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2022 Budget: Analysts fault NASS on high recurrent expenditure

Citing Nigeria’s revenue challenges, analysts at Cowry Asset Management Limited have said that the National Assembly’s approval of N6.9 trilion for recurrent expenditure as against N5.4 trillion for capital projects in the 2022 budget, could lead to the Federal Government grappling with high debt stock and debt service next year.

The analysts, who stated this in a report released at the weekend, noted that while the National Assembly’s decision to increase the estimated bill of N16.39 trillion presented by President Muhammadu Buhari by N800 billion to N17.13 trillion was a bold move given that the country needs a lot of funds to build infrastructure necessary for economic growth, the high recurrent expenditure means that only a small portion of the funds would be used to build capital projects. The analysts said: “Cowry Research feels that the N17.1 trillion budget is an audacious one, considering the amount of infrastructure that the country needs to support economic growth. Nevertheless, the N6.9 trillion on recurrent expenditure, as against the N5.4 trillion to be expended on capital projects, appears outrageous in the face of low revenue income.

With the high recurrent expenditure, we expect a small portion of anticipated revenue to go into capital project funding, leaving FG with high debt stock and debt service in the coming year.” Although the National Assembly had explained that it increased the estimates presented by the President so that additional revenue would be allocated to the agencies that came forward with additional requests that were not captured in the budget, analysts have questioned the move, citing uncertainty in the global oil market occasioned by the omicron variant of COVID-19. For instance, in his reaction, the Chief Executive Officer of Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said increasing the budget was unrealistic at this time.

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