The House of Representatives, yesterday, faulted the efforts of the Finance Minister and the Coordinating Minister of the Economy, Dr (Mrs) Ngozi Okonjo-Iweala, to present the state of the economy in bright light.
According to the parliament, the economy cannot be bright when government has earmarked N572 billion to service N7.1 trillion domestic debt in the 2014 Budget.
The House was responding to the minister’s office’s claim of last Thursday when it explained that the Federal Government had been instrumental to a reduction in domestic borrowing while speaking on the “uncontrollable rise in government recurrent expenditure in the budget.”
Tasking Okonjo-Iweala, the House said no one was excited about “the celebrated insignificant decline in domestic borrowing.”
It added: “The questions the people are asking are, ‘borrowing at what cost? What is the cost of the so-called reduced domestic borrowing? How is it serviced? How are the decisions taken?”
The House of Representatives spoke in a statement by the Clerk of its Committee on Finance, Mr Farouk Mustapha.
The statement hinted that the minister would face the House at a public hearing scheduled for March 3 to 6.
“For us, we have carefully refrained from responding to the Minister’s assertions and claims over the past couple of weeks in view of the fact that a public hearing at which the actual state of our economy will be known has already been scheduled for March 3-6, 2014,” the statement started.
It continued: “Nonetheless, we are compelled to say, as we have often stated, that no one is excited about the celebrated insignificant decline in domestic borrowing.”
” The questions the people are asking are, ‘borrowing at what cost? What is the cost of the so-called reduced domestic borrowing? How is it serviced? How are the decisions taken?’
” Beyond that, since the minister is in the habit of comparing our situation with those of other countries, why would she not tell Nigerians that the cost of our domestic borrowing remains one of the highest in the whole world?
“In 2011,our domestic debt stock was N5.6trillion. It rose to N6.5trn in 2012, and, by 2013, it climbed higher to N7.1trn.
” Domestic borrowing for 2011 stood at N852billion, N744bn in 2012 and N588bn in 2013. For 2014, it is put at N572bn.
” The cost of servicing the debt was N495bn in 2011. In 2012, it increased to N559bn and jumped to N591bn in 2013.
In 2014, a whopping N712bn has been earmarked for debt servicing.
“On the issue of rising recurrent expenditure, the minister should tell Nigerians her accomplishments in the drive to lower it instead of repeatedly passing the buck.”
” It does not help to keep laying the blame at the doorsteps of previous administrations or attempt to drag late President Umaru Yar ‘Adua and President Goodluck Jonathan into the problem.
“The minister said cuts have been made in the recurrent expenditure but in what areas and by how much? Are the cuts made anything to be proud of?”
The Thursday statement by the media aide of the Minister of Finance and the Coordinating Minister of the Economy, Mr Paul Nwabuikwu, had said his principal was not responsible for the rising recurment expenditure of the Federal Government. The statement said: “Though government is continuous and the minister has no desire to shirk her responsibilities, the effort to personalize these issues on the basis of inaccurate information must be roundly refuted.”
It explained: “The first point made by some senators is that she is responsible for the rising recurrent expenditure which, according to them, rose ‘from 69 per cent in the 2013 Budget to 76 percent in the 2014 is inaccurate.’” He said the decline in the budget base is one of the factors responsible for the upsurge in the recurrent budget.
“The total expenditure of N4.64 trillion in the proposed 2014 is about a 7% decline from the 2013 budget level of N4.98tr. From a mathematical standpoint, this reduction in the budget base will result in a slight increase in the weight of the recurrent expenditure in the budget, which in absolute terms, has increased from 2013 levels”, the media aide said.
On the pensions factor, he said, “It is also important to note that the country is yet to fully absorb pension’s implications of the 2010 wage increases. Starting with the 2013 Budget, this administration commenced tackling the payment of outstanding military pensions, and the 2014 Budget will further address civilian pensions. We have been under pressure from many quarters, including senators, to integrate the civilian component of pension, and doing so will further increase the recurrent budget. Will the senators blame Okonjo-Iweala for this”?