Conditional signing of budget portends danger – Expert

The conditional signing of the 2017 budget by the Acting President, Prof Yemi Osinbajo, portends danger to the effective implementation, especially the capital part, a former Managing Director of New Nigeria Investment Company (NNIL) and Federal Mortgage Bank, Alhaji Kassim Musa Bichi, has said.

Alhaji Bichi said “The legislature ought not to have substantially altered the executive’s proposals in major projects without the latter’s prior agreement as doing so had caused the delay in signing the budget and the conditional signing may not ameliorate the problem that caused the delay in due course.”

He also said with N2.64 trillion recurrent expenditure and N2.17 trillion capital investment, the ratio of capital to recurrent was not good enough as capital expenditure ought to be higher than recurrent.”

He said: “The projected 2.2 million barrel daily output of crude oil ought to have been scaled down to 2mbd that the NNPC gave as the actual output because if the 200,000 daily deficits persist it will negatively adversely affect the projected revenue and eventually the budget implementation.

“The N2.36 trillion (32%) budget deficit that is to be financed with borrowed funds is a source for concern unless the projects to be so funded are of economic nature or enablers or catalysts to developments that will yield economic dividends.

“The US$44.5/barrel benchmark oil price used, $3.5 below the current market price hovering around $48, though okay should have been $45.

“The allocation of the major portion of the capital budget to projects in the five key programme areas of the Economic Recovery and Growth Plan (ERGP) that is macro-economic stability; increased agricultural production; energy sufficiency; industrial expansion and the modernisation and expansion of transportation infrastructure is commendable.

He said, however that on the whole the budget, though late, had the potential, together with the 36 states budgets, of getting the country out of the current recession if religiously executed.