Why 2019 budget is dangerously pro-recurrent

I won’t preoccupy myself with such meager increase because as important as N86bn increase could sound for an economy of our size such increase should be what we should be worried about especially if it is targeted at infrastructure or national security. The cause for alarm should only be if it is to be spent […]

I won’t preoccupy myself with such meager increase because as important as N86bn increase could sound for an economy of our size such increase should be what we should be worried about especially if it is targeted at infrastructure or national security.

The cause for alarm should only be if it is to be spent on the further growth of recurrent especially to further grow the National Assembly’s upkeep.

I have always said it that our budget to GDP ratio is the lowest among peer economies. This is because our tax to GDP along with our tax to budget ratio is embarrassingly the lowest among peer economies.

This is the reason our with recurrent spending of over 80% of our fiscal spending our infrastructure deficit has been dangerously growing at such a geometric progression while infrastructure investment at best remains stagnant.

There is no way we can expect to become a growing economy without a budget to GDP ratio of at least 30%. But also there is no way that can happen without government drastically growing its revenue especially tax revenue to as high as 30% of GDP and its tax to budget ratio to as high as 80%.

But for us to get our tax deficit addressed, we must also take some unconventional tax increase steps.

Paying off a major portion of our debt rather than spending over 69% on debt service should have been what ought to preoccupy any serious government in the country.

We must do this so as to be able to curtail the country’s dangerous trend of getting to that point where our debt service to revenue ratio will reach 100% point. This is because at this point where national revenue is equal to national debt service obligations, certainly at that point we are in a state of bankruptcy

Odilim Enwegbara, Lagos