Proposed size reduction of 2019 Budget laudable – Prof. Uwaleke

…urges FG to reduce MDAs’ overheads, wastages

By Etuka Sunday

The Head of Banking and Finance Department, Nasarawa State University, Prof. Uche Uwaleke has described as wise the decision by the present administration to scale down on the size of the 2019 budget because of the current fiscal realities in the country.
Recall, the Federal Government has proposed a cut to the 2019 budget from N9.12trillion in 2018 to N8.65 trillion. It also projected a total revenue of N7.9 trillion as well as reductions in both borrowing and deficit financing.
In affirmation, Prof. Uwaleke said, the 2017 budget implementation experience coupled with the revenue challenges being encountered in the execution of the 2018 budget calls for a conservative approach to next year’s budget.
The Finance expert said, “the 2017 budget implementation report recently released by the Budget office speaks of adverse variances in key budget targets due mainly to shortfalls in actual revenue receipts resulting in huge fiscal deficit.
“The same scenario is playing out with regard to the 2018 budget in respect of which the federal government has just sought the approval of the National Assembly for about N2.8 billion to finance the budget.
“Therefore, it goes without saying that the decision to slow down government’s expansionary spending especially in an electioneering year will pose less threat to inflation, reduce the fiscal deficit to GDP ratio in line with the ERGP target as well as curtail government borrowing in view of the present huge debt service burden which is clearly unsustainable at over 65% of revenue,” he said.
The University Don however, noted that “the only worrying aspect of the proposed 2019 fiscal framework is the significant reduction in capital expenditure.
“Much as the increase in recurrent spending ostensibly to accommodate the implementation of the minimum wage is justified, the Efficiency unit of the Federal Ministry of Finance should intensify efforts at reducing MDAs overheads and avoidable wastages.
“Any funds freed in the process in addition to proceeds from the implementation of the newly introduced Voluntary Offshore Assets Disclosure Scheme as well as other miscellaneous income such as proceeds from loot recoveries should be used to augment the meagre allocation to capital expenditure,” he said.