Esele urges FG to borrow for capital projects, not consumption

Mr Peter Esele, former President, Trade Union Congress (TUC) has requested the Federal Government to borrow for capital project, rather than for consumption.

Esele, also a public affairs commentator, made the request on Wednesday, in an interview with our correspondent in Benin.

He was speaking on the backdrop of the 2022 budget proposal recently presented by President Mohammadu Buhari to the National Assembly (NASS).

He noted that from the proposed budget, it was evident that the country was borrowing for consumption rather than for capital projects.

This, he said, was evident in the comparison between the proposed allocations for recurrent and capital expenditure.

He noted that the recurrent expenditure in the proposed budget was almost half of the entire budget.

According to him, this was not a recipe for sustainable development, because with recurrent expenditure taking larger chunk of the total budget it showed that the country was borrowing to fund its consumption.

President Buhari had on Oct. 7, presented a proposed budget of N16.39 trillion before the National Assembly for the 2022, fiscal year.

A breakdown of the budget had shown that N6.83 trillion would be spent on recurrent expenditure while N5.35 trillion would be spent on capital expenditure.

Esele, therefore, said if the country was serious about development, there was need for a reduction in the recurrent expenditure.

He noted that in other parts of the world recurrent expenditures were not more than 20 per cent of budgets.

“So, if you are spending so much on recurrent like it’s evident in the 2022 proposal, then what do you have left for development?”

“Looking at the budget for capital expenditure, it is as if we are treading on water.”

“I am not saying that there will be no progress, but where the world is making five steps forward, we will be making just a step, which means we would not be making progress as we should.”

The former TUC president also noted that the debt servicing by the country was equally high.

He, therefore, advised for a pro-active action by the government in managing the nation’s debt.

He, however, lauded President Buhari for prioritisiing Security and Education in 2022 budget proposal, noting that three fundamental sectors, which include education, security and health drove a country.

He stressed that those three sectors were foundational, because if they were well laid out, it would become easier for investors to bring their investment to the country’s economy.

“After prioritising these three, infrastructure is expected to be next, because ordinarily, a robust, healthy and educated society would guarantee everything and it’s a panacea for growth.”

“Adequate security gives room for investors to invest in your country and aid development, but without security, there will be no investment, and then poverty thrives.”

“Talking about eradicating poverty, when allocation for Social Development/poverty eradication is higher than allocation for health it means you are dealing with the symptom and not the cause.”

“So, it would be appropriate to deal with the cause of a problem rather than treating the symptom,” he said.

Esele said that with huge budgetary allocation for Social Development/poverty eradication, the citizens should know those who had benefitted from it.

He, therefore, advised that there was need for accurate records and data to be made available for Nigerians and to also know the Key Performance Indicators (KPI), in order to know its benefits to the economy.

The former TUC president also faulted the huge allocation to the national assembly.

According to him allocating N134 billion to the NASS is way too much, because it amount to spending a whooping 0.82 per cent of our total budget on just 456 persons.

“This means it’s costing the country more than N200 million to maintain each NASS member.”

“Let’s ask ourselves what are they spending such amount of money for and on?”

“That is why they have not been able to earn the respect of Nigerians, because each time they act as if they are above the law and appropriate whatever they like to themselves.”

“Nigerians should begin to ask questions,” he said.

He further noted that the country’s budgetary system was opaque as some of the things budgeted for in 2020 were budgeted for again in 2021, and were still included in the proposed budget.