Analysts yesterday commended President Muhammadu Buhari for the timely transmission of the 2022 Appropriation Bill to the National Assembly.
They also expressed satisfaction over the benchmarks in the appropriation, describing them as realistic.
In separate interview with THISDAY, the analysts, however expressed hope that the legislature would reciprocate the president’s gesture by concluding work on the budget before the end of the year to enable implementation to commence in January following the president’s assent.
Buhari, yesterday presented the N16.3 trillion 2022 Appropriation Bill to the Joint Session of the National Assembly.
Reacting to the development in a chat with THISDAY, Chairman, Chartered Institute of Bankers of Nigeria (CIBN), Abuja Branch, Prof. Uche Uwaleke, said the mending of the hitherto broken budget cycle remained a major achievement by the current administration.
He said, “I think the budget benchmarks are largely realistic with respect to crude oil price of $57, exchange rate of circa N410 and real GDP growth rate of 4.2 per cent.
“First, let me commend the President for presenting the 2022 appropriation bill in relatively good time.
He also called on the National Assembly to expedite action on the bill.
He said, “Indeed, the mending of the hitherto broken budget year is a major achievement by this administration.”
Uwaleke, however, pointed out that inflation projection of 13 per cent appeared unrealistic considering the implementation of the Petroleum Industry Act (PIA) requiring the complete removal of fuel subsidy.
He said, “As the president admitted, the concern about increasing deficit financing through borrowing is justified. “The consolation however is that all new borrowings are tied to critical projects.
“It’s equally noteworthy that the government has made provision for use of Green bonds as well as PPP arrangements in financing infrastructure.”
Also reacting to the budget proposal, Managing Director/Chief Executive, Dignity Finance and Investment Limited, Dr. Chijioke Ekechukwu, said with enough fiscal discipline, the anticipated gains from the oil price differential could fund part of the budget deficit, thereby reducing the amount of money to be borrowed.
He said, “First, I commend the president for sending the budget on time to the National Assembly so that the fiscal calendar could still be maintained.
“I am satisfied with the benchmarks of oil price of $57 per barrel and the output level of 1.88million barrel per day, exchange rate at $410.
“Unfortunately we will continue to operate at the whims and caprices of oil price volatility.”
On his part, Managing Director/Chief Executive, SD&D Capital Management Limited, Mr. Idakolo Gbolade, pointed out that the, “N16.3 trillion is going to throw Nigeria into more debt trap as a substantial part of it will be financed by additional borrowing.”
He noted that this comes at a time when almost 100 per cent of the country’s revenue was being used for debt servicing, adding that the price of crude oil though high at the moment, could still be affected, leading to lower returns from oil revenue.
He said,”The present agitations by some states for VAT revenue to be collected by states presently in the supreme court could lead to further dip in federal government revenue if the states win the case.
“The government is also spending more on recurrent expenditure in 2022 and most of the capital expenditure might not yield returns in the 2022 fiscal year.
“I foresee a challenging year for the government’s fiscal policies in 2022 and the government mostly likely might not implement more than 50 per cent of the budget due to various constraints ahead.”