Financial experts on Thursday commended President Muhammadu Buhari for early submission of 2021 budget proposal and called for prompt passage.
The experts also called strict implementation, after its passage.
They spoke in separate interviews with the News Agency of Nigeria (NAN) in Lagos while reacting to Buhari’s presentation of the 2021 budget estimates to the National Assembly
Uche Uwaleke, Professor of Capital Market, commended the executive arm for submitting the budget proposal in good time.
He said this would allow the National Assembly sufficient period to consider and pass the appropriation bill.
Uwaleke, also President, Capital Market Academics of Nigeria, said that the assumptions and budget parameters were realistic, except the exchange rate of N379 to the dollar.
He said that the exchange rate of N379 was unrealistic due to the on-going process of unifying exchange rates across all foreign exchange windows by the Central Bank of Nigeria.
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“I also think the real Gross Domestic Product (GDP) growth rate projected at three per cent is a little ambitious in view of the impact of COVID-19 on the economy expected to linger till next year.
“This is why the recent Fitch report on Nigeria projects a GDP growth rate of 1.3 per cent for the country in 2021.
“The budget proposal seems to have set the right priorities with the bulk of capital spending going to works and housing, power and transport.
“For the first time in many years, the capital allocation to education and health are above that of defence,” Uwaleke said.
He, however, said that new borrowing of over N4 trillion to finance a deficit of over N5 trillion was worrisome.
Uwaleke said, “New borrowings of over N4 trillion to part-finance a deficit of over N5 trillion is worrisome given the already huge amount of over N3 trillion allocated to debt servicing alone.”
He said that the deficit to GDP should be kept within the three per cent threshold stipulated in the Fiscal Responsibility Act 2007.
“I hope the National Assembly will consider any amendment within the budget envelope of N13.08 trillion and not end up jerking up the figure,” Uwaleke said.
Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said that early presentation of 2021 budget to the National Assembly was a welcome development.
Omordion said that the early presentation would give the lawmakers enough time to do their jobs and to keep to January to December budget period.
He, however, expressed concern on the huge cost of debt servicing which stood at N3.12 trillion.
“The N13.08 trillion estimate is huge to make an impact but the high cost of servicing debt which is about N3.12 trillion is huge.
“All the budget assumptions look realistic if the fiscal and monetary authorities will match their words with actions by complementing each other with a good policy framework to drive the economy,” Omordion said.
NAN reports that Buhari, on Thursday, presented the 2021 budget estimate to a joint session of the National Assembly.
The proposed expenditure is put at N13.08 trillion with a crude oil benchmark price of $40 per barrel and a daily oil production estimate of 1.86 million barrels.
The budget contains recurrent expenditure of N5.65 trillion, personnel cost of N3.76 trillion and debt service of N3.12 trillion.