Some financial experts on Thursday said the proposed 2019 budget was unrealistic due to its questionable assumptions in view of the current economic realities in the country.
The experts disclosed this in separate interviews with the News Agency of Nigeria (NAN) in Lagos, while reacting to N8.83 trillion budget for 2019 presented by President Muhammadu Buhari to the joint National Assembly.
Malam Garba Kurfi, the Managing Director, APT Securities and Funds Ltd., said the assumption of crude oil production of 2.3mbpd against the current production of 1.8 million barrels per day was on the high side.
Kurfi said the decision of OPEC to cut oil production by 1.2 million barrels per day from January 2019 for an initial period of six months should be a source of concern to Nigeria.
According to him, the price of crude oil at 60 dollars per barrel is also on the high side in view of the current oil price at the global market.
“The capital expenditure, reduced from 30 per cent to less than 25 per cent, is not good enough when compared with infrastructural deficit of the country,” he said.
Kurfi said allocating about 25 per cent or N2.14 trillion for debt servicing was taking the country to the old days before the country’s debts were cleared.
Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said the timing of the budget was very late considering what budget delay and passage had done to the economy.
Omordion also said the size of the budget, which reflected the expected low income from the major source of revenue of the government, oil, would increase unemployment and poverty in 2019.
He also said the oil price benchmark of 60 dollars per barrel was very high due to expected supply cut from January by OPEC.
According to Omordion, pegging inflation figure at 9.9 per cent is unrealistic, noting that the possibility of single digit is high considering the expected implementation of new minimum wage.
NAN reports that Buhari presented a N8.83 trillion budget for 2019 before the joint sitting of the National Assembly.
The fiscal plan for next year is smaller compared with N9.12 trillion budgeted for 2018.
The proposed budget shows that about a quarter of the sum, N2.14 trillion naira will be spent on debt servicing, while capital expenditure is expected to gulp N2.03 trillion.
Government also intends to spend N4.04 trillion naira on recurrent expenditure and N492.36 billion naira on statutory transfer in the course of 2019 fiscal year.
The fiscal policy is predicated on crude production of 2.3 million barrels a day, an oil price of 60 dollars per barrel and an exchange rate of N305 to the dollar.