The Federal Government warned that Nigeria may suffer for subscribing to the African Continental Free Trade Area if the right policies are not put in place to benefit the country.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, issued the warning on her presentation to the National Assembly to defend the 2020 budget, a copy of which our correspondent obtained on Friday.
President Muhammadu Buhari had on July 7, 2019, signed the African Continental Free Trade Area Agreement, making Nigeria the 53rd county in Africa to sign the AfCFTA.
The minister, however, issued a warning on the agreement, as part of the economic and fiscal outlook for 2020, saying that it could become a nightmare for the country.
She said, “With Nigeria joining other African countries to sign the agreement establishing the African Continental Free Trade Area, there could be tremendous opportunities for Nigeria in the medium term. However, the AfCFTA could also create a nightmare situation for the country unless the right policies and actions are implemented expeditiously to improve Nigeria’s economic competitiveness.”
Explaining the strategic revenue growth initiatives by the Federal Government, the minister said, “Nigeria must mobilise significant domestic resources to be able to make the necessary investments in human capital development and critical infrastructure.”
She also said, “Given the low revenue to Gross Domestic Products ratio, currently at about 8 per cent, we must optimise revenue generation opportunities.
“I would like to seize this opportunity to call on Nigerians/general public to support this administration in solving Nigeria’s revenue generation problem. Indeed, some reforms will be tough, but it must be done if we will look at the facts and be frank to ourselves.
“However, we will engage the public in whatever we do, including any changes in taxes with regards to rates or administration methods. We will have town hall meetings, stakeholders’ fora, etc., to discuss matters that will affect citizens.”
Meanwhile, of the N4.88tn recurrent (non-debt) expenditure by the Federal Government in 2020, representing 24 per cent of the total budget, Ministries of Defence (N778.59bn), Education (N490bn), Police Affairs (N359.83bn), Health N336.32bn), and Interior (N219.46bn) are the top five to spend on overhead and personnel costs.
Other biggest spenders on salaries are Ministry of Youth and Sports Development (N168.33bn), Office of the National Security Adviser (N114.91bn), Ministry of Petroleum Resources (N75.60bn), Ministry of Foreign Affairs (N67.56bn), Office of the Secretary to the Government of the Federation (N59.60bn), Ministry of Agriculture and Rural Development (N58.67bn) and Ministry of Science and Technology (N49.80bn).
The minister admitted that the recurrent expenditure is “reflecting increases in salaries and pensions, including provisions for implementation of the new minimum wage.”
In another part of the document, she said, “These (recurrent) allocations underscore our commitment to increasing investment in national security and human development.”
In a related development, the Minister of Industry, Trade and Investment, Niyi Adebayo, has said his ministry received a total capital budget ceiling of N41,399,267,522 from the Ministry of Finance, Budget and National Planning, for both the headquarters and the parastatals.
The minister said from the ceiling, the ministry’s headquarters had N8,998,010,031 while the balance of N32,411,257,491 was shared among the 20 agencies and institutions as capital projects.
The breakdown of the allocations to the agencies and institutions, as contained in a document presented by Adebayo to the National Assembly, showed that the National Automotive Design and Development Council recorded zero.
On the ministry’s overview of the 2020 budget, Adebayo said, “Principal expenditures in the 2020 budget proposals will be directed towards the ministry’s 61 ongoing and seven new projects.