Economic experts have tasked the Federal Government to look for non-debt means to finance the budget to reduce deficit and borrowing which are on the increase in Nigeria.
Skyray news reports that the experts stated this in Ibadan on Thursday at the Budget Seminar 2023 organised by the Department of Economics, University of Ibadan (UI) and in conjunction with the UI Eco Alumni Council.
The Interim Chairman, of UI Eco Alumni Council, Dr Ayo Teriba, emphasised that the Nigerian budget as it is, is unrealistic hence the need to explore other non-debt means to ensure its realisation.
According to him, most of the time budget revenue is inflated and we really cannot get that level of revenue.
“This year we are looking at N10trn and last year was N7 trn and our expenditure is also very high.
“Nigeria has to think of how to move away from borrowing because the level of our debt has gone up, to about N77trn.
“We should be more creative with the way we finance our budget. In doing this, Foreign Direct Investment (FDI) should be stressed,” he said.
Also, Prof. Adeola Adenikinju, Head of Economics, Department, University of Ibadan
Adenikinju said when FDI is employed it comes with new technology “because you are trying to get foreign capital to come in and invest to create jobs, value addition and so on.
“And if the environment is very conducive it will lead to having a more stable income for the country. FDI is not very volatile unlike foreign portfolio investments or exports.
“We are sitting on a lot of assets and if we properly value them, foreigners can buy shares, they acquire equity and then that will bring in more money for the government, so these are non-debt ways to finance the budget.
Speaking on the difficulty in the repatriation of funds in Nigeria, Adenikinju said If the country is going to do FDI, then it must create an environment that will facilitate it.
“If you want to attract people you must also assure them that they can take their money away. We need to put certain measures in place that will support more foreign direct investment,” Adenikinju said.
Prof. Lanre Olaniyan, Dean, Faculty of Economic and Management Science, University of Ibadan said the seminar was to look at the workability of the 2023 budget.
“The challenges have been highlighted as well as the headwinds that can create problems.
“We have discussed that some of the assumptions made for the budget are impracticable, especially concerning the budgeted revenue as there are possibilities that Nigeria would not be able to achieve them.
“The deficit position and the issue of the debt service and borrowing that are embedded in the budget are serious challenges.
“The summary is that past experiences have shown that we may not attain the target set on the budget.
“The seminar also identified that many of the issues that were in the National Development Plan (NDP) 2021 to 2025, which the budget is expected to contribute to have not been done so, the budget appears to be working differently from what the NDP thinks it should,” Olaniyan said.
He said when the budget is prepared it has to be in sync with the population structure. “While we have a low tax-to-revenue base is because we are not considering the proportion of Nigerians that are working.
“Only 17 per cent of Nigerians are employed and it is their income that we are taxing, then we can only expect that tax revenue to GDP will be low.”
Dr Afolabi Olowookere said the Nigerian budget is small though it rose from N5.07 trillion in 2015 to N 21.83 trillion in 2023 but has yet to be sufficient to cater for the size of the nation’s economy if compared to other nations.
He said analysis of the budget showed that Nigeria spent a lot on administration and security and less on the economy but this needs to improve.
“The size of the Nigerian budget has risen significantly over the years but when compared to the size of the economy, Nigeria’s budget is relatively small.
“Nigeria needs to spend more, therefore It needs to earn more in terms of taxes and efficient administration, otherwise the deficit can become unsustainable.
“The country needs to optimise the relationship between capital and recurrent expenditure; plug leakages and prioritise projects to ensure impact assessment as well as leverage the private sector in the provision of basic infrastructure,” Olowookere said.
In his remarks, the Chairman of the event, and a retired Professor of Economics, Prof. Ibi Ajayi said the government must cut wastage and ensure transparency.
He noted that insecurity must also be tackled as well as following rules and regulations of economic laws for a robust economy.