Financial experts and stakeholders on Thursday commended President Muhammadu Buhari for the early submission of the 2021 budget proposal and called for prompt passage.
The experts also called for strict implementation, after passage, of the budget.
Uche Uwaleke, a professor of Capital Market, commended the federal government for submitting the proposal in good time.
Uwaleke, who is also the president of Capital Market Academics of Nigeria, said the assumptions and budget parameters were realistic, except the exchange rate of N379 to the dollar.
According to him, the exchange rate of N379 is unrealistic due to the ongoing process of unifying exchange rates across all foreign exchange windows by Central Bank of Nigeria.
“I also think the real Gross Domestic Product 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 projected a GDP growth rate of 1.3 per cent 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 transportation. For the first time in many years, the capital allocation to education and health are above that of defence,” Uwaleke said.
He, however, added that new borrowing of over N4tn to finance a deficit of over N5tn was worrisome, advising 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 N13.08tn and not jack up the figure in the end,” Uwaleke said.
Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said the early presentation of the 2021 budget to the National Assembly was a welcome development, which he said would give the lawmakers enough time to examine it and keep to the January to December budget period.
He, however, expressed concern over huge cost of debt servicing which stood at N3.12tn.
“The N13.08tn estimate is huge to make impact but the high cost of servicing debt which is about N3.12tn is huge. All the budget assumptions look realistic if the fiscal and monentary authorities will match their words with actions by complementing each other with good policy framework to drive the economy,” Omordion said.
