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2017 BUDGET: Kudos, knocks from industry executives

*Niger Deltans not happy with budget

*What matters is implementation—Onu

*FG should account for 2016 budget —Ikokwu

By Emma Amaize, Emeka Anaeto, Clifford Ndujihe, Jimitota Onoyume, Samuel Oyadongha, Gabriel Enogholase, Chioma Onuegbu,  Sebastine Obasi, Johnbosco Agbakwuru, Emmanuel Elebeke, Perez Brisibe &  Prince Okafor

LAGOS—As the National Assembly settle down to drill through the content of the 2017 Appropriation Bill submitted to it by President Mohammadu Buhari, many executives in the private sector have already seen reasons to worry about 2017 fiscal year though some expressed satisfaction with the budget.

Adjust figures to inflation, exchange rate —FSDH Bank

Speaking to Vanguard on his organisation’s perspectives on the budget, chief economist and head of research at FSDH Merchant Bank Limited, Mr. Ayodele Akinwunmi, noted first that when adjusted to inflation rate and current exchange rate the 2017 budget was not significantly bigger than 2016.

The 2017 budget, at N7.3 trillion total expenditure is about 20 per cent higher than N6.1 trillion budgeted for 2016. Inflation rate as at November 2016 was 18.5 per cent while the budge was based on Naira exchange rate of N305/ USD, about 35.4 per cent depreciation against the N197/ USD benchmark in 2016 budget.

However, Akinwunmi noted that “although the figures may not look great if you adjust it for the rising inflation rate and the current weak exchange rate compared with what these figures were last year, a few things stand out for me in the policy thrust that was rolled out during the budget presentation.”

Among the outstanding content of the budget according to him are, the abolition of the budget JV cash-calls in the funding of the upstream oil Joint Venture projects; the introduction of the tailor-made Public Private Partnership, PPP, Model for the funding of infrastructure in the country; continuation of the amnesty programme and the increase in the allocation for the programme; the diversification drive of the economy away from oil; and the supports that would be given to the non-oil sector particularly the SMEs to drive revenue and export earnings.

Others include, the tax credits to companies to boost exports, and the planned payment of the outstanding debt the FGN agencies owed to the electricity distribution companies (Discos).

President Muhammadu Buhari presenting the 2017 Budget before a joint session of the National Assembly on Wednesday, December 14, 2016.

Figures, assumptions inadequate— Cardinal Stone

Also speaking to Vanguard on how realistic the budget estimates and assumptions are, chief economist at CardinalStone Partners Limited, a Lagos based investment house, Tiffany Odugwe, stated: “Oil production at 2.2mbpd is largely dependent on the success of ongoing talks with the Niger Delta community. Even then, the assumption is largely optimistic as oil production has consistently underperformed budget estimates in the last three years.”

On the exchange rate benchmark, she stated: “We believe that the N305/US$ exchange rate assumption (about 50% stronger than the parallel market) signals that government holds no expectations of a further Naira depreciation in 2017. The assumption however aligns with reality and can also be described as conservative considering the very high possibility of a further Naira depreciation from N305/US$ in 2017.”

Electricity sector express caution

Stakeholders in the power sector have expressed cautious optimism over the N539 billion budget allocation for the Ministries of Power, Works and Housing announced by President Buhari.

Sunday Oduntan, Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors (Umbrella body of electricity distribution companies), said that though the government was committed to improvement in the sector, proper analysis could be made when actual allocation to the sector is known.

Also speaking,  General Manager, Internal Audit, Risk Management and Tax, North South Power Company Limited, Mr. Ikechukwu Okoli, said that, the provision in the budget for the outstanding bills from Ministries, Departments and Agencies, (MDAs) was a positive development which will provide some relief in the power industry.

His views were corroborated by Dr. Patrick Tolani, Chief Executive Officer, Community Energy Social Enterprise Limited, who believes the distribution companies need to boost their operations with more capital.

Also, reacting to the budget, Ag Head, Corporate Communication, Kano Electricity Distribution Plc, Mr. Sani Bala Sani, said that, “We hope this move to settle all outstanding debts yields the desired goal of infusing more liquidity into the power sector.”

Rep, Int’l NGO commend FG on health budget

Chairman, House of Representatives Committee on Health Services, Chike John Okafor and an International Non-Governmental Organisation, NGO,  ONE Campaign and Connected Development Initial, have commended the Federal Government over the increase in health sector allocation the 2017 budgetary.

Okafor specifically commended President Buhari for the interest in the Primary Healthcare Services, saying that the action would reduce the burden on the secondary and tertiary health institutions in the country as well as improve healthcare services in the rural areas.

Also speaking, Hamzat Lawal, Chief Executive of Connected Development and co-founder of Follow The Money said: “The 2017 budget presentation brings hope for citizens – mostly people in rural communities.”

FG should account for 2016 budget — Ikokwu

Reacting to the 2017 budget proposal and whether or not it could take Nigeria out of recession, Second Republic Politician and lawyer, Chief Guy Ikokwu, asked the Federal Government to tell Nigerians what it did with the 2016 N6.06 trillion budget before proceeding with that of 2017.

He also called for restructuring of the polity into fiscal federalism and elected officials to sacrifice 65 per cent of their salaries and entitlements, to move the country economically forward.

It depends on implementation not title—Onu

Also commenting on the budget, Chairman, Nigeria Association of Information Technology Enabled Outsourcing Companies, NAITEOC, David Onu said the title of the budget was good but must be seen to reflect in the content.

According to him, the problem of Nigerian budget lies in poor implementation over the years.

NDDC budget nothingto write home about — stakeholders

Stakeholders in the Niger Delta have flayed the budget provision for the Niger Delta Development Commission, NDDC, saying government should show serious commitment towards tackling challenges of underdevelopment in the region.

Executive Director Institute of Human Rights and Humanitarian Law, Mr Anyakwe Nsirimovu, said “In view of the problems we have in the Niger Delta, the polluted environment. The money earmarked for the region is not enough, it is nothing to write home about. It is like scratching the surface of the problem.

“If truly we need to tackle the problem of the region, government need to effectively fund interventionist agencies such as NDDC.”

Ledum Mittee, former President, Movement for the Survival of Ogoni People, MOSOP, said “Government should release money owed NDDC. Is this an increase or a decrease? NDDC has been owed so much money for years. Where is this NDDC budget coming from?

“I thought multinational oil companies were suppose to make contributions to the budget. The last time I checked the things provided for by the NDDC were mainly street lights for villages in Rivers State that do not have water, light. There have always been a mismatch between what the people need and what they get.”

Niger Delta leaders call budget, ‘Greek gift’

Stakeholders in the Niger Delta region, yesterday, described the 2017 budgetary provisions for the region as Greek gift, urging a jack of it.

However, leader of the Pan Niger Delta Forum, PANDEF, Chief Edwin Clark, was cautious, when contacted by one of our reporters on phone, saying he would want to get a copy of the budget and study the details before making comment.

President of the Ijaw Professionals Association, IPA, Homeland chapter, Mr Iniruo Wills, Edo rights activist, Mr. Anthony Erha and others, nevertheless, maintained that  the proposed budget for Niger Delta was a Greek gift to the region.

He said: “The amount will barely do one or two major roads across the coastal areas and it is about 10 percent or less of what the Federal Government is owing NDDC, and possibly less than the Federal Government’s statutory dues to NDDC for 2017 if we are to go by Federal Government’s own projected revenues and the funding prescriptions in the NDDC Act.”

“There is need for a coherent Niger Delta policy and development thrust. Different institutions (Amnesty Programme, Minister of Petroleum, Ministry of Niger Delta, etc) are coming up with knee-jerk interventions that are neither thought through nor coordinated with other stakeholders to ensure adequacy, maximum value for money, real impact and visible transformation.”

Niger Delta environmentalist, Mr Alagoa Morris, who added his voice from Bayesla State, said: “Well, the thing is that already,  some of us had the rare privilege to be  informed that the Federal Government is owing NDDC over N1 trillion that is meant for the development of the Niger Delta.  The Federal Government should offset that debt in addition to actually funding the Niger Delta Affairs Ministry.”

Spokesman, Ijaw Youth Council, IYC, worldwide, Mr. Eric Omare, stated:  “From the information I have, the N61b was budgeted for NDDC, while the Niger Delta Ministry got N33bn. In my view while the proposals may be a slight improvement on the 2016 budget, it is grossly inadequate considering the contribution of the region to the nation and the enormous challenge in developing the region.”








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