As the President Buhari unveils raft of fiscal measures to compliment CBN’s earlier monetary intervention in managing the spread and containment of Coronavirus, a call has been made for a moratorium on N2.45 trillion debt servicing contained in the 2020 budget to enhance the Stimulus plan in mitigating the negative impact of the COVID: 19 on the economy.
Reacting to the maiden Address of President Muhammadu Buhari COVID- 19 pandemic in a statement in Kaduna, Comrade Issa Aremu, former LP Governorship Candidate Candidate observed that the sharp crude oil price drop to $25 from the projected $57, meant N2.45 trillion allocated to debt servicing in 2020 budget was “unrealistic and unattainable”.
Comrade Aremu hailed the President’s address for what he called “all inclusive frontal measures ” against the dread Virus. He however noted that it was time for what he called “strategic not uncritical cut” in public spending, adding that the proposed reduction in the size of the 2020 budget by about N1.5 trillion, announced by Finance Minister as part of the measures to address the impacts of Corona virus disease on the Nigerian economy would undermine economic recovery and employment creation. Instead he suggested moratorium and deferred payment of interests on the country’s domestic debts to free resources for critical recurrent and capital expenditure in the wake of national lock down.
Debt service gulps N2.45 trillion in 2020 budget. President Muhammadu Buhari signed the N10.59 trillion 2020 budget in December 2019, 18.8% higher than that of 2019, mostly expanded to service debt. Budgeted N2.45 trillion to service debt in 2020 is slightly below N2.78 trillion budgeted for the total capital expenditure.
Comrade Aremu who is also a Member of National Institute, Kuru Jos, said President Buhari was right to say in the “ fight against COVID-19, there is no such thing as an overreaction or an under reaction. It is all about the right reaction by the right agencies and trained experts”. He observed that the President hit the nail on the head to declare the pandemic a matter of “life and death” that require drastic solutions.
The former General Secretary of Textile Union said it was time to review downward N125 billion statutory allocation scandalously allocated to the National Assembly of some 500 senators and legislators. “Indeed the budget per capital of the National Assembly at N266,524,520.30per legislator dwarfs the national budget per capital of about N57,388.88. In fact, the total allocation to the National Assembly almost equals the total sums of N44.5 billion for the Basic Health Care Provision Fund (BHCPF) and N111.79 billion for the Universal Basic Education Commission (UBEC) expected to impact on millions of citizens.” “Nigeria” he said “needs pandemic- sensitive budget!”
He welcomed the two steps approach of protection of lives as well as sustainable economic livelihoods of the citizens adding that the Federal intervention of fifteen billion Naira (N15b) to support the national response was timely.
Comrade Aremu however suggested that the Presidential Task Force (PTF) to develop a workable National Response Strategy must be made inclusive of organized labour, businesses, women and the youths for effective impacts in service delivery.
He hailed the Governors Forum led by Ekiti Governor Kayode Fayemi for the independent complimentary measures the state’s governors have taken to curtain the Virus menace. While commending what he called the inspired private and corporate individuals for their generous donations to the curtain the Virus, comrade Aremu observed that once the pandemic is over, Nigeria should sustain what he called “the current robust bipartisan collaboration” to manage the existing daunting health challenges of Malaria and Lassa fever, even though had cures but had nonetheless killed more than a Corona Virus.
“Nigeria needs a radical departure from the age long unhelpful neoliberal economics of wholesale liberalization, cuts in public spending, factory closures and export orientation. It’s time for urgent diversification, import substitution, re-Industrialization and beneficiation. This is the time to re- inflate the economy as commendably being done by the CBN and not a panicky contraction and deceleration. At $30 dollars per barrels, Nigeria is far from being broke. On the contrary it’s time to move from export of crude to refining, save scarce foreign exchange and create sustainable Decent jobs” he said.
