2018 budget presentation Experts speak on implementation, growth consolidation

Experts have expressed mixed reactions while speaking exclusively to the yesterday on the 2018 Appropriation Bill.

Daily Trust

Professor Muttaka Usman of Economics Department, Ahmadu Bello University, Zaria said from the speech of the president, there was no linkages between the budget and the Economic Recovery and Growth Plan (ERGP).

On the parameters, Usman said even though the oil price benchmark is reasonable, but anything can happen because there are many factors that determine the price of the crude in the international market.

Commenting on the debt servicing, he said the amount can only make impact on the economy if the bulk of it is meant to service local debts but if it’s for the foreign debts the impact will not be felt.

However, Mr. Johnson Egu Chukwu, Chief executive officer of Cowry Asset Management Limited said: “I think the fact that the budget is presented early is a positive for us. The projection of 2.3 million barrels per day is realistic because, at 2.2 million barrels, we are already close to that. The benchmark of $45 is also ok. Today (yesterday) we saw $64 and the market has $67 this week.

“The difficult one for me is the projected growth rate of 3.5 per cent, and that is because of where we are coming from. However, if the budget is approved and kickstarted before the expiration of the current budget cycle, and we begin to see the spending on capital budget from day one and the creation of jobs, then that projection is achievable.

“They have also promised a 12.5 inflation rate. We have seen a progressive decline in this area from the over 18 per cent to about 15.9 currently. If they sustain and intensify the policies on agriculture, then we will get there.

“On a balance, voting additional money for peace in the Niger delta is also instructive. All of these, if faithfully implement, will see a sustained investors’ confidence on our economy.”

The Head of Economics Department of the University of Abuja, Professor Sarah Anyanwu, said it is not enough to keep having an incremental budget every year with low implementation rate.

“It is not announcing big amount that is just what matters. Implementation is also important,” Professor Anyanwu said.

The economist said that going by the way the value of the budget is increased yearly; it seemed the federal government had abandoned the zero-based budgeting adopted at the inception of the current administration.

“From the first year, it has been increasing. If they had done zero-based budgeting, I don’t think they will have up to N8.61 trillion for 2018,” she said.

The expert also expressed worry that the projected capital expenditure of N2.43 trillion is less than the recurrent expenditure of N3.49 trillion.

“Recurrent expenditure being greater than capital expenditure is not also in line with this administration’s promise to make capital expenditure higher than recurrent expenditure. Last year, the capital expenditure was greater than the recurrent expenditure. I don’t know why they relented this year,” she said.

For debt financing, she said, the government must tread carefully because borrowing will increase Nigeria’s indebtedness again.

She asked the government to do critical analysis and define a clear purpose before taking any loan to finance the deficit. She said any borrowing must be for capital expenditure such as road construction, airport, roads, housing and electricity.

She suggested that the federal government should target a minimum of 70 per cent implementation of the 2018 budget.

Chief Executive Officer, BudgiT, a civic organization promoting transparency in governance, Seun Onigbinde, Speaking yesterday during the maiden edition of the ‘Meet-The-Executive’ organized by the Finance Correspondents Association of Nigeria (FICAN) in Lagos, 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: “Government has to work very hard since it has limited time to prove its mettle as the 2019 elections approaches.”

“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.”