By Nkiruka Nnorom
With the kick-start of 2017 budget implementation, the Lead Partner, Deloitte West Africa, Mr. Yomi Olugbenro, has called on the Federal Government to take step to increase capital expenditure to a minimum of 50 per cent of aggregate expenditure in the national budget.
He also called on the FG to raise the non-oil tax revenue, saying that it will determine the degree of implementation of the 2017 budget.
He spoke at the Standard Chartered Bank clients engagement forum themed: “The Nigerian Budget & Fiscal Focus 2017: Overview of Budget, Economic Recovery & Growth Plan and National Tax Policy”, in Lagos, saying that current level of non-oil revenue remained low and unable to galvanise desired developments.
“While there is noticeable alignment between the federal government budget and the economic recovery and growth plan, full implementation of capital project is critical to achieving desired developments and recovery. The current level of revenues remains low and unable to galvanize desired developments. Sustained effort is, therefore, required to raise non-oil tax revenue as borrowing comes with attendant costs.
“Debt to GDP ratio appears decent in principle, but low level of revenues means about one third of revenue is spent on debt servicing. That is a major concern, especially with our history of waste and application of borrowings. We must also curtail the level of recurrent expenditure currently at 70 per cent and steadily raise capital expenditure to a minimum of 50 per cent of aggregate expenditure,” he said.
He noted that the 2017 budget is capable of catalysing the anticipated economic recovery and as envisaged in the Economic Recovery and Growth Plan, ERGP, adding that allocations to works, power, housing and transport was an indication of serious intention by the government to pursue infrastructure development.