Experts dampen prospects of 2018 budget

Experts have dampened the optimism that greeted President Muhammadu Buhari’s presentation of the 2018 budget at the National Assembly from some quarters, arguing that it did not possess the sufficient ingredients to grow the economy.

The Chief Executive Officer, Financial Derivatives Company Limited, Bismarck Rewane, and other stakeholders from the academia and industry put forward this position.

They said although the country was desperately in need of growth, the 2018 budget did not represent a sufficient answer to the growth challenge.

The stakeholders said this at the 2018 Budget Seminar organised by the Securities and Exchange Commission (SEC) in Lagos on Friday.

Also present at the forum were a professor of Economics at the University of Lagos, Ifeanyi Nwokoma; the Director-General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf; and the Director-General, SEC, Mr. Mounir Gwarzo, among others.

For the 2018 budget, Rewane said expenditure growth was zero, pointing out that there were no stimulants for growth.

“It is not an expansionary budget; we are not spending our way to growth,” he said.

He said multiple exchange rates in the economy were not addressed in the budget, noting that the prevalence of such rates would continue to distort the market.

Read also: Nigerian govt, Chinese firms sign $5.79bn agreement on power

He added, “Inflationary projection in the budget is not realistic. Government is silent on subsidy on power and petroleum products, and minimum wage. The projection for non-oil revenue is not realistic and the deficit gap may widen after all.”

Similarly, Nwokoma described the 2018 budget as a very ambitious one.

He said, “Oil production is also ambitious. We are being too optimistic without a clear plan of how to achieve our target. Over the years, we have distorted the budget cycle. This will affect implementation and good accounting. Nigeria should have a clear budget cycle and budgetary interferences should be avoided.

“N305 per dollar exchange rate is not real. I foresee a wide margin in the budget implementation. Government ambition is magical. If we hasten the passage of the 2018 budget for February or so, 2017 budget implementation will be inconclusive.”

He added, “We are not learning from the challenges or problems of 2017 budget. It is likely we fall into same mess. Our budgetary woes have become recurrent, and we are not learning from the past.”

Yusuf on his part said the budget had a higher capital spending compared to previous years, noting that it was commendable.

He also said the military, police, health and education were areas for higher recurrent spending, given their critical nature.

He added, “That the budget is focusing more on infrastructure is a good way to go. But given that subsidy arrears are becoming a huge threat to the economy and the budget is rather silent on it calls for worry.

Yusuf said, “Being totally silent about this is bad. Contractor arrears are also becoming a threat as over ‘N2tn is at stake. The risk involved in doing business with government is becoming worrisome.

“The private sector participation in the budget was not made clear especially in terms of infrastructure financing. The private sector should play a major role here.”

 

RipplesNigeria… without borders, without fears

Click here to join the Ripples Nigeria WhatsApp group for latest updates.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now