ActionAid calls for upward review of Agric, Health, Education allocations
Says public debate needed before FG enters loan contracts
By Gabriel Ewepu – Abuja
A non-governmental organisation working to combat poverty and promote social justice in Nigeria, ActionAid Nigeria, Tuesday, called for upward review of Agriculture, Health, and Education allocations in the 2021 Budget Proposal presented by President Muhammadu Buhari to the National Assembly last Thursday.
This was contained in a statement signed by the Country Director, Ene Obi, where the organization made some observations on the total budget of N13.08tn with an aggregate revenue projection of 7,886tn, which is described as very ambitious. Given that the downward spiral trend of the economy compelled the Federal Government to review the 2020 budget, in which total Federal Government expenditure was revised downwards from N10.594 trillion to N10.523 trillion.
Likewise, key benchmark revenue assumptions were revised downwards. Crude oil price benchmark price was revised to $25 pb from $57 pb, crude oil production to 1.94 mbpd from 2.18 mbpd, and the average exchange rate adjusted from N305/$ to N360/$1. This revision of the 2020 budget was announced during the Federal Executive Council (FEC) meeting which held on May 13th, 2020.
According to the statement, there has been a continued shortfall in revenue from oil due to the Covid-19 pandemic, which may render Nigeria incapable of meeting her 2021 revenue targets.
It further pointed that a budget deficit of N5.19trillion is expected to be funded through loans from both the international and domestic institutions, which constitute about 24 per cent of the total Appropriation Bill, with dwindling revenue occasioned by falling oil prices, non-remittance, leakages, etc, the tendency that borrowing will continue in 2020 to fund the budget is likely. “This is a major concern as the debt profile keeps pilling and to substantiate this, the Debt Management Office (DMO) showcases the nation’s total debt stock at N31.009 ($85.897b) as of June 30th, 2021.”
The statement also added that as reported by the World Poverty Clock, Nigeria has overtaken India as the poverty capital of the world and the most vulnerable groups include women and children. Nigeria currently has more than 82m of its people dwelling under poverty.
The statement reads in part, “ActionAid Nigeria believes that poverty can be eradicated if rights, redistribution of resources and resilience are prioritised. It is in line with this belief that ActionAid Nigeria (AAN) has followed with keen interest the implementation of the 2020 budget and the presentation of the 2021 budget proposal to the joint sitting of the National Assembly on Thursday October 8th, 2020.
“The Health, Education, and Agricultural sectors are not yet given the attention required given their strategic importance in pioneering the economy.
“Following the observations above, ActionAid Nigeria recommends the following: Ministries, Departments & Agencies (MDAs) should adopt a bottom-up approach to budget creation. States and Local Governments should aggregate their own budgets, to exact deeper developmental impact in the rural communities. Above all, the budgetary process should be participatory and encompassing.
“The budget allocations in the 2021 budget to these 3 key sectors should be reviewed upwards, given that they are already falling below the international benchmarks. For example, for agriculture, the international recommended benchmark is 10%, according to the AU 2003 Maputo Declaration. Unfortunately for Nigeria, Agricultural allocation is mere 1.73%, health 4.16%, and education 7.54%. Further reduction will exacerbate poverty and inequality in the country.
“A coordinated framework should be established to ensure that funds allocated to Health, Education, and Agriculture are properly administered, ensuring value for money and an integrated approach; The budget should be devoid of vague and abstract terms, the budget information should be complete and concise. All allocations should be channelled towards concrete deliverables, targeting human and infrastructural development.
However, the statement called on the government to declare public debate before taking loans abroad.
“The Nigerian Government should open up public debate before entering loan contracts and should enhance its capacity to offset these loans before obtaining more of the same. Furthermore, loans should not be used for recurrent expenditures such as salaries, traveling allowances, etc”, it added.