By Titilope Fadare and Bakare Majeed
OrderPaperToday – The President of the Senate, Bukola Saraki, has cautioned the federal government on the continuous increase in deficit and retorting to borrowing to finance non- productive projects.
Saraki also stated that to have the desired outcome in terms of implementation of the budget, the executive should henceforth submit a Finance Bill along with the budget proposal.
The Senate President admitted that even though spending is crucial to get the economy, he however advised that borrowed funds must be targeted at productive projects.
Saraki raised all these observations and cautions in his speech at the joint session of the National Assembly on Tuesday during the budget presentation by President Muhammadu Buhari.
It would be recalled that the Medium Term Economic Framework (MTEF) sent to the National Assembly on October 17, shows an increment of about N3trillion deficit, which represents about N600billion increment from last year’s figure.
This makes the deficit to revenue ratio to stand at 52.22% although President Buhari stated that the government intends to only borrow N1.699trillion in 2018.
The Senate President in his speech also urged the federal government to focus on the diversification path as he assured the President of the commitment of the National Assembly on passing relevant laws on the economy.
He said: “We appreciate the need to spend, Mr. President. However, we must ensure that our borrowing is targeted at productive projects that will stimulate the economy. We must also ensure real value-for-money in these projects by making sure that they are not overpriced.
“We must reassess the relationship between oil and our economy. Oil prices are gradually inching up, but that is no reason for complacency in our diversification drive.
“We must grow our economy away from oil – as well as the need to increase non-oil revenue generation and collection.”
He added that efforts must be put into effective management of state resources and urged revenue collectors to improve on taxation, stressing that:
“Revenue from taxes as well as independent revenues from State Owned Enterprises must be taken seriously. If the budget is to be funded, we cannot afford to turn a blind eye to revenue under-performance.
“To ensure consistency in government’s economic programmes and tax policies, we will be requiring that the submission of the 2018 Budget – and budget submissions going forward – be accompanied by a Finance Bill.
“This bill – which should clearly detail the imposition, alteration or regulation of taxes such as the proposed tax on luxury items and excise taxes, among others – will put the financial proposals of government into effect.”