Former Vice President and presidential candidate of the Peoples Democratic Party (PDP), Atiku Abubakar, has criticised the 2019 Appropriation Bill presented by President Muhammadu Buhari, describing it as inadequate to stimulate economic growth, create jobs and reduce poverty.
Atiku made his position known in a document titled “My Takeaways from 2019 Budget,” released after President Buhari presented the 2019 budget proposal to a joint session of the National Assembly on December 19, 2018.
President Buhari had said the proposed budget was designed to place the Nigerian economy on the path of inclusive, diversified and sustainable growth and continue efforts to lift citizens out of poverty.
According to the budget proposal, aggregate expenditure was projected at N8.83 trillion, comprising N4.04 trillion for recurrent expenditure, N2.31 trillion for capital expenditure and N2.14 trillion for debt servicing.
Atiku, however, argued that the proposal was based on assumptions that were too optimistic and did not adequately reflect the economic challenges facing the country.
He particularly challenged the Federal Government’s assessment of economic recovery, foreign investment, unemployment and foreign exchange reserves.
Atiku said the economy remained fragile despite the government’s claim that it had recovered from recession. He cited GDP growth figures for 2017 and the first three quarters of 2018 to support his argument that economic expansion remained weak.
He also referred to unemployment figures, stating that the unemployment rate had risen from 18.8 per cent in 2017 to 23.1 per cent in the third quarter of 2018.
According to him, the situation required stronger policies capable of expanding economic opportunities and creating jobs for Nigeria’s growing population.
Atiku Questions Foreign Investment Figures
The former vice president also questioned the government’s claims concerning foreign capital inflows.
He cited capital importation figures for the third quarter of 2018 and argued that foreign investment had declined compared with previous periods.
Atiku further referenced the World Economic Forum’s Global Competitiveness Index, which ranked Nigeria 115th among 140 countries in 2018.
He argued that the figures demonstrated the need for policies that would improve investor confidence and make the Nigerian economy more competitive.
On foreign exchange reserves, Atiku acknowledged that the reserves had increased but argued that the improvement was largely connected to higher international crude oil prices and foreign borrowing rather than what he described as comprehensive economic reforms.
He warned that Nigeria’s dependence on crude oil for foreign exchange earnings left the economy vulnerable to movements in international oil prices.
Agriculture Also Criticised
Atiku also questioned the Federal Government’s claims of progress in agriculture, citing what he described as a slowdown in agricultural growth.
He argued that the figures did not, in his assessment, demonstrate sufficient evidence that increased investment in the sector had produced the desired economic impact.
His central question was whether the proposed 2019 budget could deliver the inclusive and sustainable growth promised by the Buhari administration.
Atiku outlined six reasons why he believed the budget would not achieve that objective.
Six Reasons Listed by Atiku
First, Atiku argued that the 2019 budget was built on the weak implementation of the 2018 budget. He cited revenue and capital expenditure figures which, according to him, showed that significant portions of the 2018 projections had not been achieved.
Second, he described the 2019 proposal as a “business as usual” budget, arguing that it did not introduce sufficient fiscal reforms. He particularly criticised the continuation of fuel subsidy provisions, the existing foreign exchange arrangements and what he regarded as the relatively low allocation to capital expenditure.
Third, Atiku questioned some of the assumptions underpinning the 2019 budget, including the crude oil benchmark of $60 per barrel, projected oil production of 2.3 million barrels per day and an anticipated real GDP growth rate of 3.01 per cent.
He argued that fluctuations in the international oil market and Nigeria’s production levels could affect government revenue and make the budget’s revenue projections difficult to achieve.
Fourth, he described the proposed N8.83 trillion expenditure as too small to stimulate significant economic growth, create sufficient jobs and reduce poverty.
Atiku compared the size of Nigeria’s budget with the country’s estimated GDP and cited budget-to-GDP ratios in Bangladesh, India and Afghanistan as examples of higher public spending levels.
Fifth, he raised concerns about Nigeria’s fiscal position, particularly projected revenue, the continued dependence on oil revenue and the size of the budget deficit.
According to Atiku, the proposed N2.14 trillion allocation for debt servicing would place considerable pressure on government finances.
Sixth, he criticised the proportion of the budget allocated to recurrent expenditure and debt servicing compared with capital spending.
Atiku argued that a larger proportion of government spending should be directed towards infrastructure, economic diversification and other investments capable of supporting long-term growth and employment.
He consequently described the proposed budget as insufficiently developmental and argued that it would not adequately address unemployment, poverty and other economic challenges confronting Nigerians.
Atiku Presents Alternative Plan
Atiku said an alternative economic approach was necessary and presented his proposed policies under what he called The Atiku Plan.
He promised that an administration led by him would prioritise unemployment and poverty reduction while seeking to accelerate economic growth and create opportunities for young Nigerians.
According to him, the private sector would play a central role in driving economic expansion, with his proposed administration creating what he described as a more supportive environment for businesses to invest and operate.
He also proposed increasing the share of capital expenditure in the federal budget to at least 40 per cent initially.
To achieve this, Atiku said his administration would seek to reduce recurrent expenditure, improve spending efficiency, ensure borrowed funds were used for economic diversification and infrastructure, and promote greater public-private partnerships in infrastructure development.
On fiscal management, he promised significant restructuring of government finances, including a review of the subsidy regime and measures to address what he described as losses arising from inefficiencies in the foreign exchange market.
Atiku said resources recovered through such measures would be redirected towards critical sectors of the economy.
The proposals formed part of Atiku’s campaign agenda ahead of the 2019 presidential election, in which he contested against the incumbent President Muhammadu Buhari.
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