After the euphoria of a controversial victory at the last presidential election and the hasty removal of the subsidy on oil that has triggered a quantum leap in mass suffering of Nigerians, the reality of macro-economic picture has finally dawned on the administration.
The economy is virtually bleeding, and the new wage award granted to federal workers by President Bola Tinubu in his October 1 broadcast, will rise 2023 budget deficit to over N10 trillion. Some commentators have said the Tinubus administration action has so far not matched his word of probity, austerity in management of the economy and the cutting down the cost of governance.
The icing on the cake is the concession the federal government has given to all categories of civil servants a wage top-up of N35, 000 per month.
Going by this, at least, all federal civil servants under the Consolidated Public Service Salary Structure, which were estimated at 144,766 as at April, will benefit from the provisional salary increase in the next six months.
In view of this concession, the Tinubu administration has pushed budget deficit to N10 trillion, and would have to be coughing out at least, N5.07 billion monthly to fund the add-on, which some experts said has laid the ground for a long-lasting wage floor in the coming months, and ultimately increased the burden of salary payment on the current administration.
This development comes as Nigerias economy currently operates at a deficit of over N10 trillion as a result of the lower income generation with debt servicing and recurrent expenditures taking a huge chunk of the annual budget.
As part of the grand plan, the Ministry of Finance and the Budget Office (an agency under the ministry) are said to have started working on new austerity measures that would drastically cut recurrent expenditures and rein in official waste in the operations of Ministries, Departments and Agencies (MDAs).
Ministries, according to sources, have been given a matching order to streamline their operations and put an end to bills that would not add value to governance going forward.
Some MDAs, which are hitherto considered cost centres, are said to have been told to develop initiative to retool their operations as to be commercially viable, given slow revenue growth, huge public debt liabilities and expanded personnel cost.
Minister of Finance and Coordinating Minister of the Economy, Wal? Edu, had a challenging task ahead on coming up with a realistic plan for bridging the gaping hole between revenue and expenditure so as to put an end to era of huge fiscal deficits.
Under former president Buhari, the fiscal deficit jumped from N880 billion in 2015 to N9.3 trillion last year, which was about N2 trillion over the projected amount. Buharis eight-year administration relied almost 100 per cent on borrowing to plug the budget gap. Where conventional loans were not forthcoming, the government resorted to the Central Bank of Nigerias (CBN) overdraft for support.
The new CBN Governor, Dr. Olayemi Cardoso, has vowed to defend and protect. He also made a strong statement, at his Senate screening, to deal with reckless deficit financing with utmost dispatch. Cardoso pledged to end the era of reckless budget support and play by the rules of CBN Act.
