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Budget 2017: Our fears, hopes by stakeholders

•Govt urged to focus on implementation

Despite signing the 2017 Appropriation Bill into law six months behind schedule, stakeholders believe the real issue is with the implementation of the Appropriation law.

Barley 24 hours after signing the 2017 Appropriation Bill into law, Nigerians yesterday expressed their reservations. They   spokes of their fears and expectations of the N7.44 trillion Budget of Economic Recovery and Growth.

It was Appropriation Bill was on Monday signed into law at the Presidential Villa in Abuja by Acting President Yemi Osinbajo, about 25 days after it was passed by the National Assembly at a joint session of the Senate and House of Representatives.

Not a few of the stakeholders expressed concern that an Appropriation Law that should have started running since January was signed almost halfway into the year.

The former Executive Director, Keystone Bank Limited, Richard Obire, said the delay in signing the budget was not good for the economy, pointing out that the Federal Government has barely six months to implement the budget.

However, he said the delay may not affect the implementation of the recurrent expenditure considering that government has been paying salaries to workers. On the other hand he said the capital expenditure remains the one that is adversely affected by the delay.

He said: “By delaying the signing of the budget, many projects that would have been initiated and completed within the period may not be completed within the fiscal year”, adding that the delay will rub off negatively on the budget implementation.

Noting that the N143 billion injected into the budget by the National Assembly is on the expenditure side, Obire said raising the expenditure vote would trigger an increment on the deficit side of the budget, a development he said, would require more borrowing.

He argued that more cash would be required fund through borrowing, thus increasing the chances of government competing with the private sector in the debt market.

Obire said the deadline for signing the budget was Monday, after a 30-day window.

“That delay was not good at all for the economy. But now that it has been signed, the next approach will be to ensure it is well implemented for its positive impact to bear on the economy to be realised,” he said.

He said the recurrent expenditure was estimated at N2.99 trillion, capital expenditure (N2.18 trillion) and N2.36 trillion was allocated to fiscal deficit.

The highlight of the budget showed that the Ministry of Power, Works & Housing got the highest vote of N586.54 billion. The Transport Ministry got N256.52 billion and Education and Healt ministries were allocated N455.41 billion and N308.46 billion respectively.

A one-time President of the Chartered Institute of Bankers of Nigeria (CIBN), Okechukwu Unegbu, said signing the budget was not as important as what the budget can do for the economy. “It is not about signing. The question is; will the budget help the economy?

Unegbu pitched his tent with the Acting President’s position that the National Assembly lacks the power to raise the budget, but that they can cut it, warning that the executive may not implement the additional projects imported into the budget. He, however, said the budget passage and signing would reduce the level of unemployment in the country, even as he regretted the small allocation to education.

Unegbu said: “Education should have the lion’s share because of its importance in the socio-economic development of the country. Overall, the budget signing is good news for the economy and a great start.”

On his part, the President, Manufacturers’ Association of Nigeria (MAN), Dr. Frank Udemba Jacobs, commended the N7.44 trillion Budget and expressed the hope that the implementation would commence soon to compensate for the nearly six-month lost.

He criticised the practice of rolling over of development plans into another year, saying the practice makes planning difficult.  Jacobs regretted that the uncertain nature of the country’s budget process has conditioned many to either plan outside the document, or take the initial figures mentioned during the budget presentation.

“The first half of the year has gone and the signing now kick-starts financial market’s strategy that is targeted at the country’s fiscal plans. Budget is about time and resources”, he said.

Responding to a question on whether the sectoral votes as exemplified by about 30 per cent of the budget going for capital expenditure is commendable, the MAN chief lauded the new development, hinging his commendation on the deplorable state of infrastructure, which affects business operations.

According to him, if the implementation is carried out judiciously, there would be a significant improvement on the national basic infrastructure.

The Director-General of the Lagos Chamber of Commerce & Industry, Mr. Muda Yusuf, welcomed the signing of the budget as a step forward.

He told The Nation that it would put an end to the suspense and uncertainty caused by the non-passage and signing of the budget.

According to him, the next level of expectation is its speedy and effective implementation so that the citizens can get the desired value from the budget.

Yusuf canvassed for a review of the entire budgetary process and to set timelines for every stage of the process.

He advised that specific time frame must be set for the presentation of the budget to the National Assembly, for the consideration of the Appropriation Bill by the National Assembly and for the assent by the President.

The LCCI director-general suggested the enforcement of discipline of timing into the budgetary process, stressing that delivering a budget halfway into the financial year does not augur well for the overall economy.

Yusuf said: “There is also an urgent need to define the limits of authorities of the executive and the legislature on the Appropriation Bill. A judicial pronouncement is imperative to determine the extent to which the National Assembly can make changes to the Appropriation Bill. This issue has become a recurring factor in the delay that have characterised our budgetary process.”

To organised Labour, the delay in the assent to the 2017 Budget notwithstanding, its full implementation would have a positive effect and also take care of moving the economy out of recession.

The Secretary-General of the National Union of Textile, Garment and Tailoring Workers of Nigeria (NUTGTWN), Mr. Issa Aremu, said urged the Ministries, Departments and Agencies (MDAs) to hit the ground running.

Aremu said: “Although the budget is coming very late, it is better for it to be late than never. The various agencies of t government should be allowed to do their job without undue interference or hindrances. The only way the budget can make a meaningful impact is for the government to ensure its full implementation.”

Applauding the N7.44 trillion Appropriation Act for focusing on reflating the economy through import substitution and patronage of made-in-Nigeria goods, he called for the immediate constitution of a tripartite committee by the government to agree on a new minimum wage, after which a supplementary budget should be sent to the National Assembly for its implementation.

He said: “Our union will support President Muhammadu Buhari to realise the vision of import substitution and jobs creation. We demand that the disbursement of this huge fund should revive local industry, reopen closed factories and should not be spent on financing frivolous imports and perpetuate unemployment.”

President of the United Labour Congress (ULC), Joe Ajearo, insisted that the  full implementation of the  budget should not be downplayed, saying that is the only way Nigerians can feel the impact of the budget.

Reacting, former President, Association of Telecoms Companies of Nigeria (ARCON), Emmanuel Ekuwem, commended the huge capital component of the budget. He advised the Federal Government to ensure its effective implementation.

According to him, investment on infrastructure and construction would accelerate Nigeria’s exit out of recession, create massive job opportunities and ensure a boost in the national gross domestic product (GDP).

Dr. Ekuwem, who is also the chairman, Teledons Group, an information communication technology (ICT) firm, advised the government to lay emphasis on Nigerian content in the implementation of the budget.

He said local content involvement in the budget must be holistic, ranging from the use of local hardware, software and expertise, warning that the failure to do this will lead to capital flight and further worsen the weakened Naira.

The Chief Executive Officer, Pinet Infomatic, Lanre Ajayi, urged the Federal Government to follow the blue print of the National Broadband Plan (NBP) outline by the previous administration.

According to him, there are milestones set in the yet-to-be met plan, which he noted, has been drawing the entire industry back.

He also urged the government to encourage the growth of the local ICT ecosystem by patronising products and services from the industry.

Ajayi, who is a former president of the Nigeria Internet Group (NIG), said the Federal Government, as the biggest spender in the economy, should, as a deliberate policy, patronise indigenous and original equipment manufacturers (OEMs) to boost job creation and the economic growth.

Detecon International Client Partner Olusola Teniola said with every budget which is planned ahead, it’s imperative for the government to put control and monitoring procedures in place to ensure implementation of projects.

Detecon International is a subsidiary of Deutsch Telecom Group of Germany.

Teniola said: “If projects are successfully executed and delivered, the social dividend to the communities that need it most will be felt. Financial Year 2017 has only six months more to go and therefore expedient disbursement of funds by government is paramount at this critical time – these funds will fuel economic activity through government spending.”

An analyst and lecturer at the Pan Atlantic University, Lagos, Dr. Austin Nweze, described signing the budget into law halfway into the year as a challenge on its own unless the government hits the ground running with the implementation.

He noted that the delay has caused grave setback to economic activities. Companies and industrial concerns have been waiting for the budget for a long time.”

He, however, expressed doubt over immediate implementation, as according to him, it would take at least one month to implement the budget.

Nweze also disagreed with the Acting President’s position that the budget would take Nigeria out of recession, pointing at faulty fiscal and monetary policies as reasons. He noted that if the economic fundamentals are wrong, it would be difficult to get the economy right.

He said: “Signing the budget in half of the year is already a setback. Although, they (government) may extend the execution to May of 2018. Even if they extend the execution of the budget to May next year, it might be difficult to achieve the anticipated objectives of the budget.

“It’s also important to know that it would take at least one month before the execution of the budget. Do also remember that what the government has been spending illegally before the signing of the budget must be factored into the budget.

“Also do they have the money to execute it? Sourcing for the funds to execute the budget is a challenge. Although they can borrow from institutions such as the World Bank to fund the budget, to make the budget have positive impact on the economy, the government needs to start implementation immediately, deploy money into the system and ensure that at least 85 per cent of the capital appropriation is achieved and on the appropriate projects in addition to the recurrent appropriation.

“Also the political rhetoric that having signed the budget into law will get the country out of recession is untrue. That the budget is tied to Economic Growth and Recovery Plan  (EGRP) is only an aspiration. The nation needs more than two budgets to get out of recession in addition to putting place proper fiscal regime and monetary policies. We need to have good policies in place before we begin to make meaningful and sustainable impact on the economy.

“Nigeria needs to have single exchange rate as against the current multiple exchange rates. Interest rate has to be brought down to boost economy. The government has to encourage domestic production, encourage growth of science and technology and focus less on oil and gas.

“Currently, inflation is 17.4 per cent, monetary policy rate (MPR) is 14 per cent and interest rate is 25 per cent or above. The Federal Government through the Central Bank of Nigeria (CBN) is only practicing inflation targeting, which is not good enough for our economy.

“Inflation targeting is the reason interest rate is high. The monopoly and undue control of the foreign exchange market by the government and dependence on importation doesn’t encourage growth of the economy.

“Power accounts for 65-80 per cent of cost of production underscoring the critical position of power in economic growth. All efforts to make the power sector work seem fruitless because the fundamentals are not right. The government has to focus on making the power sector work by getting the policies and actions right.

“The government should not focus on short term plans as currently seen because it is not helping the economy. Domestic production has to be highly encouraged to enable the merger of inflation and local production at a point. This will mark the foundation of a stable economy.

“Currently, the fundamentals are not right. The future is science and technology and should be highly encouraged to diversify the country from dependence on oil and gas.”

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