Experts doubt realisation of 2015 budget, Urge FG to ensure strict implementation

Financial experts on Thursday said pegging of 2015 budget at $65 per barrel might not be realistic in view of the persistent fall of oil price in the international market.
They told the News Agency of Nigeria (NAN) in Lagos that pegging the benchmark above the current oil price of $60 was not good for the nation’s economy.
They therefore urged the Federal Government to ensure strict implementation of all measures being put in place in the 2015 budget proposal to stabilise the economy.
Finance Minister and Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala, had on December 17, presented N4.36 trillion 2015 budget to the National Assembly.
Okonjo-Iweala said that the budget was cut by N357 billion over the 2014 version.
She said that the budget was aimed at diversifying the economy in 2015 with more focus on tax revenue.
The minister said that a 10 per cent surcharge on private jets, luxury goods, wines and spirits would take effect from the next fiscal year, among others.
She said a 39 per cent surcharge on luxury yachts and five per cent on cars estimated to raise N1.6 billion and N2.6 billion respectively would be placed on luxury goods to discourage import.
A renowned economist, Pat Utomi, said the 2015 budget was peculiar with oil benchmark pegged above the current oil price.

Utomi said the Federal Government should be realistic with the developments in the international market.
He said government should be faithful in ensuring strict implementation of the budget, adding that ‘budget process in Nigeria had remained unserious.”
Utomi said there was need for serious diversification of the nation’s economy.
“We have not seriously pursued diversification of the country’s economic base; the earlier we do that, the better for us,” Utomi said.
He urged the Federal Government to provide the needed incentives for economic diversification, saying “power is a major challenge to economic growth and development.”
“Nigeria is one of the most difficult places to do business because of greed and corruption, politicians and bureaucrats,” he stated.
Also, Femi Adebiyi, the pioneer Director, Enterprise Promotions, the Small and Medium Scale Enterprises Development Agency (SMEDAN), decried high amount of fund allotted to the recurrent expenditure in the budget.
Adebiyi said that the country would not experience any meaningful development without drastic reduction in the recurrent expenditure and government spending.
He said that the Federal Government should cut down on its spending in line with the recent realities in the global markets and the nation’s economy.
Adebiyi said that the government at all levels should reduce their governance expenditure to reflect the present realities in the economy.
He said the major problem affecting the nation’s growth and development is excess government expenditure caused by political appointees.
Adebiyi urged government to reduce the domestic borrowing in 2015 for growth and development of the real sector.
The stakeholders called on government to cut down allocation to payment of subsidy on kerosene, saying it would go a long way to save money for other critical areas of the economy.
The President, Nigeria Liquefied Gas Association, Dayo Adeshina, said that money saved from the payment of subsidy on kerosene should be used to develop the gas industry to replace kerosene infrastructure.
Adeshina said government should encourage manufacturers by encouraging low interest rates for the small and medium scale enterprises.
He noted that with the continued fall of oil prices, Nigerians would face tougher challenges in 2105.
“The way oil prices have gone down, it is going to be a tougher year in 2015; the revenue will have gone down significantly,’’ he stated.
He said that government must come up with some incentives to encourage investors to invest locally, maintaining that until power is stable in the country, the cost of manufacturing would remain very high.
Adeshina stressed that government should have enough fund to cushion the $65 oil benchmark even when it fell below the proposed benchmark.
“I hope they have made efforts to cushion that forecast if the price falls lower than what they are predicating the benchmark on,” stated.
He also said that generally, there was a need for government to cut down on its expenditure.
Uche Okoro, Personal Assistant to the Chairman, Nigerian Electricity Regulatory Commission (NERC) on Research and Strategy, said the 2015 budget estimates would encourage local manufacturing as government was shifting from oil revenue to non-oil revenue.
He said the measures adopted by government would encourage local manufacturing as more energy would be produced and targeted at industrial base of the country.
“We are very optimistic about the 2015 budget proposal as it is geared towards economic growth of the country,” he said.
The aggregate budget revenue for 2015 is N3.6 trillion, comprising oil revenues of N1.918 and non-oil revenues of N1.684 trillion to fund an aggregate budget of N4.3 trillion proposed for 2015.