Mixed reactions trail N8.91trn 2019 budget passage

…Nigeria on the path of achieving price stability – CBN

Motolani Oseni

Reactions have continued to trail the passage of N8.91 trillion budget for 2019, as against N8.83 trillion budget presented by President Muhammadu Buhari in December 2018.

The Federal Government had presented N8.83 trillion budget for 2019, compared to N9.12 trillion budget for 2018, which represented a decline of N29 billion.

But The Daily Times notes that the passed N8.91 trillion was increased by the National Assembly by N80 billion.

Although, the lawmakers explained that the hike in the 2019 budget to N8.91 trillion was due to increased security expenditure needed by the government to combat rising militancy and kidnapping across the country, the budget still awaits President Buhari’s assent before it becomes a law.

Commenting on this development, the Head of Banking and Finance Department, Nassarawa State University, Prof. Uche Uwaleke said that early 2019 budget passage by the National Assembly is expected to trigger economic activities.

He said: “This is about the shortest period we have witnessed since 2015 with respect to the interval between the presentation of the budget proposals by the President and their passage.

“I hope the Executive arm does not have any qualms with the slight upwards adjustment made by the Legislature to the size of the budget which was mainly in respect of matters that manifested only after the proposals had been submitted such as the need to address the fallout of the carnage in Zamfara State.

“Following the President’s assent, I expect this development to trigger increased tempo in economic activities including shoring up investors’ sentiments in the stock market.”

Also, an economist, Dr. Boniface Chizea commended the National Assembly for early passage of 2019 budget, expressing concern over the tribunal outcome of the presidential election that could affect the budget to be withdrawn.

Chizea, who is the Chief Executive Officer, BIC Consultancy Services, said, “If for instance, there is distortion, the court says something different and we have to go back to the electorate.

“Then, the celebration might be premature. Even as at today been the end of April- meaning four months have gone. We have an issue with being able to implement the budget and issue of being able to implement the capital budget.

“Agreed, the early passage is a welcome development but it is not over yet. There are still some risk factors and one will look into which is uncertainty surrounding global oil prices.

“I think today it is a problem between the US and Iran, imposing a sanction and the price has gone beyond twice what is in the budget. But similarly, it can also be resolved overnight and the price begins to shift since we budgeted almost $60 barrel which today is above $70.”

Speaking ongoing forward, he said: “Federal Government needs to rework on the timeliness of the early passage of the budget which means that the budget must be presented in the third quarter of every year to ease the early passage.

“Secondly, there is a need for us to also, have a budget office with the legislator so they can collaborate with the budget office of the federation and as they work along they will know okay, we have responsibilities for their constituency.

“From that collaboration, budget issues can be tackled seamlessly when we now reach the approval stage, it will be faster and will remove all this delay.”

The Senate Chairman on Appropriation, Senator Mohammed Goje, explained in a budget paper that, “There is a slight increase in the budget deficit.

“There was also the need to provide more funds for the security and intelligence agencies to deal with additional emerging/unforeseen security challenges in the country.”

The budget paper showed that funds were also voted as severance pay to outgoing lawmakers that lost re-election during the February national election and for the induction of new Senators.

Parliament said the 2019 budget was aimed at consolidating growth. It approved a budget deficit of N1.9 trillion, representing 1.37 per cent of Gross Domestic Product (GDP).

The nation’s economy grew by 1.93 per cent last year, its fastest pace since a recession two years earlier, data showed, while inflation which has been in double digits for three years, fell to 11.25 per cent in March.

Buhari starts a second term of four years at the end of May. He won re-election pledging to revive the economy, improve security and tackle corruption.

The National Assembly had a benchmark of its budget approval on estimated crude production of 2.3 a million barrels a day assumed an oil price of $60 per barrel and an exchange rate of N305 to the dollar.

Meanwhile, the International Monetary Fund (IMF) has said Nigeria should work to keep inflation down and also, grow non-oil revenue if the economy must perform optimally.

The IMF gave the advice when it presented its regional economic outlook for sub-Saharan Africa in Abuja. The IMF said though it projected Nigeria’s economy to grow at 2.1 per cent in 2019, it doesn’t reflect the potentials of Nigeria.

“Monetary policy needs to be calibrated with an eye to keeping the inflation down and facilitating the exchange rate, Abebe Aemro Selassie, the director, African department at the IMF said.

“Specifically for Nigeria, I think we see some economic recovery”, he said, adding that growth in 2018 was close to 2 per cent, while 2.1 per cent is projected for 2019 but this is well below the potentials that this economy has”.

He said Nigeria needs to maximize its potentials and grow its non-oil revenue.

The minister of finance, Zainab Ahmed who also spoke at the event assured that the government was working hard to improve government earnings and recent efforts are proving positive.

Ahmed, who was represented by the permanent secretary, special duty, Federal Ministry of Finance, Mohammed K Dikwa, also said the current government had spent about N4.5trn into the productive sector of the economy for the purpose of massive job creation; reduce insecurity and infrastructure development.

Godwin Emefiele, the CBN governor, who was represented by the deputy governor, Economic Policy Directorate, Joseph Nnanna, said it was possible Nigeria strikes single digit inflation before the end of Q4 2019 as it is on the path of achieving price stability goal for a single level of inflation.