With the Debt servicing taking over two trillion Naira and the tax office falling short of their target by about 50%, the Federal Government may end up starting off the 2020 budget on a completely non -performing note, particularly as capital expenditures is put at 2.46 trillion Naira and investors are skeptical about the ability of the Budget to stimulate growth.
With the possibility of the funding dimming, government suddenly remembered that the Oil majors owe the country over sixty two billion dollars-about twenty one trillion Naira- from unremitted funds. This is from the agreement with the government that if the oil increases beyond $20 per barrel, they should bring out the excess for a pre-agreed sharing formula. The oil majors have not been doing that. In fact, many of the oil majors have gone to court to protest the payment.
“Nobody can bring out that kind of money,” Timipre Sylva, Minister of State for Petroleum, told reporters after a weekly cabinet meeting in Abuja. “I mean, we can’t get $62 billion. We can maybe get something from them but not $62 billion. It’s an opportunity we have lost.”
Besides this, the government is bent on taxing the poor while increasing the cost of governance. Recently, the presidency has announced cut in travel expenses for government officials- a drop in the pan for the huge amount needed for the running of the budget. It has increased the value added tax from 5% to 7.5%, and threatened the tax man-Babatunde Fowler- with sanctions if he did not meet the target. The banks has also been told to charge money for deposits and withdrawals by the Central Bank of Nigeria, apart from other numerous charges.
All these have not impressed the International Monetary Fund, IMF, which insists that Nigeria is being overtaxed.
Buhari has estimated that the Oil production will be pegged at 2.18 million barrels per day at that it will be sold at $57 per barrel.
Maybe the new economic team will work wonders. But critics believe their work is only to offer legitimacy to the government that has lost fate with Nigerians. Most of the members are rabid critics of the government. It is believed their appointment is meant to shore up confidence in the government, while at the same time being rubbished. Whether the critics are right can only be proved by time.
