Nigeria Senate finally passes 2018 budget

Nigeria's Senate and House of Representatives have finally passed the country's 9.1 trillion naira 2018 Appropriation Bill after a series of delays and setbacks. Winston Osuchukwu, CEO of First Ally Asset Management, joined CNBC Africa to provide insight into the details of the budget. However, Osuchukwu expressed his critical views on the budget, highlighting significant flaws and challenges that the budget faces. One of Osuchukwu's main concerns was the timing of the budget passage, which he described as 'six months late.' This delay raises doubts about the full implementation of the budget, especially considering that it does not include one trillion dollars spent on subsidies. The absence of such a significant expense in the budget casts a shadow on the accuracy and reliability of the budget figures. Additionally, Osuchukwu pointed out that the increase in the benchmark price of crude oil, based on recent market trends, is a risky move. The uncertainty surrounding the price of crude oil, particularly in light of geopolitical factors such as the Iran-US nuclear deal, poses a threat to the budget's stability. Moreover, Osuchukwu questioned the logic behind increasing the benchmark budget due to rising oil prices, as this increase is not guaranteed to be sustained. He emphasized the volatility of the oil market, where shifts can occur rapidly and significantly impact pricing. The CEO warned that a potential return of Iran to the oil market, facilitated by the EU's efforts to allow European countries to trade with Iran, could lead to a sharp decline in oil prices. This scenario would undermine the current assumptions of the budget and create additional challenges for Nigeria's fiscal planning. The budget passage process itself was marred by inefficiencies and lack of accountability, as some officials from the MDAs failed to defend their budget proposals before the House. This lack of engagement and transparency reflects a broader issue of discipline and rigor within the budgeting process in Nigeria. Osuchukwu criticized the failure of leadership in ensuring that all relevant stakeholders participate in budget discussions, highlighting the need for accountability and commitment to fiscal responsibility. Looking ahead, Osuchukwu expressed cautious optimism about the timely implementation of the budget, given the presidency's prompt submission of the budget in November. However, he emphasized the importance of officials defending their budget allocations and warned against further delays or disruptions in the budget execution process. Ultimately, Osuchukwu's assessment of Nigeria's 2018 budget highlighted the pressing need for greater discipline, transparency, and long-term strategic planning in the country's fiscal management.