Finance and economic experts said that the N9.1tn budget size was implementable.
In separate telephone interviews, those who spoke were the Registrar, Institute of Finance and Control of Nigeria, Mr. Godwin Eohoi; a former Director-General, Abuja Chamber of Commerce and Industry, Mr. Chijioke Ekechukwu; and a developmental economist Odilim Enwagbara
Eohoi said in view of the fact that oil prices had been on the upward trend in recent times coupled with the aggressive tax revenue drive of the Federal Government, implementing a budget of that size would not be too difficult.
He stated, “It will be possible to finance the budget of N9.1tn because looking at the oil price, it was at $50 to a barrel when the budget was presented, but now it’s selling for above $70 per barrel. So, it is still within acceptable limit for the lawmakers to raise the benchmark to $50 per barrel.
“There are other windows available for the government to generate more revenue considering the aggressive drive to raise tax revenue from six per cent of the GDP to 15 per cent. So, I think the budget is implementable by the government.”
Enwagbara said at N9.1tn, the Federal Government’s budget was still low compared to the country’s GDP size.
He noted that for the budget to make any significant impact, it must be raised to about 10 per cent of the GDP.
He stated, “Nigeria’s budget is for consumption and what they did is to increase the capital portion of the budget. But I believe we should also raise the budget benchmark price from the $50 proposed by the lawmakers to $80 per barrel to enable us to deploy more revenue to fund the budget.
“The budget should be increased further to about 10 per cent of our GDP because we have one of the lowest budgets in the world. When South Africa is budgeting about $200bn, Nigeria has about $28bn budget for the year, this is very low for us as a country.”
Ekechukwu, on his part, stated, “The increase in the budget figures by the National Assembly can be absorbed by the expected revenue from oil and other sectors.
“This revenue expectation does not obliterate the deficit end of the budget, which will still be funded by debts. Much as the debt profile of Nigeria is rising every day, the debt to the GDP ratio is still not above any tolerable benchmark.
“As far as the increase is not arising from indiscriminate and arbitrary increase for selfish gains, the budget will be implementable.”
An economic expert and Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said the expected increase in revenue on the back of rising oil prices should either be used to reduce government borrowing or be channelled entirely to capital projects rather than increasing recurrent expenditure, debt servicing and statutory transfers.
He stated, “If the government is projecting an increase in revenue, that increase in revenue should have been used to bring down the amount that it is going to borrow in the fiscal year, and subsequently bring down the debt service costs. That way, the government would have had a more prudent fiscal budget.
“What will be the motivation for increasing the statutory transfers? It simply means that more money is going to the National Assembly, because part of the statutory transfers goes to the National Assembly, the judiciary and some agencies of government that are self-accounting. I think ordinarily, everybody in the National Assembly should be focused on having a more prudent financial position for the Federal Government.”
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