Nigeria’s N8.83 trillion Federal budget for the 2019 fiscal year may not be able to achieve its expected outcome due to uncertainties related to the projected production capacity and price of crude.
This is the opinion of Alhaji Razaq Jaiyeola, President of the Institute of Chartered Accountants of Nigeria (ICAN).
Alhaji Jaiyeola expressed this opinion to journalists in Abuja, Tuesday night, on the sidelines of the inauguration of ICAN’s official journal. According to him, the Government’s projections for crude, which generates much of the country’s foreign exchange, is ambitious and unrealistic.
While affirming that the current administration has, supposedly, stirred the country’s economy aright, the ICAN boss insisted that there is something problematic about the 2019 budget. As such, it needs improvement.
“Government has tried to steer the economy aright. We went into a recession and we are now out of it. But the impact of being out of a recession is not really felt by the populace.
“I have a problem with the projection in the budget as regards the volume of crude oil that will be produced. The budget is putting it at 2.3 million barrels per day, which in my opinion is very, very ambitious given the various parameters which one should normally consider before taking such a decision.”– Jaiyeola
Recall that President Muhammadu Buhari presented the 2019 appropriation bill last December during a joint session of the National Assembly. The budget is N300 billion less than the N9.1 trillion budget that was implemented in 2018.
As always, funding for this year’s budget is expected to be derived from crude earnings. And the Government had projected that the country would produce an estimated 2.3 million barrels of crude every day and at an exchange rate of N305.
So, what exactly is Alhaji Jaiyeola’s problem with this budget?
The ICAN boss believes the Federal Government has failed to be conservative with its projections for 2019 budget. As a result, said projections are simply unrealistic.
“For the oil price that was used, I also believe that they (government) have not been too conservative about it. There’s going to be a problem in achieving the price that has been used.
“Overall, even with the rate of the growth of the GDP, what has been projected given the 1.9 figure that has been achieved before, I believe that what has been projected in the budget is also on the high side.
“So, I think we should be more conservative in our budget and I’ll say that the budget is not likely to achieve what has been targeted.”