The spokesman for the South-East chapter of All Progressives Congress (APC), Mr Osita Okechukwu, has dismissed the criticism that President Muhammadu Buhari’s 2016 budget deficit of N2.2 trillion is unrealistic.
Okechukwu, in a statement yesterday in Abuja, said the “fears over the N2.2 trillion 2016 budget deficit is misplaced”.
According to the APC chieftain, the fears are misplaced because Nigerians are about to witness the harvest of the president’s high profile ratings by the international community.
“This is the political capital which will earn Nigerians the premium of borrowing for critical infrastructure. Both local and international investors have implicit confidence that Buhari will not squander their money. As they say, the difference is clear”, he posited.
The 2016 Budget estimate presented to the National Assembly last Tuesday had a proposal of N6.08 trillion with revenue projection of N3.86 trillion resulting in a deficit of N2.2 trillion.
The deficit, which is equivalent to 2.16% of Nigeria’s GDP, will take overall debt profile of 14% of our GDP with President Buhari disclosing that the deficit will be financed by a combination of domestic borrowing of N984 billion and foreign borrowing of N900 billion, totaling N1.84 trillion.
In spite of the obstacles to investment in Nigeria at the moment, Okechukwu stressed that President Buhari had the political capital to borrow over N3 trillion in the next year for critical infrastructure.
He, however, advised government to use Sovereign Guarantee to develop critical infrastructure as it happened in Sweden and Philippines, saying the option would not mortgage the country.
According to the South-East APC spokesperson, the Sovereign Guarantee option became imperative because of the rapid dwindling oil revenue and acute budgetary constraints, adding that “it mitigates the fears over the funding of the N2.2 billion deficit”.
“Despite direct borrowing of N984 billion from domestic market and N900 billion from foreign market, one will advise Mr President to consider the use of Sovereign Guarantee as a keystone for Special Purpose Public Interest Projects.
“The success of Private-Public-Partnership, especially ones spewed with Sovereign Guarantee hinges on the integrity, honesty, transparency and predictability of Mr President.
“Our fears of borrowing either directly or indirectly is that we are witnesses on the paradox of how a former president borrowed $8.3 billion for old gauge Kano – Lagos rail line and how recently another former president, on hand got approval from the National Assembly to borrow $1 billion to fight Boko Haram insurgents, and at the same time presided over the spraying billions of unappropriated dollars in the name of the same Boko Haram. Buhari is different”, Okechukwu stated.