Dr. Obadiah Mailafia, former Deputy Governor of Central Bank of Nigeria, CBN, disclosed, yesterday, that about 20 percent of the nation’s currencies in circulation were fake.
Also, a coalition of civil society organisations under the aegis of Citizen Wealth Platform, CWP, alleged insertion of a frivolous, inappropriate, unclear and wasteful expenditure proposals in 2017 budget.
According to the group, a large sum of N151.536 billion wasteful, duplicated and needless proposals has been identified in the budget which the National Assembly should save by striking out such proposals, some of which it said were contained in 2016 budget.
The revelations came as Senate President, Dr Bukola Saraki and Speaker of the House of Representatives, Mr Yakubu Dogara, insisted that the National Assembly was constitutionally bound to effect changes in budget estimate brought to it by the executive.
All spoke, yesterday, in Abuja at the opening session of a three-day public hearing on 2017 budget appropriation process in the National Assembly on the topic: “Public Finance in the Context of Economic Recession: Innovative Options.”
The former CBN deputy governor also alleged that investors’ knowledge of huge economic potentials injected in the country accounted for the recent over-subscription of $1 billion Eurobond initiated by the Federal Government.
He regretted that the government was not aware of the massive fake currency in circulation in the country, which he said was highly detrimental to the growth of the economy.
When fake currencies of that magnitude circulate, according to him, original currencies become scarce, adding that “bad money chase away good money.”
He described recession as a situation where the gross domestic product (GDP) output of a country had fallen in more than two quarters. He also described depression as a situation where GDP growth had fallen for more than five, six, seven years.
Mailafia likened the country’s economic problem to a myriad of factors such as global fall in the prices of crude oil, dwindling foreign reserve, weakened naira, negative growth and existing gap in public policies.
He enumerated other areas to include poor banking practices, stock market crisis, speculations, regulatory failure, corruption and fraud as well as weak macro-economic management.
The former deputy governor warned the Federal Government and financial regulators against toying with high interest rate, pointing out that it will only aggravate the nation’s economic woes.
He also warned against contemplating increasing tax, suggesting that the Federal Government should rather drive for more income tax by getting more people to pay taxes instead of increasing it as he reiterated that doing so will further impede economic growth and investment.
In her presentation, Minister of State for Budget and National Planning, Mrs. Zainab Ahmed, said the 2016 budget failed to achieve its target because of the following factors: the fall of GDP growth to 1.55 per cent as against 4.39 per cent target; the fall of production volume from targeted 2.2 million barrels per day to 1.81 million; galloping inflation of 17.8 per cent from projected 9.8 per cent; protracted depreciation in exchange rate from projected N197 to $1 to N305/$ while revenue target of 3.8 per cent only cruised at 2.117 per cent.
However, Minister of Budget and National Planning,Udoma Udo Udoma, who later arrived the venue of the event, said in line with the submission of Mailafia, the government had no plan to increase tax and VAT rates but was rather seeking to broaden tax collection base.
Speaking on the occasion, Speaker, House of Representatives, Yakubu Dogara, explained that ”no legislature worth its salt, such as ours, will ever abdicate this onerous constitutional responsibility no matter the degree of intimidation and blackmail the legislature is subjected to by persons who want to cow the legislature and brazenly put our democracy in a recession.
“The legislature, which is the most immediate representative of our people, must and will always exercise its powers for the general good.
“For us in the House of Representatives, in particular, today’s event represents a fulfillment of one of the major goals we set for ourselves in our legislative agenda adopted at the beginning of the 8th Assembly wherein we committed as follows:
“The House shall examine the efficacy of conducting public hearings on the Budget before legislative approval as this exposes the National Budget to increased citizen and stakeholder participation.”
While declaring the event open, Senate President, Dr Bukola Saraki, pledged the commitment of the legislature to economic recovery and growth.
“To this end, we will ensure that proposed projects and programmes, and their estimated expenditure are in sync with government priorities.Beyond that, we will also ensure that in line with the amended Procurement Act, a sizable part of the capital expenditure is retained within the country as government patronises made-in-Nigeria products,” Saraki said.
