NASS N7.441 trillion budget will pull Nigeria out of recession, says economic experts

Based on the report, the size of the 2017 budget was increased from proposed N7.298 by the executive to N7.441 trillion (N143 billion increment).

The lawmakers also increased statutory transfers to N434.4 billion from N419.02 billion, while the amount proposed for debt service was increased to N1.841 trillion from N1.66 trillion.

The sinking fund for maturing bonds was retained at N177.4 billion, while non-debt recurrent expenditure was increased to N2.99 trillion from N2.98 trillion, as contained in the budget proposal.

In the version passed on Thursday by both houses, the parliament made a provision of N2.174 trillion for Development Fund for capital expenditure. Also of importance is that fact that the National Assembly increased its budget to N150 billion, from the proposed N120 billion.

Comments from the heads of Nigerian parliament

Speaking after the passage of the budget, the leaders of the parliament expressed hope of the budget boosting economic performance and getting the economy out of recession.

President of the Senate, Dr Bukola Saraki, noted that the budget passed contains all necessary details and provision for important developmental projects are properly catered for.

“This budget that we have passed, you recall, enabled us to record a number of first. This is the first time we had a public hearing as part of the process of the 2017 Appropriation Act.

“The level of engagements with the Civil Society played a part in making this budget a different and remarkable one. Another first, we have achieved, is ensuring that the line by line details of the budget was laid down along with the Bill, the Senate President stated.

“I am very proud of what we achieved and we do hope that this budget of recovery, we believe has reflected equity, it has ensured efficiency and adequate resources to all relevant sectors, and will go a long way in helping Nigerians to come out of the economic recession, he asserted.

Also commenting on the document, the Speaker of the House of Representatives, Hon. Yakubu Dogara noted that the Executive arm should ensure adequate consultation before altering any item or figure in the document.

Speaking on behalf of the lower chamber, Chairman, House of Representatives Committee on Media and Public Affairs, Abdulrazaq Namdas, said the capital expenditure component (N2.1trillion) will get then economy out of recession.

“The capital expenditure will enhance power, agriculture, defence and finally help revamp the economy.

Namdaz furthered stated that “everything was done to give Nigerians a sense of belonging and we’ll continue to improve the process as we were very thorough this time around.

Economic Expert expressed highs expectations from the Budget

Economic experts have expressed mixed feelings about the expected impacts of the budget. Taiwo Oyedele, Head of Tax and Regulatory Services, PWCNigeria noted that the budget passage is a cheering news and would greatly limit the economic damages from an unexplainable long-delayed passage of the fiscal document.

“As it turns out, I have not seen any groundbreaking changes or scrutiny to the budget proposals to the delay and Nigerians can only hope that all hands will be on deck for speedy implementation especially the capital expenditure component.”

Mr Dolapo Ashiru, Head of Stockbroking Service, Lead Capital Plc, expressed reservations about the jerking up of the budget’s oil price benchmark by the National Assembly.

“The $44.5 crude price target is not ambitious given the fact that crude oil price has in recent time risen to more than $50 per barrel. I would have preferred if they stuck with $42.5 per barrel. $44.5 target is too near the current price, but it is still achievable.

“Concerning the high amount of money the government wants to use for debt servicing, first of all, the government wants to borrow ambitiously. When the government wants to handle a lot of infrastructural projects, it needs to borrow. Unfortunately, it is borrowing in Naira, he said.

“So N1.8 trillion is over 20 percent of the budget; that is where we are now. It is a major chunk of the budget; it is rather high, but we are happy that most of the money is for infrastructural projects. Again, it is because of high-interest rate environment; so, it is the price we have to pay for development.”

An academician with the Nasarawa State University, Uche Uwaleke, stated that the “sectoral allocations of the budget largely reflects government priorities are consistent with the Economic Recovery and Growth Plan.

He explained that for the 2017 budget to facilitate economic recovery, emphasis must be placed on implementation.

Mr Segun Omosehin, Managing Director of Mutual Benefits also noted the budgetary allocation for infrastructural development will directly have impacts on the economy if fully implemented.

“Anything you put on infrastructure will directly impact the economy because it will touch the common man. Also, the government took a decisive step to put a specific amount for social welfare, which is to provide cash for the less privileged Nigerians and is highly commendable.

“Note that the government plans to finance the budget deficit through debt and about 52 percent of that debt is to be sourced locally. About N1.2 trillion is to be sourced locally and this will have a direct impact on activities in the economy. Within these parameters, there are areas for companies like ours that are concerned with covering risks associated with economic activities in the system to be hopeful. The picture painted from the budget gives hope that activities will pick up and insurance will do well,”Omosehin noted.

President Muhammadu Buhari submitted last December a budget proposal of N7.29 trillion to a joint session of the National Assembly.

With the passage of the budget, it is expected that the Acting President, Prof. Yemi Osinbajo, would assent to the Appropriation bill and ensure its prompt full implementation of its letters.

NASS N7.441 trillion budget will pull Nigeria out of recession, says economic experts

The

Enhance Your Pulse News Experience!

JOIN OUR PULSE COMMUNITY!