Experts x-ray options for 2016 budget in dilemma

Experts have called for discipline in the implementation of the 2016 budget as the National Assembly begin the task of considering the proposals seen as one of the most controversial in recent years.

Poor implementation has continued to plague the budget put forward by the political elite since the Abacha regime says Patrick Utomi, Founder of the Centre for Values in Leadership

Speaking at Deloitte’s Sectorial Review of the 2016 Nigerian budget, Utomi stressed that Government ought to cultivate the discipline required for the successful implementation of the budget, stating that the implementation process is most crucial and decisive in impacting the economy.

He added that there was a need to review the budget to reflect the volatile oil price as opposed to the benchmark of 38dpb used in preparing the budget following what he observed as a disconnect between the government and the current economic reality that have failed to take the budget deficit into proper consideration.

‘’2015 was a rough year but 2016 will be a tough year’’ were the words of Bismark Rewane, CEO of the Financial Derivatives Company. For admirers of Tai Solarin, this may be a welcomed improvement but not necessarily so for the average Nigerian.

Commenting on the pressure on the CBN Governor to devalue the naira Rewane said, ‘’100-1 dollar is what is good to have, somewhere between 220-230 is what we need to have’’.

Devaluing the naira arguably has a fair share of pros and cons. But the cons may outweigh the pros for a country that is import dependent.

A leeway lies in export promotion if the pros of the naira devaluation are to outweigh or compete desperately with the cons.

With Government’s estimated generation of N1.4 trillion from non-oil revenue, an increase in the exportation of agricultural commodities is anticipated. There’s huge potential for Nigeria in the export of agricultural commodities and one commodity that can perform optimally in exportation is Cassava according to Paul Gbedebo, Managing Director, Flour Mills of Nigeria Plc.

Gbedebo, also speaking at the Deloitte Sectorial Review of the 2016 budget, identified the opportunities in Nigeria’s exportation of cassava leveraging on being its largest producer. His speech was insightful on how Thailand, the commodity’s 2^nd largest producer leveraged on it juxtaposing it with Nigeria’s failure to exploit the commodity.

In expressing his concern on the challenges the agricultural sector grapples with, he said, ‘’Government is looking to diversify the economy, but where is the infrastructure for that? We don’t have roads. Industries are not linked to farms.’’ He spoke further in addressing the role government must play if it is to find a contingency plan in the agricultural sector for the ailing oil sector.

These roles according to Gbedebo include encouragement of agricultural commodities export resulting in the increase of their foreign exchange earnings; support of private investment in storage facilities to bring the loss of agricultural produce as a result of poor storage to the barest minimum; building necessary infrastructure to stimulate the performance of the sector and finally the urgent review of the land use act with the implication of encouraging land ownership.

For the first time in decades the non-oil sector is projected to account for more Government revenue at N1.45 trillion as opposed to the oil sector’s projected revenue of N820 billion. Alongside agriculture, another sector expected to drive the projected non-oil revenue is the tax and regulatory sector.

According to Yomi Olugbenro (Partner, Tax and Regulatory services, Deloitte Nigeria), ‘’Tax optimization should take focus rather than tax maximization”. Olugbenro expressed his confidence in tax revenue being up to the task in contributing significantly to the projected non-oil revenue for 2016 stating that if strict compliance to tax payment was observed by Nigerians tax revenue could suffice for the non oil projected revenue.

He spoke further, buttressing that his confidence in tax revenue’s ability to suffice for its projected revenue was in his knowledge of countries that run solely on tax revenues.

Like previous years, the onus lies once again on the country’s leadership to be at the forefront in driving the much desired change by being accountable to the citizenry as regards to its estimated budget which if well implemented could yield good fruits for their labour.

The transportation, agricultural and housing sectors in the face of their challenges in infrastructural deficit could be a safety net for the projected massive retrenchment in the oil sector which will only be responding to the oil glut and its price hovering around break-even cost for oil companies.

Babatunde Fashola, the Minister of Power, Works and Housing, in his experience as the Lagos State Governor admitted the enormous opportunity in the housing sector to positively impact the economy to promote growth and inclusion. In his statistical analysis, on every hectare of land where it is possible to build 8-10 blocks of houses, at least 1000 people got employed.

What this portends for estate surveyors, architects, engineers, masons, plumbers, electricians and even lawyers is employment opportunities roughly quantified in five hundred millions given the current 17million housing deficit in the country.

 

LOLADE AKINMURELE