The Manufacturers Association of Nigeria (MAN) has lauded the proposed aggregate capital expenditure of N5.35 trillion in the proposed N17.7 trillion 2022 budget tagged “Budget of Economic Growth and Sustainability.”
It said the proposed aggregate capital expenditure of N5.35 trillion, which is 32.64 percent of the total expenditure was against the N4.37 trillion and 32.2 percent of the 2021 budget.
MAN said this meant that the amount allotted to capital expenditure would increase appreciably in 2022, particularly for the building materials and construction segment that has higher multiplier effects on the manufacturing sector.
Making this known in his preliminary comments on the proposed 2022 Budget, MAN Director-General Segun Ajayi-Kadir said the increased allocation to capital expenditure in the proposed 2022 budget no doubt, buttresses the fact that the government intends to continue to upscale the development of infrastructure across the country.
“This is a development that MAN considers laudable because it resonates with our annual advocacy submission to the government on the need to prioritize infrastructure development for sustainable economic growth. It will also increase production in the real sector of the economy,” he said.
MAN also commended the Federal Government for the proposed increase in allocation to Defense, Infrastructure, Health, and Education amongst others.
“The increase is an indication that government intends to maintain its quest to further narrow the infrastructure gap, secure the health of the populace, improve human capacity development and protect lives and property in the country,” the association said.
Ajayi-Kadir commended the government for the early preparation of the proposed budget 2022, which is aimed at accelerating the pace of economic recovery, promote economic diversification, enhance competitiveness, ensure social inclusion and guarantee sustainability.
“MAN also notes the content of the speech of the President of the Federal Republic of Nigeria on the proposed Budget 2022, particularly the extensive effort to give account on the implementation performance of the 2021 budget and achievements of the government, while we await the publication of the breakdown,” he stated.
The MAN DG said manufacturers were expectant that the budgetary aspirations would be achieved considering the prevailing and foreseeable global, continental and national economic developments.
He, however, said judging from the content of the address of the President and the presentation of the Minister of Finance, Budget, and NationalPlanning, the general character of the proposed budget suggests a huge fiscal deficit of N6.26 trillion.
“This translates to further increase in debt servicing responsibility, upscale in the drive for internally generated revenue, with moderate support for economic and productive activities, including manufacturing.
“It is, therefore, imperative for government to exercise caution in borrowing and work diligently to lower recurrent expenditure. This will positively impact the planned budget deficit and the efficacy of the budget as a whole,” Ajayi-Kadir said.