…Says exchange rate benchmark unrealistic
By Michael Eboh
Professor of Finance and Capital Market of the Nasarawa State University, Keffi, Uche Uwaleke, has faulted the Federal Government’s allocation of about N2 trillion for capital expenditure in the 2021 budget, describing it as worrisome.
In his reaction to Federal Executive Council’s, FEC, approval of the budget proposal of N13.08 trillion for the 2021 fiscal year, Uwaleke, who is also former Commissioner of Finance of Imo State, however, commended the government for the timely preparation and planned early submission to the National Assembly.
He further noted that the exchange rate benchmark of N379 to a dollar was not realistic, stating that it would be difficult to achieve following attempts by the Central Bank of Nigeria, CBN, to unify all the various windows of the country’s foreign exchange market.
Uwaleke also called on the National Assembly to take critical look at the budget and give priority to developmental aspects of the country.
He said: “I commend the Executive arm for submitting the budget proposal in good time, that allows the National Assembly sufficient period to consider and pass the Appropriation Bill.
“I think the assumptions and budget parameters are realistic except for the exchange rate that may not hold due to the on-going process of unifying exchange rates across all foreign exchange windows by the CBN consistent with the International Monetary Fund, IMF, prescription.
“I must add, however, that the sum of slightly above N2 trillion allocated to capital expenditure out of a total budget size of over N13 trillion is quite disproportionate.
“Secondly, if the projected budget deficit is over N4 trillion against a capital spend of about N2 trillion. It means part of the money to be borrowed to finance the deficit is going into consumption.
“This is worrisome and so I expect the National Assembly to take a close look at these critical budget areas with a view to ensuring that the developmental aspects of the budget receive priority attention.”