Expert raises inflation concern on states’ inflated 2018 budgets

The Executive Director, Nigeria Business Research and immediate past member of the Central Bank of Nigeria’s Monetary Policy Committee, Dr. Doyin Salami, has raised concern about the likely impact of increased spending by sub national governments under their 2018 appropriation.

Salami made the remark while delivering the keynote address at the Renaissance Capital 9th annual Pan-African Investors Conference in Lagos, yesterday.

He said sub national (state government) have raised their total annual budget by 40 per cent, from N6.6 trillion to N9 trillion, in addition to another N9 trillion by the Federal Government.

“What happens when all that money is spent? It can and will be spent on the back of raising oil output,” he cautioned.

Responding to why Nigeria needed to enter into a swap agreement in the face of increased forex earning, the keynote speaker said: “I am one of those people who have always argued that we need to broaden our financial instruments and so I think it is useful.”

Also speaking on the drop in the yields of our bond instruments, he argued that spread is still wide enough, and the ease in the yield would not be much of a disincentive.

He, cautioned rising US however, that the rate and the strengthening the dollar should a concern because presents a risk.

Reflecting on the economy, he said, “looking beyond 2019 offers a bit of risk, but between now and 2019, I think we are safe.”

He said all the numbers showed that the country is on its way up but still very fragile.

Salami contended that while agriculture is at the heart of where we are, manufacturing has a lot of work to do, same as real estate.

According to Igor Vayn, Chief Executive Officer of Renaissance Capital, “Africa remains a key geography for Renaissance Capital, and we are confident about the potential of the continent’s fastdeveloping economies. of be it