Passage of 2016 budget will boost investors’ confidence, says LCCI
The Lagos Chamber of Commerce and Industry (LCCI), has lauded the passage of the 2016 budget into law, describing it as a good development for the private sector.
The Director-General of the chamber, Muda Yusuf, told the News Agency of Nigeria (NAN) that the elements of uncertainty created by the non-passage of the budget had been removed.
“It is good news for the private sector because it will boost investors’ confidence in the country’s economy.“The country will begin to see positive developments in economic activities,” Yusuf said.President Muhammadu Buhari, on May 6, signed the N6.06 trillion budget into law.
The President had withheld his assent for weeks due to the controversy surrounding the budget proposal he submitted to the joint sitting of the National Assembly on Dec. 22, 2015.
Yusuf said the N350 billion that the Finance Minister, Mrs Kemi Adeosun, promised to inject into the system immediately after the assent would stimulate the economy.
“The injected fund will improve consumer spending, cash flow, economic activities and also create more jobs.”The Minister of Works, Power and Housing, Babatunde Fashola, said he has not been able to embark on any capital project in the area of infrastructure because the budget had not been signed.
“We hope that the infrastructure development that we have been expecting will start now.”The government is also owing some contractors and we hope that with the signing of the budget, they will be paid soon,’’ he said.
Yusuf said the school feeding programme to be funded with the social intervention funds would have significant multiplier effects on the agriculture value chain.
He said the support for micro enterprises through micro credit schemes would create jobs and encourage entrepreneurial skills among the citizens.
Yusuf also called for better communication between the National Assembly and the executive on budget issues to eradicate controversy that might forestall future approvals.
“Good communication will promote budget passage because timing is critical to implementation,’’ he said.Yusuf said unrealistic assumptions on revenue and projects to be embarked upon might threaten the effective implementation of the budget.
“We need to match our resources with our expenditure plan. If the budget is loaded with much projects that the resources cannot support, it may create problem of sustainability.
“For instance, the revenue expectations from the Nigerian Customs Service is not reliable because Customs revenue depends largely on imports.
“Besides, importation has declined because of the prevailing economic conditions and this has resulted to the shortfall in the customs’ revenue target for the year.
“Also, the assumption of oil output put at 2.2 million barrels per day, given what is happening in the Niger Delta region and other security issues, may affect that assumption.”These assumptions put the budget at risk and might affect how far the budget can be implemented,’’ he said.
He urged the government to review the bureaucracy in the award of contracts and release of funds to contractors.”There should be a way to accelerate the process without compromising the integrity of the process,’’ he added.He stressed that government should ensure proper appraisal of contracts and monitoring of such projects.
Get the latest news delivered straight to your inbox every day of the week. Stay informed with the Guardian’s leading coverage of Nigerian and world news, business, technology and sports.