Economist decries huge allocation to debts servicing in 2016 budget
An economist, Prof. Sheriffadeen Tella of the Department of Economics, Olabisi Onabanjo University, Ago-Iwoye, has expressed concern over the N1.48 trillion approved for debts servicing in the 2016 budget.
Tella told the News Agency of Nigeria (NAN) in Lagos on Friday that the amount was huge considering the situation of the nation’s economy.
Tella said that spending such an amount on debts servicing was not desirable.
“We should have used our circumstances to request for moratorium on debts servicing, and then use that money to pay principal thereby reduce the debt itself,’’ he said.
The economist said that the budget was still on the high side given the weakness of the economy, noting that it was passed earlier than the previous ones .
Tella said that the previous budgets were not passed earlier when compared with the 2016 budget.
According to him, the amount given to education and health were not enough to adequately care for the sectors.
NAN reports that N221.7 billion was earmarked for the health sector and N369.6 billion was set aside for education.
The Senate and the House of Representatives had on March 23 passed the 2016 budget of N6.06 trillion.
The figure showed a reduction of about N17 billion from the adjusted figure of N6.08 trillion, which President Muhammadu Buhari presented to the National Assembly.
The National Assembly retained 38 dollars as the benchmark oil price for the budget in spite of the instability in the price of crude oil.
NAN reports that crude oil production for the nation was pegged at 2.2 million barrels per day and the exchange rate of N197 per a dollar.
Both chambers approved N1.59 trillion as the capital expenditure and N2.65 trillion for recurrent expenditure in the budget.
They also approved N351.37 billion for statutory transfers, N1.48 trillion for debt servicing, and N2.2 trillion for fiscal deficit.