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Analysts lament delayed 2014 budget

By on May 13, 2014

With less than seven months to the end of 2014, experts have continued to express concern over the delay in signing this year’s appropriation bill into law.

They noted that the budget tagged: “Budget for Jobs and Inclusive Growth,” has lost out valuable implementation time like previous budgets.

Pan-African rating agency, Augusto & Co, stated this in a report titled: “Can Budget 2014 Correct Nigeria’s Jobless Growth?” obtained at the weekend.

The National Assembly had passed a figure of N4.695 trillion as 2014 Budget before proceeding on Easter break last month, whereas the executive proposed N4.643 trillion.

In addition, there was divergent in the crude oil benchmark. For instance, while the Senate raised the oil benchmark from $74 per barrel to $76.50 per barrel, the House of Representatives passed the budget with a crude oil benchmark of $79.

But Augusto & Co noted: “If Nigeria’s fiscal budget was an item on the shelf of a mart, it would probably have a reading on the package—‘best before: 31-Dec-2014.’

“Even after a month of passing the 2014 appropriation bill, the budget is yet to become an Act of Parliament; because it awaits presidential assent.”

Agusto & Co in its review of the 2014 appropriation bill expressed concern that its process did not consolidate on some of the successes of Budget 2013 especially on timeliness.

It pointed out that the “first fundamental drawback of Budget 2014 is the undue delay of the process,” adding that “at current progress levels, we fear that Budget 2014 could become a half year budget.”

According to the Lagos-based rating agency, the other significant drawback to the proposed 2014 budget is the increase in recurrent expenditure, which it noted crossed the 70 per cent threshold after dropping to 67.5 per cent the previous year.
Furthermore, it pointed out that the document reflects the dire need to diversify government’s income.

“Government revenue in Budget 2014 is expected to drop by six per cent from 2013 due to factors such as the depletion of the Excess Crude Account (ECA) and the uncertainty around Nigeria’s crude oil supplies.

“The ECA recorded a year-on-year decline of about 80 per cent to $2.07 billion in February 2014 from $10.42 billion in February 2013.  Rising oil output from producers such as Canada, the anticipated increase in output from South-east Asia as well as the growth in shale oil production by Nigeria’s former major oil consumer, United States, is expected to change the market dynamics of crude oil.

“At the same time, generous tax waivers have led to a fall in corporate taxes, customs and excise duties accruable to the government. These developments further highlight the need for government to diversify income streams beyond crude oil earnings and exploit other burgeoning sectors as reflected by the rebased GDP figures,” it stated.

It noted that the new GDP figures indicates that Nigeria’s economy is more diversified than earlier thought but government’s earning capacity still lags behind.
However, Agusto & Co argued that the naira would be exposed to significant pressures this year.

 

[This Day]