally realistic, but for the assumptions of exchange rate of N410.15 per dollar and oil production of 1.88 million barrels per day.
Dr Muda Yusuf, Chief Executive Officer, CPPE, made this known in an interview with the News Agency of Nigeria (NAN) on Thursday in Lagos.
The News Agency of Nigeria (NAN) reports that the 2022 budget proposal of N16.39 trillion is 25 per cent higher than that of 2021 — N13.08 trillion.
Yusuf tasked government on more realistic budgetary assumptions, particularly in the context of recent trends of weak revenue performances.
He noted that oil output had continued to suffer setbacks as a result of security challenges faced by oil producing companies and contention with numerous policies and regulatory challenges.
Yusuf said that like the previous budgets, the major worry around the 2022 budget proposal is that of fiscal sustainability, especially in the context of recent trends of weak revenue performance.
He said that revenue performances over the years had consistently fallen significantly below targets, and the 2022 revenue outlook may not be different.
According to him, the 2022 fiscal year will be characterised by factors such as high risk that the deficit would exceed the budgeted threshold, and sustained debt challenges among others.
“The Central Bank of Nigeria (CBN) financing of fiscal deficit would likely persist and this has serious consequences for inflation because of the profound impact on money supply growth.
“Capital budget will be financed entirely from borrowing as the finance minister already hinted that government revenue could barely cover recurrent expenditure and debt service.
“The way forward for the economy in the light of the budget rigidities is to ensure that the security problems are fixed to recreate the environment for increased real sector activities.
“There must also be a review of the foreign exchange policy regime to reduce distortions, eliminate arbitrage opportunities, minimise uncertainties, reduce exchange rate volatility and mitigate investment risks,” he said.
Yusuf urged the government to, in line with the Fiscal Responsibility Act,
discontinue the accumulation of commercial debt because of sustainability concerns.
“Government must also refrain from imposing new excise duties on the manufacturing sector, demonstrate the political will to deal with the crisis at the Lagos ports and align CBN financing of deficit strictly to the provisions of the CBN Act,” he said
2022 Appropriation Bill: CPPE tasks Govt. on more realistic assumptions
By Rukayat Moisemhe