Atiku’s argument on Buhari’s Fiscal Policy flawed, says presidency

The presidency yesterday took a swipe at the presidential candidate of the People’s Democratic Party (PDP), Atiku Abubakar, describing him as lacking in knowledge of President Muhammadu Buhari’s fiscal policy.

Atiku had described the N8.83trillion budget proposal for 2019 presented by President Buhari to the joint session of the National Assembly as “fundamentally flawed and failing to address current realities.”

During the session at the parliament, some of the lawmakers were seen booing the President, a development that has continued to precipitate reactions across the country.

Reacting to the development, Special Adviser to the President on Media and Publicity, Femi Adesina dismissed the former Vice President, saying The PDP candidate failed to offer substantive and workable solutions to the identified “realities.”

According to him, Atiku describes the underlying assumptions of the budget as generous, wild and untenable but did not propose alternative assumptions that would have been more appropriate. Adesina argued that Atiku said the economy is yet to recover from the 2016/2017 recession, but failed to create his own definition of an economic recession, which is a technical term with a universally applicable meaning.

The presidential spokesman said: “When an economy experiences two consecutive quarters of negative GDP growth, it is said to be in recession and whenever it returns to positive GDP growth of whatever rate, it is said to have exited recession. It is doubtful if he understands the simple meaning of recession.

“He conveniently forgets that under the immediate past federal administration, oil prices were at an all-time high with substantial growth in foreign borrowings, and yet foreign reserves nose-dived from a peak of $62 billion to as low as $24 billion. He said his repeated reference to the price of Brent Crude throughout his statement may be indicative of his lack of knowledge that Nigeria’s Bonny Light Crude trades at a premium of at least $2 per barrel over the price of Brent; just as his reference to Nigeria’s OPEC quota may also suggest that he does not know that Condensates do not count in measuring compliance with the quota.

The presidential media aide said the PDP Presidential candidate who faulted the provision of N305 billion for NNPC’s cost under-recovery on Premium Motor Spirit (PMS) did not explain exactly what he would do about PMS pricing.

Adesina also noted that Atiku complained of movements in foreign portfolio investment, which are often volatile and reflect monetary policy normalisation in the United States, but he was silent on the positive trade surplus mentioned in the budget speech, which truly reflects living within our means as a nation.

He further berated Atiku, saying he calculated the budget deficit as a percentage of current revenue rather than as a ratio of gross domestic product, which is the preferred standard for inter-temporal measures of the deficit. Using this more appropriate measure the national fiscal deficit is 1.3% of GDP which is well below the 3% specified in the Fiscal Responsibility Act and well within the best global norms. So much for those who claim they have the magic wand to grow the economy.