Business
FG urged to make alternative provision for proposed non-oil revenue
By Chioma Obinagwam
The Federal Government of Nigeria has been advised to make alternative provision for the Non-oil revenue in its 2016 budget which is pegged at N1.45 trillion.
Financial experts expressed fears over the inability of the FG in achieving its projections with regards to the Non-oil revenue going by the attendant macro-economic variables plunging the economy.
Ode Ojowu, a former Chief Executive of the National Planning Commission is skeptical of the feasibility of the non-oil revenue sources of the government; stating the importance of making alternative provisions for it in case it is unrealisable.
“We’re going to end this year with N2 trillion deficits. Is the Non-oil revenue of about N1.45 trillion realisable. If not, do we have any provisions to make-up for it. This could increase our debt ratio to 40 per cent.
The stabilisation fund is about $200m. Surplus from excess crude is about $1 million. How does the minister hope to fund the Sovereign wealth fund to ensure that we have enough buffers when we have another downturn in oil.
The former economic adviser doubts the capacity of the government to raise revenue.
“I have my doubts of the capacity of the system to sponsor the projects within a short period of time also given thee numerous distractions from civil unrests, among others,” he said.
Ojowu advised the government to throw its weight on ensuring that people at the lower rung get the required funding.
“If we’re going to get the economy right, we must begin to spend on people on the lower rung of the lather. The Central Bank of Nigeria (CBN) is struggling to make funds available in the economy, like in the banks,” he noted.
“They should create policies that’ll enable those that are down the line to get funding at very cheap rate,” he continued.
According to Tilewa Adebajo, a financial expert, increasing taxes is not a good option because it would discourage investments.
“The problem with Nigeria is that they want to do the right thing at the wrong time. It would have been easier for the government to increase taxes when the economy was booming and companies where making profit,” he noted.
“Let us look at corporate earnings for last year, most companies performed lower than the previous years. If you want to stimulate the economy increasing taxes, you will discourage the little investments already existing in the country,” he added.
In terms of social programmes, he is of the opinion that government should focus more on resettling and empowering the Internally Displaced Persons(IDP)
“My concern is the Internally Displaced Persons(IDP). Why don’t you use the funds to resettle these people? If we spend the N5000 on the unemployed how do we account for it because ghost persons would most likely spring up,” he argued.
Tilewa said: “instead of helping people to manage poverty by giving them N5000. I advocate that we resettle them and create investments.”
He advised that government should focus on investment; adding that there has been huge capital flight in recent times.
“Another point is investment. We have about 50 per cent loss in (FDIs) to about $4 billion from $9billion,” he added.
Recall that President Muhammadu Buhari had in December presented a N6.08 trillion budget to the National Assembly.
It should be noted that oil prices has recently fallen to as low as $27 per barrel in the global where as the budget was benchmarked at $38 per barrel and a production estimate of 2.2 million barrels per day for 2016.