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Revised budget would not stimulate, grow economy, say valuers

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Emmanuel Okas Wike, NIESV President

Land economists have reiterated their position that the revised 2020 budget of N10.8 trillion, would not adequately stimulate, grow all sectors of the economy, and may likely impact the real estate sector adversely.

The Nigerian Institution of Estate Surveyors and Valuers (NIESV) hinged its claims on the low sectoral allocation to development fund for capital expenditure in a public sector, high level of government debt profile, comparatively low allocation for the health, housing sectors and the funding strategy.

The revised budget as contained in the Appropriation Act (Amendment) Bill 2020 is in the sum of N10.8 trillion, which is N216 billion more than the revised budget plan that was originally submitted by the Executive to the National Assembly.

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The appropriation expenditure heading is now made up of N2.5 trillion representing 23 per cent of the budget for capital expenditure, non-debt Recurrent of N4.94 trillion (46per cent), debt service at N2.95 trillion representing (27per cent) and statutory transfers at N428 billion, representing four per cent of the total appropriation.

In the appropriation breakdown the sum of N265.5 billion is allocated to Works and Housing ministry, a maximum budget sum of N60.87 billion being 22.8 per cent of the ministry’s capital budget allocation and 2.4 per cent of the national capital budget was allocated to housing under the erstwhile National Housing Programme in the 36 States of the Federation and the Federal Capital Territory Abuja.

In its position paper, ‘2020 Revised National Budget and its effect on Estate Surveying and Valuation Profession’, the institution said that a budget meant to sustain and steer the economy away from recession through developmental growth and job creation cannot afford to neglect housing as a major economic driver.

The document, prepared by the 23-member presidential advisory committee, established by NIESV president, Sir Emmanuel Wike noted that housing is the bedrock of the economy and a veritable catalyst for employment, income generation and economic growth.

According to the body, infrastructural development is a key indicator for real estate investment market. The percentage sectoral allocation to development fund for capital expenditure is 23 per cent while recurrent expenditure (debt and non-debt) is 73 per cent.

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This huge gap between allocations for capital expenditure and recurrent expenditure will have adverse effect on infrastructural development, which is the bedrock of economic stimulation for the private sector.

Consequently, NIESV advocated better funding and better synergy, collaborations and partnerships between the government, the private sectors and the appropriate professional inputs of built industry in the subsequent budgeting, monitoring and the implementation of housing policies and programmes.

While calling for the review of the capital budget for housing and funding model, the institution wants to be involved in all the delivery stages of the national and social housing schemes.

“Housing sector has the potential to generate employment, increase productivity, raise the standards of living, improves social security, alleviate poverty and improve health benefits and it remains the only way out of the present economic challenges.

“The government needs to substantially increase the investments in housing, infrastructure development and provide better enabling environment for the housing sectors to thrive, being the bedrocks of the economy and considering its importance as tools for stimulating the expected growths,’’ the valuers added.

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In this article:
NIESVSir Emmanuel Wike
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