Nigeria's budget of recovery and growth
Nigeria's President, Muhammadu Buhari has presented the 2017 budget to the national assembly. He called it a budget of recovery and growth.
Wed, 14 Dec 2016 15:34:49 GMT
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AI Generated Summary
- The need for increased revenue and prudent financial management to steer the economy towards a surplus budget
- Importance of policy alignment and coherence across fiscal, monetary, and trade spheres to drive sustainable growth
- Call for a liberalized exchange rate, realistic revenue projections, and strategic fiscal policies to stimulate economic recovery
Nigeria's President, Muhammadu Buhari, recently presented the 2017 budget to the National Assembly, labeling it a budget of recovery and growth. To evaluate the budget and its implications, CNBC Africa hosted a panel discussion with several financial experts. The participants included Taiwo Oyedele, Partner and Head of Tax Regulatory Services at PricewaterhouseCoopers (PwC); Chika Mordi, CEO of the Nigerian Economic Summit Group (NCCN); Muda Yusuf, Director General of the Lagos Chamber of Commerce and Industry (LCCI); and Bismarck Rewane, CEO of Financial Derivatives Company Limited. The discussion shed light on various aspects of the budget, highlighting key points for consideration moving forward. Bismarck Rewane kicked off the discussion by emphasizing the need for increased revenue to fuel economic recovery. He noted that the budget projected a 30% growth in revenue and a 20% increase in expenditure, which indicated a move towards a surplus rather than a deficit budget. Rewane suggested that further spending might be necessary to effectively navigate the post-recession period, hinting at a possible supplementary budget in 2017. He highlighted the importance of managing debt service costs, which currently accounted for 35% of total independent revenues. High debt servicing could lead to sustained high-interest rates, potentially hampering economic growth. Rewane stressed the need for lower interest rates to stimulate economic activity and underscored the importance of a liberalized foreign exchange system for sustainable fiscal policies. Muda Yusuf echoed these sentiments, noting the budget's focus on capital expenditure over recurrent spending. He expressed concerns over the allocation of funds, particularly the high debt service burden and its impact on the economy. Yusuf emphasized the need for policy alignment across fiscal, monetary, and trade spheres to drive economic growth effectively. He called for a coherent strategy that addressed key policy areas to create a conducive environment for businesses and investors. Chika Mordi raised questions about the budget's revenue projections and policy coherence. She emphasized the importance of a liberalized exchange rate and harmonized policies to drive revenue growth and enhance economic stability. Mordi highlighted the need to boost disposable income and stimulate consumption to spur economic recovery. She cautioned against unrealistic assumptions, such as the projected oil production levels, calling for a more pragmatic approach to budget planning. The experts emphasized the importance of implementing sound fiscal policies that promote growth and sustainability. They called for a strategic approach to revenue generation, policy coherence, and prudent financial management to navigate Nigeria's economic challenges effectively. As the government moves forward with the budget implementation, addressing these key issues will be crucial to achieving the goals of recovery and growth outlined in the 2017 budget.