09 October 2020 By Georgina Humphrey
The Coalition of United Political Parties, CUPP has described the early submission of the 2021 budget proposal as a step in the right direction.
This is contained in a statement signed by the National Secretary
Of CUPP, Peter Ameh in Abuja.
It explains that submission of the budget proposal will give the National Assembly sufficient time to consider the budget and also give the Ministries, Departments and Agencies time to defend their budget proposals.
CUPP states that the budget parameters and assumptions are realistic except the exchange rate of NGN379 to one USD.
“The exchange rate is unrealistic due to differing exchange rate windows being operated by the Central Bank of Nigeria which distorts projections by the private sector which usually requires forex for their day to day operations.
The statement notes that the Gross Domestic Product, GDP projected at 3% is a little ambitious in view of the impact of the COVID- 19 on the economy which is expected to linger beyond next year.
It adds that the budget proposal for the fiscal year 2021 seems to have set the right priority with the bulk of capital spending going to the Ministries of Works and Housing, Power and Transportation for the first time in over 16 years.
The statement also explains that the capital allocation to Education and Health sectors are more than that of Defence which is an indication of a departure from the stick approach to carrot approach.
It describes the idea of borrowing over N4 trillion to finance the budget as worrisome as over three trillion was allocated to debt servicing alone.
“The N13.08 trillion estimated budget is a huge amount of money to make impact but high cost of servicing debt which is above N3 trillion is very massive and may set back the economy”
According to the statement, Chief Ameh explained that all the budget assumptions look fairly realistic if monetary and the fiscal authorities will match their words with action to drive the economy forward.