2021 Budget: Expand Revenue Sources To Reduce N4.49trn Deficit, Economist Tells FG

The Federal Government needs to place the 2021 budget deficit at a manageable level and expand revenue streams to ensure adequate performance, a Developmental Economist, Emeka Okengwu, said on Monday.

The Federal Government’s 2021 budget is made up N13.08trn with a deficit amounting to N4.49trn, while revenue was estimated at N7.89trn

“What should worry you more is not the expenditure. What should get your interest should be your revenues,” Okengwu said on AriseTV Business Nigeria.

Nigeria in the 2021 fiscal year is expected to have a weak recovery from a second recession in four years.

“What should worry us as a country is how are we able, first and foremost to make certain that we keep the deficits at a manageable level, and then have the income streams to be able to now fund the remnants of the budget,” he said.

On the record N110bn allocated for health, he said what is most important is the ability of the government to raise the much needed revenue to finance the expenditure.

“Our major focus should not be how much we are giving to health but it is how much we can be able to generate for health,” he added.

On the huge borrowing by the government, he said what the money was borrowed for should be of concern to Nigerians.

The Debt Management Office puts Nigeria’s domestic and foreign debt at N31.01trn as of June this year.

He said, “This calls to question our borrowing capacity and our credibility, they are critical issues in the new budget proposal.

“Debt should not worry you, what should worry you is what you are doing with the debt.”

Just recently, Fitch Rating, a Washington based credit rating firm, reversed Nigeria’s outlook to stable from negative and affirmed the Issuer Default Rating at ‘B’.

The reversal improves the country’s credit worthiness, as Africa’s economic power house could increase borrowings and also attract foreign investors.