Onwuka Nzeshi
3 December 2008
Abuja — Mixed reactions have trailed the 2009 budget presented by President Umaru Musa Yar'Adua yesterday.
While some hailed the budget, saying the appropriation of 91 per cent of the capital vote to critical infrastructure was a welcome development, others criticised the assumptions and targets set by the government, saying they are unrealistic.
For instance, the Managing Director, Financial Derivatives Company Limited, Mr. Bismarck Rewane, told THISDAY last night that the assumptions that Nigeria would produce 2.292million bpd and that the nation's Gross Domestic Product (GDP) would grow 8.9 per cent were too optimistic given the crises in the Niger Delta and the global recession.
"The assumptions and targets are too optimistic given the global recession and constraints to growth. The growth target is just also too optimistic given the global recession. Also, the Organisation of Petroleum Exporting Countries (OPEC) is expected to reduce production and does it also mean that there would be no disruptions in the Niger Delta?" he asked.
Currently, Nigeria's average daily crude oil production is 2 million bpd due to the Niger Delta crises. The 2008 budget on the other hand, was based 2.45 million bpd, depicting a shortfall of 450, 000 bpd.
Besides, Rewane said the N88.5 billion devoted to power, which is one of the most critical sectors, was too small.
Noting that government intends to develop the power sector through Private Public Partnership (PPP), he emphasised that this might be pretty difficult given the global turmoil that has dried up credits and caused the developed countries several trillion of dollars to save their financial system.
The expert also noted that government failed to inform Nigerians the exchange rate it would base its earnings from oil on.
He said from his own calculation, it means that the exchange rate would be N116/$1, which he also described as too optimistic given the level of depreciation that hit the naira in the last one week.
The naira, which has lost N7.99 against the United States dollar at the inter-bank market, currently trades at N126.50: $1.
Similar remarks were made by a stockbroker and Chief Responsibility Officer of Value Investing Limited, Mr. Seye Adetunmbi, who stressed the need the government not to be too ambitious in its projections.
He noted that the current global financial crisis should be taken into consideration because Nigeria does not exist in isolation.
"Our projections should be moderate. The government should not be over ambitious with its targets. Projections should be done with some level of moderation," Adetunmbi said.
The Chief Executive Officer, Savvycorp Limited, Mr. Okechukwu Ezeh, also cautioned that "government needs to qualify our optimism, because the problem is not the budget but implementation."
He said the controversial power probe "is still fresh in our memory."
Noting that "all the huge sum appropriated is laudable", he asked: "At the end of the day; do we get value for money?"
But Senate President David Mark hailed the presentation of the budget, describing it as a ritual, which would have profound social, economic and political implications for the Nigerian economy.
He spoke at the opening of the joint Session of the National Assembly specially convened to receive the 2009 Appropriation Bill from Yar'Adua.
Mark, who led other distinguished senators to the green chamber of the House of Representative, venue of the budget presentation, said the mission of Yar Adua to the hallowed chambers of the National Assembly was a foremost constitutional imperative, which would go a long way in the attainment of the goals set out in the Seven Point Agenda of the present administration.
He said that the fiscal and monetary policies when properly articulated could serve as the road map of the national economy and steer the ship of state towards the shores of economic redemption, political stability and national prosperity.
He pledged the continued readiness of the National Assembly towards its constitutional responsibilities in terms of oversight functions in accordance with Section 88 of the 1999 Constitution.
This, Mark said, will entrench accountability, probity and transparency in public expenditure and eliminate the misuse or misapplication of public funds while ensuring strict adherence to timely implementation of the budget.
In the same vein Speaker, House of Representatives, Hon. Dimeji Bankole has described the Joint Session of the National Assembly and the presentation of the 2009 Budget as a symbol of democracy in Nigeria.
He said that due to the renewed vigour with which oversight functions have been carried out at the lower chamber of the National Assembly a number of breakthroughs have been achieved, stressing that huge funds, which were either misappropriated or illegally held in the vaults of some Ministries, departments and Agencies have been uncovered to the benefit of the national economy.
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