Economic expert Johnson Chukwu has stated that the federal government’s (FG) project to rake in N10.74 trillion as revenue by December 2022, is not attainable.
According to him, the projection is unrealistic as well because, amongst other challenges, the investors who could contribute to the economy are only interested in a large and skilled labour market, which he said the country cannot boast of.
Speaking at the bi-monthly forum of the Finance Correspondents Association of Nigeria (FICAN), which held in Lagos, Chukwu, who’s the Group Managing Director, Cowry Asset Management Limited, also explained that it is impossible to get such revenue because investors would rather consider relatively free labour of less union and government control.
Noting that the revenue projection would only give room for a wider budget deficit, Chukwu stated that “as at November 2021, the minister of finance said federal government revenue was N5.5 trillion and that was 11 months. If you consider that on monthly basis, it means we generate N500 billion every month. If you use that at the end of 2021, the federal government generated N6 trillion as revenue.
“The budgeted expenditure last year was N14trillion. What that means is that we have an effective budget deficit of N8trillion last year. This year, we have budgeted to generate over N10 trillion and we have budgeted expenditure of N17.1 trillion and budgeted N6.99 trillion as a deficit.”
Continuing, he added: “The government said we going to add about N2.55trillion to sustain the payment of subsidy in 2022 alone.
“If you added that N2.55trillion to N17.1 trillion we are going to have N19.6trillion but the government said they will generate N10trillion. If they achieve their budgeted revenue expectation, we are going to have N9.6 trillion deficit. Nothing has changed in the economy structurally as to enable us to generate from N6trillion to N10trillion.
“If we give it a benefit of doubt and increased government revenue to N7 trillion and you spent N19.7 trillion. Go and note that Johnson Chukwu said that we are going to end 2022 with a N12.6 trillion deficit.
“So, what follows next is that we will have to borrow. The Monetary Policy Rate is 11.5% and so they are giving 13.5% to Central Bank of Nigeria (CBN) to be borrowing.”
