Following the signing of the 2017 budget by Acting President Yemi Osinbajo, stakeholders have predicted that its implementation will both bring smiles and sadness to Nigerians.
This year’s financial plan had been tagged ‘Budget of Recovery’, apparently indicating that it was formulated to bring the country out of recession.
While some of the experts believe the economic plan is expected to end the current recession in the country, others argue that the budget is designed to boost revenue, which means more taxes for business owners, and might increase the nation’s debt profile. An economist, Mr. Segun Awojobi, explained that the strategic thrust of the 2017 budget was to ensure Nigeria get out of recession and be back on the path of growth.
He said, “The budget was designed to take the country out of recession and I can assure that Nigerians, especially the small business owners, will experience its impact. There is no doubt that Nigeria has in recent years “wasted” its large foreign exchange reserves through the importation of virtually everything: food, clothing, manufacturing inputs and even fuel.
“It will boost growth and processing of our own food; we will manufacture what we can, and refine our own petroleum products. We will buy ‘made in Nigeria’ goods. We will patronise local entrepreneurs and promote the manufacturing powerhouses in Aba, Calabar, Kaduna, Kano, Lagos, Nnewi, Onitsha, and Ota.”
Another financial analyst, Mr. Olushola Oni, stated that the budget was clearly designed to expand partnership between the public and private sectors.
To him, it includes development capital to leverage and catalyse resources for growth, as it will focus on critical ongoing infrastructure projects that have quick, positive effects on the economy.
“It will also utilise special economic zones and industrial parks as vehicles to accelerate domestic economic activities for innovation and wealth creation; contribute to food security and create a platform for agro-business in the agriculture supply chains through the Agriculture Green Alternative Plan,” he said.
However, Managing Partner, Nesbet Consult, Dr. Alaba Olusemore, picked holes in the economic plan.
According to him, a chunk of the key budgetary reform initiatives the 2017 budget aims at one direction: improving the revenue base of the country. To him, that means some business owners should be ready to pay more for taxes if the budget is designed to increase revenue.
To achieve this, the government plans to enforce additional oil-related revenue through royalty recoveries, marginal field licenses, as well as early licensing renewals. He said, “Nigeria’s debt profile has risen to about N19 trillion, following huge deficits from the 2016 budget, as a result of low oil prices and lower government revenue.
In 2017, the budget deficit is put at over N2 trillion. To finance the 2017 budget, the government will not just be required to broaden the tax base, but also take some loans to bridge funding gap. This will inevitably raise the country’s debt profile over the next fiscal year.”
