Feb 5, 2024
Mr. Bayo Onanuga, the Special Adviser to the President on Information and Strategy, has said that the 2023 national budget allocated a significant 97% of revenue to debt servicing, leaving minimal funds for capital projects, thus reducing potential growth and job opportunities.
Onanuga, who was responding to the criticism of the former vice president of Nigeria, Atiku Abubakar, on the economy noted that President Bola Tinubu is on the right track, describing Atiku’s claim as non-factual.
Atiku had earlier berated the economic policies of President Tinubu, saying it further deepened the hardship of the citizens.
According to the former vice president, multinational companies are leaving the country in droves as Nigerians continue to battle with an escalating high cost of living.
Reacting to Atiku’s statement, Onanuga noted that the President is on the right trajectory, adding that the economic reforms are “clearly positive, realistic and sustainable.”
According to him, the country has been plagued by persistent fiscal deficits, a modest revenue base, significant external and domestic debts, and a formidable burden of debt servicing that has spanned decades.
- “The economy was plagued by decades of significant fiscal deficits, a low revenue base, high external and domestic debts, and huge debt service burden.
- “The national budget Tinubu met in 2023 showed that 97% of revenue was to be spent on debt servicing, with little reserved for capital, thereby foreclosing growth and jobs.
- “Confronted with this grim economic reality, President Tinubu faced a difficult choice of balancing the political and economic costs of reforms against the risks of economic recession. His government chose the former, to keep the economy afloat and set it back on the path of growth and prosperity.”
What you should know
- President Bola Tinubu removed the subsidy on fuel as well as floated the Naira against the Dollar in the foreign exchange market as part of his reforms to revamp the economy.
- Meanwhile, the reforms have resulted in mounting inflationary pressure and escalating the high cost of living in the country, with an inflation rate of 28.92% as of December 2023.
- In addition, the Naira has depreciated by over 100% since the implementation of the floating policy, adding to the pressure of economic woes in the country.
- While the government claimed they are working to address these economic challenges, one of the opposition leaders, Atiku Abubakar, believes the current administration has no clue on how to fix them.
