The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) has welcome the timely presentation of Budget 2022 to the National Assembly by President Muhammadu Bhuari.
In a statement signed by the President, Ide Udeagbala Npom, the Association said the early presentation of N16.9 Trillion Budget, described as a Budget of Economic Growth and Sustainability, is in line with the trends of recent years of presenting the National Budget in a timely manner.
“It is therefore equally reassuring that the National Assembly has promised to process the appropriation Bill in a timely manner and before the end of the year, to sustain the January-December Budget cycle. We also welcome the decision to inject affirmative action into the Budget through its Gender component thus making it Gender friendly. We see this as a historic decision.” The statement read
The Association is however, worried by the upward swing in the borrowing to finance the Budget, warning that here is need to watch the rising debt profile. NACCIMA noted that an increase in deficit to N6.26 Trillion, which is to be funded by borrowing is worrisome. “While it is an accepted fiscal option across the world, for countries to resort to borrowing to finance short falls in their Budgets, there must be caution in what component of the budget will be financed by the Budget. A sustainable debt profile requires that borrowed funds must be used for critical infrastructure projects that will enable payback of these loans.”
According to the statement, there are speculations that the borrowings have been encouraged by projections that the Nigerian economic will grow by 2.4% in year 2022 well above earlier projected GDP growth of 1.8, %. It was also said that decision on scaling up borrowing is based on assurances of revenue from the prices of crude which now hover around $80 dollars well above $57 backed by projected, 1.88million barrels a day.
The Association however wishes to draw attention to the boom and burst cycle of international crude oil prices and cannot be relied upon as firm and assured sources of revenue. Rather there must be continued efforts to diversify the economy, improve significantly on non-oil revenue and deliver on upgrade of infrastructure and improvement in security situation. This is to enable increase in productive activities especially in the Agriculture sector.
“Perhaps most importantly the private sector should be encouraged to tap into the opportunities under the Budget. We therefore welcome the decision under the Budget to further strengthen the frameworks for concessions and public Private Partnerships (PPP) and that Capital projects that are good candidates for PPP will be developed for private sector participation.”