The 2018 budget recently presented by President Muhammadu Buhari to the National Assembly may not grow the economy as anticipated by the Federal Government, Finance expert and Chief Executive Officer, Financial Derivatives Limited, Mr. Bismarck Rewane has said said.
Like Rewane, a Professor of Economics at the University of Lagos, Ifeanyi Nwokoma has described the 2018 budget as a very ambitious proposal that was lacking in a clear plan of how to achieve set targets.
In a similar vein, Director General of Lagos Chamber of Commerce, Industry, Mines and Agriculture, Mr. Muda Yusuf faulted the silence of the budget on the controversial theme of subsidies which he said had become a major threat to the nation’s economy.
The Experts who reviewed the 2018 in separate interviews with DAILY ASSET said although the country was in dire need of growth given the current economic realities, the 2018 budget did not hold much promise to give the nation’s economy the desired leap.
Dissecting the 2018 fiscal estimates unveiled last week by President Muhammadu Buhari, 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 stated.
Regretting that multiple exchange rates in the economy were not addressed in the budget, the finance expert noted that the prevalence of such rates would continue to distort the market, just as he observed that the inflationary projection in the budget was 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,” he said.
Prof. Nwokoma in his analysis, described the 2018 budget as a very ambitious and “too optimistic” with no clear implementation strategies.
“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 remarked.”
He added, “we are not learning from the challenges or problems of 2017 budget. It is likely we fall into the same mess. Our budgetary woes have become recurrent, and we are not learning from the past.”
Director General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf in his comment about the budget commended the increase in the capital side of the expenditure compared to previous years.
He canvassed higher recurrent spending for the military, police, health and education sectors given their critical nature.
“That the budget is focusing more on infrastructure is a good way to go. But given that subsidy areas 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,” he said.
Infrastructure Deserves Funding Priority
Federal Government should ensure that a large part of the of the N8.6 trillion budget for 2018 targets infrastructure, Chief Executive Officer, BudgiT, a civic organization promoting transparency in governance, Seun Onigbinde, has said.
Speaking recently during the maiden edition of the ‘Meet-The-Executive’ organized by the Finance Correspondents Association of Nigeria (FICAN) in Lagos, Onigbinde said conversations of budget should involve everyone, because the impact of its full and efficient implementation or otherwise, also falls on the people.
Onigbinde, who spoke on the theme: “Budget Analysis, Monitoring and Implementation: The Role of Financial Journalists”, said there was need to ensure effective budget monitoring and implementation, insisting that government should bring accountability and probity to public finance spending.
“A large part of the budget should go to infrastructure financing. Government has to work very hard since it has limited time to prove its mettle as the 2019 elections approach,” he said.
He said government needs to diversify its revenue base, to enable it achieve its developmental objectives. “Many people are looking at this budget to see if there will be actual tangible achievement in it. The budget has to be quickly passed because we have a short period of governance next year. We have a lot of time for politicking. But before the politicking, let’s have the budget quickly passed and implemented,” he said.
Onigbinde explained that most of the assumptions for the revenue in the budget were bloated adding there was need to develop new strategies to attract more revenues.
“How are we going to build other streams of income opportunities. There are huge assumptions on revenue. How are we going to expand revenues from taxes. How are we going to raise Value Added Tax (VAT). Projections today show that oil prices will continue to rise,” he said.
He advised that all hands must be on the deck while discussing the adding that how public finances are spent should concern everyone.
Onigbinde also insisted that budget should focus on quality service delivery, implementation, and audit of whatever projects that have been executed using public finances. “After the projects in the budget has been effectively executed, there is need to audit the projects to ensure that transparency and quality value delivery,” he said.
According to him, only projects listed in the budget can be financed through it, and urged the people to ensure that present projects that have community benefits for funding through public finances.
He regretted that most of the states’ budgets were mere wishful lists, because the estimates were far higher than the states’ revenue bases.
“If government says the law demands that I pay my taxes, then they should also know that I have the right to know how the money is spent. We need to ensure that the resources of government are well spent. Public interest has to be a priority in spending public finances,” he said.
On the award of contracts, he said everyone has the right to bid and execute government contracts. “Contracts should be made available for everyone to decide if he or she can win and implement it. It should not be given to people based on familiarity,” he advised.