THE Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) the Chamber has called the move of the Federal Government to increase deficit and borrow as its funding strategy for the 2022 budget ‘worrisome’.
The National President, NACCIMA, Ide JC Udeagbala, made the statement over the weekend, where he also applauded the Federal Government’s decision to inject affirmative action into the N16.9 trillion Appropriation bill through its gender component to make it gender-friendly, describing it as a historic decision.
Udeagbala, however, said that the upward swing in the borrowing to finance the budget is worrisome to NACCIMA.
“There is a need to watch the rising profile of our debt. An increase in deficit to N6.26 trillion, which is to be funded by borrowing is worrisome,” he stated.
“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.
“There are speculations that the borrowings have been encouraged by projections that the Nigerian economy will grow by 2.4% in the year 2022 well above earlier projected GDP growth of 1.8%. It was also said that the 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-bust cycle of international crude oil prices and cannot be relied upon as firm and assured sources of revenue.
The NACCIMA President went on to say that, “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 an increase in productive activities especially in the Agric sector.”
Udeagbala further expressed NACCIMA’s delight on 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.
