Two financial experts in Lagos said that the delay in passing the 2018 Budget could undermine the effective implementation of the Economic Recovery and Growth Plan (ERGP).
The experts, said that the delay in passage by the National Assembly, could hinder implementation of projects critical to economic diversification.
Dr Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University, Keffi, said that the Budget of Consolidation was developed in line with the Federal Government’s ERGP designed to make the economy more diversified.
According to him, the delay disrupts budget assumptions and renders unrealistic, targets such as the gross domestic product growth of 3.5 per cent.
He said that planned investments in agriculture and infrastructure, in particular, could be hampered, adding that the delay could also hinder job creation.
“This development does not augur well for the stock market, as share prices of firms in the agriculture sector, industrial goods sector and construction sector will be worst hit,” Uwaleke said.
According to Uwaleke, the delay can also adversely affect timely payment of contractors and increase the chances of non-performing loans in banks which will negatively affect their share values.
“If the delay drags on for too long, it can heighten uncertainty in the market.
“It has the potential to scare away foreign investors whose presence is being felt now due to the current investors’ confidence in the country’s economy following recovery in crude oil price,” Uwaleke said.
Sheriffdeen Tella, Professor of Economics, Olabisi Onabanjo University Ago-Iwoye, Ogun, said that the delay in passing the budget, in spite its early submission by the executive, exposed the legislature indicated from the onset that it was not in hurry to consider and approve the budget.
“From December 2017, those who are directly in charge of the budget consideration had told the public that serious work would not commence until 2018.
“The position was not helped by the bureaucratic personnel who did not appear before the National Assembly Committee as and when scheduled,’’ he said.
The budget would positively impact on the economy just coming out of recession and needed injection of funds to accelerate the recovery process.
Tella said that uncertainty of the past weeks in the stock market might continue until the passage of the budget.
He noted that activities in the capital market were often influenced by fiscal policies and activities of government and the Central Bank of Nigeria.
Reports stated that President Muhammadu Buhari on November 7, 2017, presented the 2018 Budget of N8.612 trillion to a joint session of the National Assembly.
The President said at the presentation that the budget would drive rapid economic recovery.
The President said that, with a benchmark of 45 dollars per barrel of crude oil at an exchange rate of N305 to a dollar in 2018, the budget would consolidate on the achievements of previous budgets to aggressively steer the economy to the path of steady growth.