An economist, Dr Aminu Usman, has commended President Muhammadu Buhari for the early presentation of the 2020 budget estimate of N10. 33 trn to the National Assembly.
The don made the commendation in a telephone interview with newsmen.
Usman, the Head, Department of Economics, Kaduna State University, said that the early submission of the budget to the National Assembly would provide the legislature ample time to work on the document.
President Buhari, while presenting the budget, predicated its realisation on oil price benchmark of 57 dollars and 2.18 million barrels per day.
The president also said that it would be predicated on a foreign exchange rate of N305 per dollar.
He further proposed increase of VAT from 5 per cent to 7.5 per cent, adding that increased revenue would be used to fund education, health and infrastructure.
According to the president, Gross Domestic Product has grown from 1.93 per cent in 2018 to 2.02 per cent in the first half of 2019, with inflation down from 18 per cent in January 2017 to 11 per cent in August 2019.
Buhari said that the 2018 capital budget was implemented till June 2019, with N294.6 bn released for capital projects
Usman said: “I commend the president for presenting the budget early. This is something that has not happened in our country before.
“Submitting it in October means the National Assembly might not finish working on it by December; but I see the budget coming on stream by early next year.
“Which means implementation will start earlier than what had been the usual practice,’’ Usman said.
The lecturer, however, expressed concern on the revenue profile of the budget.
“Basing the budget on new VAT rate increase from 5 per cent to 7.5 per cent creates a lacuna because the law has to be amended.
“And you know the process of amending laws in this country, it might take some time,’’ Usman stated.
While condemning previous budgets that relied on borrowing, Usman noted that it had become common knowledge that borrowing to fund budgets was not always the wisest of decision because of its unsustainability.
“If we go by the history of our budgets in this country, we are just shown figures that are not implementable or that substantially depend on oil.
“For us to expand the economy we need to do deficit budget, but I think the amount of deficit is becoming unhealthy and unsustainable.
“Government needs to look at the figures and try to cut a lot of wastages in government contracts and running of the government,’’ Usman said.