Former Vice President and Presidential candidate of the People’s Democratic Party (PDP) Atiku Abubakar, has described the 2019 budget Proposal presented to the National Assembly on Wednesday by President Muhammadu Buhari as “fundamentally flawed” adding that it failed to meet the current realities on the country.
President Buhari presented the 2019 Budget Proposals to the Joint Session of the National Assembly on Wednesday 20 December 2018. Its key aim is to, according to the President, ‘further place the economy on the path of inclusive, diversified and sustainable growth in order to continue to lift significant numbers of our citizens out of poverty’. The 2019 Appropriation Bill proposes an aggregate expenditure of N8.83 trillion for the year of which N4.04 trillion is recurrent, N2.31 trillion capital and N2.14 trillion will be devoted to debt service.
Atiku in a statement he personally signed and made available to BusinessDay on Sunday by his Media Adviser, Paul Ibe, entitled “My Takeaways from Budget 2019” said the planned spending is lower than the 2018 budget by N300 billion adding that allowing for 11% inflation rate, the budget’s real value is N7.95 trillion.
“The proposed budget as presented is fundamentally flawed. It deliberately ignores and fails to address current realities and pretends, as Mr. President asserts, ‘we are on the right direction’. On the contrary, the 2019 budget is built on very shaky foundation and makes very generous, often wild and untenable assumptions which pose significant risks to its implementation. It will be a disservice to the country if we ignore these fundamental flaws,” he said.
The former Vice President added that several inaccurate claims litter the budget document in an attempt for President Buhari to whitewash the regime and hide their monumental failure to improve, even minimally, the welfare and living standards of much of the population. “I see the rhetoric of ‘inclusive, diversified and sustainable growth’ as no more than an amplification of the APC-led government’s renewed propaganda to hoodwink the citizens into believing that there is ‘light at the end of the tunnel’.
“Few of these claims by Mr. President are that ‘we have recorded several successes in economic management’, that ‘the economy has recovered from recession’, that ‘foreign capital inflows including direct and portfolio investments (have) responded to improved economic management and that ‘we have had a sustained accretion to foreign exchange reserves’ etc.
“In reality, the economy is yet to recover from the 2016/2017 recession as it remains severely stressed, extremely fragile and vulnerable to external shocks. GDP growth declined from 2.11% in 2017 to 1.9% in Q1 and to 1.5% in Q2 of 2018. In Q3 of 2018 there was only a marginal increase of 0.3% to 1.8%.
“In its current form, the local economy is not dynamic enough to journey to their so-called NEXTLEVEL. For the year 2019, a general slowdown in the real growth rates of economic activity in both the oil and non-oil sectors has been projected at 1.9% by the World Bank. This rate is well below the 2019 budget projection of 3.01% and is not enough to create the needed jobs for the growing population of the country or for the attainment of the SDGs,” Atiku said.
The Wazirin Adamawa also said that as a sign of the weakness of the economy, the rate of unemployment has increased from 18.8% in 2017 to 23.1% in Q3 of 2018 adding that today, close to 20 million people are unemployed compared to 7.2 million people in 2014. He lamented that these high rates of unemployment represent both a significant distortion in the economic system and a lost opportunity for critical national development and could potentially threaten social stability.
“Sadly, Foreign Direct Investment (FDI) is limited and is declining. In Q3, 2018 capital inflows were US$2.855.21 billion showing a decrease of 48.21% compared to Q2 2018 and 31.12% decrease compared to Q3 2017. Indeed, its current level is the lowest since Q2, 2017. Value of Foreign Portfolio recorded at US$1.7 billion represents a decrease of 58.2% compared to Q2 2018. It also represents a 37.7% decrease compared to the Q3 of 2017.
“Finally, it is very significant to note that capital importation in 2014 (Q3) was US$6.5 billion and in 2018 (Q3) US$2.9 billion. This shows US$3.6 billion or 55% decline since the regime came into power.
“So, contrary to Mr. President’s assertion, capital importation actually shrinks! In reality Mr. President should expect no less. It is a fact that under his watch and resulting from his actions or inactions, investor confidence in the economy has waned like never before in Nigeria’s history. Nigeria remains an uncompetitive economy as demonstrated by the recent World Economic Forum (WEF), Global Competitiveness Index which positions Nigeria as 115th of 140 Countries.
“The Report shows that Nigeria has moved three places down, contrary to Mr. President’s claim that ‘we are moving in the right direction’. Nigeria remains one of the most difficult places to do business as evidenced by the massive outflows of capital in recent times,” Atiku said.
Although Atiku admitted some increases in gross reserves. He however, noted that the so-called ‘successes’ recorded did not emanate from any coherent and comprehensive economic policies of the Federal Government. He said that the ‘sustained accretion’ to foreign exchange reserves resulted from increases in international prices of Brent Crude and foreign borrowing. “Given our total dependence on the oil sector for foreign exchange earnings, any turbulence in the international oil market will lead to reversals. This cannot be counted as ‘success’. The acclaimed ‘success’ was simply by the Grace of God,” he said.
“Even Mr. President’s acclaimed successes in agriculture can be interrogated. In spite of the so-called ‘increased investment across the entire value chain from agricultural inputs to farming and ultimately, food processing’, agricultural growth is well below historical levels.
“The growth in agricultural production declined from 3.48% in Q3 2015 to 1.91% in Q3 2018. Similarly, in 2018, growth has been declining from 3% in Q1, to 1.19% in Q2 and 1.91% in Q3. There is little evidence to show that ‘increased investment’ in agriculture has yielded positive results,” he added.
Atiku further lamented that the budget does not have the potential to lift Nigerians out of poverty and cannot help to diversify the economy in any significant way.
Innocent Odoh, Abuja
