FG’s Budget Structure Can’t Guarantee Infrastructural Development, Says LCCI
The Federal Government’s budget structure is the biggest challenge facing infrastructure development in the country, the Lagos Chamber of Commerce and Industry has said.
The LCCI Director- General, Muda Yusuf, stated the position in an interview with THE WHISTLER.
Over the last three years covering 2019 to 2021, the Federal Government has spent only 25.6 per cent (N8.42trn) of the total N32.8 budget, on infrastructure.
The Federal Government’s 2021 budget of N13.08trn expenditure is made up of capital expenditure of N3.85trn, and non-debt recurrent spending of N5.65trn.
In the 2020 budget, the sum of N10.8trn was approved with N4.938trn allocated for recurrent (non-debt) expenditure, while the sum of N2.488trn was for capital expenditure.
The country’s fiscal spending for 2019 also favoured recurrent expenditures over capital projects, with N8.92trn budget size. Out of this amount, N2.09trn was for capital projects, while N4.07trn was set aside for recurrent expenditure.
The budget structure underscores the country’s spending priority which does not favour infrastructure.
The International Monetary Fund had said Nigeria’s infrastructure stock of 25 per cent of Gross Domestic Product remains far below the 70 per cent international benchmark.
Yusuf said, “The way forward is for the government to see what it can do with infrastructure. Unfortunately the financial capacity of the government has also been declining. So, it makes the prospects even much dimmer. So, the challenge is basically to fix our infrastructure.
“We need to restructure the budget to favour infrastructure more. When you look at the structure of the budget, it is not truly favourable for infrastructure.”
The LCCI boss said with the revenue challenges triggered by the Covid-19 pandemic, the Federal Government needs to encourage private investors to invest in the country’s infrastructure.
He said, “We also need to put incentives in place to also encourage private sector investments in infrastructure.
“We need incentives and policies that they can put in place that will encourage the private sector to play a bigger role in infrastructure. The government needs to sort out the issue of ports.”
He said the government needs to sort out the issue of ports congestion.
Given poor infrastructure, the LCCI Chief suggested that the government should increase incentives to attract investors and secure local businesses.