Dr Aminu Usman, Dean, Faculty of Social Sciences, Kaduna State University, has advised the Federal Government to improve on revenue generation to fund the deficit in the 2021 budget.
Usman, in an interview with the News Agency of Nigeria (NAN) on Friday in Abuja, said the government should not borrow to fund budget deficit.
NAN reports that the 2021 budget of N13.5 trillion was passed by the National Assembly in December 2020, with a deficit of N5.6 trillion.
According to him, the officials of the relevant authorities should think out of the box and source the funds through wider tax collections and or through drastic reduction in the size of the budget.
“This can be achieved by reducing the cost implications of projects proposed for funding in the budget and cut down on wasteful expenses.
“There are certain headings that bear huge budgetary provisions year in year out without change even in the face of dwindling resources.
“They should instead of continuous borrowing cut those areas drastically to save running cost, and importantly review cost of contracts,” he said.
Usman further said the reduction in inflation rate by 0.05 per cent from 18.17 per cent in March to 18.12 per cent in April was an indication of improvement over the previous month.
He attributed it to reduction in food inflation which was a non-core inflation area, adding that the improvement did not translate to improvement on people’s lives since it was brief and not all round.
“Ordinarily one will expect this to continue up to June when rains will be stable in the North and food prices are expected to begin to rise again due to short supply.
“However, the improvement is very short and it affects mostly the perishable items which have since reverted to see daily price increases with the advent of early rains in the core production areas of tomatoes and other perishables,” he said.
The don added that inflation was likely to skyrocket due to the imminent removal of subsidy on Premium Motor Spirit otherwise known as petrol and full scale rainy season.
It will be recalled that President Muhammadu Buhari on May 17, in a letter to both chambers of the National Assembly, sought approval to borrow N2.3 trillion from bilateral and multilateral organisations to fund the deficit in the 2021 budget.
Buhari said the National Assembly had already approved the borrowing of N4.6 trillion in the 2021 Appropriation Act.
The new borrowing is expected to part-finance the deficit in the 2021 budget.