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Politics Updated: May 23, 2024

Tinubu inherited shrinking economy - Budget minister, Bagudu claims

By TIMOTHY TIMILEHIN ENIETAN-MATTHEWS
May 23, 2024
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The Minister of Budget and Economic Planning, Abubakar Bagudu, on Wednesday, said the administration of President Bola Tinubu inherited a low revenue and shrinking economy but was determined to address these challenges through the Renewed Hope Agenda.

This agenda, according to Bagudu, formed from extensive reflection and input from various stakeholders, focused on eight priority areas crucial for Nigeria’s progress.

He emphasised the need for difficult decisions, noting that countries Nigeria aspires to emulate made these choices long ago.

He also argued that the Renewed Hope Agenda involves confronting economic realities, which may cause temporary discomfort but are essential for long-term stability and growth.

“We must restore a macroeconomic environment that can stimulate investment, generate revenue, and address under-investment in sectors like security, education, and social welfare,” Bagudu explained.

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He also highlighted that Nigeria’s current crude oil production is below its Organisation of Petroleum Exporting Countries, OPEC, quota due to under-investment in infrastructure and security.

“So we impact, as part of the Renewed Hope Agenda, on a macro-economic reform because that was what was responsible for low investment, low revenues and our economy’s size was shrinking, was too small compared to our needs.

“Nothing we do can solve the problem of under-investment in various sectors of the economy; be it security, be it education, be it social welfare, without restoring a macro-economic environment that can stimulate investment in our economy, which will generate revenues for us to fix security.

“That is why we are not even producing crude oil in the quantity we used to before, or as allowed by international convention, which is our OPEC quota, because of under-investment, whether in the physical infrastructure itself or security, and so on and so forth", Bagudu added.

He further stated the administration was focusing on food security by investing in irrigation and water management to enable year-round farming, noting that similar efforts were being made to revitalise the livestock sector, which has been a source of conflict rather than economic growth due to historical under-investment.

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Enhancements in infrastructure, education, health, the creative economy, the digital economy, and the steel sector are also prioritized, he added.

While noting that some of the government policies might involve some discomfort and pain, Bagudu argued that true leadership involves first and foremost telling the people the truth of their reality.

“Food security, despite our potential, we are under-investing. Most of our farmers are one-season-per-year farmers. So, when you have an asset that you only utilize four months in a year because you don’t have irrigation, you don’t have water bodies.

“Most of our fishing communities, they go to freshwater bodies where there’s no fish anymore, we have to transit them. The livestock sector, which in countries like New Zealand, is an important engine of growth, but in our country, due to cumulative under-investments, it has formed a basis for conflict rather than economic opportunity,’’ he lamented.

Bagudu, a former Kebbi State governor asserted that the President was committed to fiscal discipline, aiming to reduce the fiscal deficit from 6.11 per cent in 2023 to below 4 per cent in 2024.

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He also revealed that the administration planned to increase capital expenditure to 39 per cent, the highest in Nigeria’s history, stressing that the innovative N100bn consumer credit fund and mortgage fund aimed to stimulate manufacturing and housing sectors, respectively.

Speaking further, the Minister disclosed that significant budget allocations had been made to national security, leading to improvements in Borno, Imo, Kaduna, and Taraba.

Tinubu, he said, supports local government autonomy, ensuring resources are effectively used to benefit communities.

He detailed three significant budgets under Tinubu’s administration. He said the first, an N819bn budget, was renegotiated to allocate N500bn for interventions supporting vulnerable populations.

According to him, the second N2.17tn budget was focused on national security, infrastructure, and cash transfers, adding that the 2024 budget aims to restore fiscal discipline and stimulate economic growth through increased capital expenditure.

“The three budgets Mr President participated in the first, the N819b budget which he inherited, which was even passed into law before he came, he renegotiated with the National Assembly.

“He said ‘I want N500bn to fund intervention that will support the vulnerable populations, who might be affected by the reform measures.’ About N200bn went into agriculture; N75bn into the medium and small enterprise sector, as well as N40bn into the nano-credit sector.

“Equally, another budget of N2.17tn that went to support gains in national security, most of it to security and infrastructure and also providing more money for cash transfer and meeting commitments to labour.’’

The minister pointed out that the President was clear that he would not blame his predecessor for the state of the nation.

Reeling out the benefits of the programmes and policies instituted by the government, Bagudu said: “So, we believe that with consumer credit mobilizing the manufacturing sector; with mortgages re-energizing the houses sector; with Agriculture Development Fund mobilizing the agricultural sector, our youth and our productive economy will be mobilised.’’

The minister said the N130bn provided for the transition to CNG (compressed natural gas) would restore energy competitiveness and benefit the manufacturing and transport sectors of the economy while the cheaper energy would support economic reforms.

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