Budget: LCCI warns FG over rising recurrent expenditure


The Lagos Chamber of Commerce and Industry has asked the Federal Government to watch the rising recurrent expenditure and explore options that will help stem the tide.

The President, LCCI, Dr Michael Olawale-Cole, said this in Lagos in his opening address during a budget analysis session held to critically evaluate the pros and cons of the recently passed 2022 budget.

He said, “Looking at the 2022 aggregate FGN expenditure of N17.13tn, recurrent (non-debt) spending is estimated at N6.91tn, which is 40 per cent of total expenditure, and 20 per cent higher than the 2021 budget.

“The government needs to watch the rising recurrent (especially personnel) expenditure. It is more sustainable to empower the private sector to create jobs while the government creates a thriving business environment.”

Olawale-Cole also advised the Federal Government to re-assess its debt sources to borrow at lower rates or access more zero-interest loans.

He said, “The capital expenditure of N5.96tn is 35 per cent of total expenditure while the debt service provision of N3.61tn is 21 per cent of total expenditure, and 34 per cent of total revenues. This leaves us with a deficit of N6.39tn, representing 3.46 per cent of our GDP.

“With the deficit financing to come from borrowing, the chamber wishes to reiterate our concerns about debt costs. We need to re-assess our debt sources to borrow at lower rates or access more zero-interest loans like the Sukuk.”

A renowned economist, Mr Bismarck Rewane, who was the keynote speaker at the event, cited income inequality across the country as an economic gaffe that had to be fixed within the context of Nigeria’s holistic fiscal responsibility.

He said, “When you take the GDP per capita in this country, it shows you a very interesting but disturbing picture. The average income per capita in Nigeria by the end of 2022 will be about $22,100. Great. But that’s the beginning of the story. In Abuja, which has the highest income per capita, it is $10,250 per head. In Lagos it comes down to about $8,200 per head; but in Maiduguri, it is $700 per head, and in Sokoto, it is about $900 per head.

“In Ibadan, it is about $2,400 per head. So you have income inequality in a manner that creates problems. So, not only will you have to grow your income, you have to reduce your income inequality.” (Punch)

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