Director-General of the National Budget Office of the Federation, Ben Akabueze has said the 2020 budget has been designed to meet the national target of seven per cent Gross Domestic Product (GDP) growth.
Akabueze who spoke with journalists after the budget presentation in Abuja said the growth in the economy cannot be felt with the population rate growing at three per cent while the GDP growth record lower.
He pointed out that a number of parameters guided the expiring Economic Recovery Growth Plan (ERGP) whose timeline expires but goals remained to be met based on the targeted objectives.
“ERGP has a number of defined objectives, policies and measures and timelines in meeting those objectives. The timeline for meeting those objectives have not been met.
“For instance, we targeted to meet 7 per cent GDP growth by 2020 but we have just gotten there but 7 per cent remains the target to get the economy growing. If we keep growing our population at about 3 per cent and our GDP is still growing at under 3 per cent people will not feel the growth.
“That goal of a higher level economic growth that gets the ERGP remains, this budget is entitled budget of sustainable growth and job creation. The focus is still consistent with ERGP,” Akabueze stated.
He pointed out that the major fiscal challenge at delivering on the mandate of the government was largely due to low public revenues accruing to the government to be able to execute budget programmes and projects.
He said the budget, though a deficit budget, was an expansionary budget as it seeks to stimulate growth in the economy as people spend in businesses and can generate more profits, invest more and hire more people out of poverty put them in jobs.
According to Akabueze: “Personnel cost have become our single largest expenditure item by far and you have a lot of measures to make sure that under control so that it does not crowd out our capacity to invest in infrastructure jobs.
“This budget is design to sustain expenditure, that is why it still remains an expansionary budget. It is still a deficit budget that is how it stimulates growth in the economy as people spend in businesses and can generate more profits and can invest more and hire more people out of poverty and put them in jobs.
“At about six per cent to GDP, we have one of the lowest revenue to GDP ratios in the world and government has been very reluctant to raise taxes in other not to put higher burden on the people.
“That is why you see with respect to the VAT that we have inevitably have to increase from 5 per cent to 7.5 per cent. There has been great care to ensure the poor and vulnerable so not suffer.
“Even the exemption list, basic items that most people consume, exemption list has been expanded and a new introduction which is establishing it a threshold of businesses on whom the VAT would apply, so the small businesses will be exempted.
“That did not exist in the current VAT. Under the current VAT, even the man by the roadside was suppose to be charged VAT.
“Of course it is one thing to generate the revenue and another to manage expenditures effectively. You would have also heard in the President’s speech, certain measures he is taking and directed certain measures to be taken to manage our expenditures more effectively,” he said.
Commenting on the budget, Senator representing Benue South, Abba Moro said the budget focus on completing projects that are being rolled over signalled some good for the nation.
Moro said the plan to also make the fiscal year revert to January to December was a good development that should make for timely releases to prosecute projects of critical infrastructural need to the nation.Read Full Story