Mr Ona Ohimor, an economic analyst has said that the major challenge of the proposed 2017 budget is the nation’s inability to fully fund it.
He told the News Agency of Nigeria (NAN) on Thursday in Abuja that the proposed N2.32 trillion to be borrowed both internationally and domestically was a source of concern.
Ohimor was reacting to the N7.29 trillion budget presented to the joint session of the National Assembly by President Muhammadu Buhari on Wednesday.
Details presented by the President showed that N1.06 trillion or about 46 per cent would be borrowed from external sources while, N1.25 trillion would be borrowed from the domestic market.
Ohimor said that Nigeria’s indebtedness and the continuous massive increase in loans to fund budgets was a major issue.
According to him, this is so because already, a lot is being used to service loans, yet the nation is still borrowing so much.
“The massive increase in borrowing is an issue, already, contractors are not being paid and we are borrowing more.’’
He also said that tackling the Niger Delta crisis to be able to achieve the 2.2 million barrels per day projected would go a long way in helping fund the budget.
According to him, the crisis will determine whether or not the budget will pull the Nigerian economy out of recession or further deepen it.
“Now we have a bigger estimate of N7.2 trillion, but the issue is will it actually be delivered and for now the issue is how the government will fund the budget.’’
He, however, said that there were a number of positive sides to the budget which showed that the government had learnt from the mistakes of past years.
“The benchmark for crude oil is more realistic, better and the exchange rate too is better and these are positives.
“The increase in capital expenditure is also a positive development because we need investment in infrastructure to stimulate the economy,’’
The proposed N7.29 trillion 2017 Appropriation Bill is predicated on a benchmark crude oil price of 42.5 dollars per barrel, an oil production estimate of 2.2 million barrels per day and an exchange rate of N305 per dollar.