The Director-General, Lagos Chamber of Commerce and Industry (LCCI), Mr Muda Yusuf, on Wednesday commended the Federal Government’s efforts in reviewing the nation’s foreign exchange policy.
Yusuf gave the commendation in an interview with newsmen in Lagos, against the backdrop of the 2016 Budget presented on Tuesday by President Muhammadu Buhari.
Buhari said in his budget speech that government was carefully assessing the exchange rate regime, keeping in mind its willingness to attract foreign investors.
He said this was in view of problems many Nigerians have in accessing foreign exchange.
The President mentioned traders, business operators, manufacturers, airlines operators and financial services sector and capital markets as some of those in need of the foreign exchange.
Buhari observed inadequacies in the supply of foreign exchange to Nigerians who need it and said the Governor of Central Bank of Nigeria (CBN) was fine-tuning the foreign exchange management.
The LCCI director-general said that the increase in capital expenditure from N557 billion in the 2015 budget to N1.8 trillion in 2016, representing 30 per cent of the total budget was also commendable.
According to him, the increase in the capital expenditure is likely to be committed to infrastructure for investments to thrive.
Yusuf said that a benchmark price of 38 dollars per barrel of oil for 2016 budget could still be reviewed by the government following the dwindling oil price at the international market.
The proposed budget of N6.08 trillion has a revenue projection of N3.86 trillion resulting in a deficit of N2.22 trillion and equivalent to 2.16 per cent of Nigeria’s Gross Domestic Products (GDP).
This makes the nation’s overall debt profile to stand at 14 per cent of the GDP and to be financed by a combination of domestic borrowing of N984 billion and foreign borrowing of N900 billion, totaling N1.84 trillion.
The director-general advised that government should watch its cost of debt servicing, saying that such borrowings should be used for capital projects to boost productivity.
Yusuf advised government to focus more on infrastructure development.
Dr Samuel Nzekwe, a former President of the Association of National Accountants of Nigeria (ANAN), also advised the Federal Government to ensure that the 2016 budget would be cash-backed.
Nzekwe said that not having cash to back the budget and the government not being able to determine when exactly some capital projects would be achieved, were challenges in the past.
“In the past, we have always had a challenge of bloated budgets and we believe that this will not be repeated in this present regime.
“The performance of the budget has to be perfect in such a way that there will not be avenue for leakages,’’ he said.
Nzekwe also said that a cash-backed budget would enable the government to be focused, adding that the idea of borrowing to finance some aspects of the budget was a welcome idea.