Chinwendu Obienyi
Following recent tax initiatives geared towards generating revenue by the Federal Government, Afrinvest, has projected that Nigeria’s revenue would dip by 44 per cent in 2020.
Speaking to newsmen during the launch of its Economic Review and Outlook in Lagos at the weekend, the Group Managing Director, Afrinvest West Africa Limited, Ike Chioke, noted that the country’s budget suffered troubling implementation trend in 2019 which resulted in revenue underperforming by around 40 per cent.
Chioke explained that as a result, the Federal Government had to borrow more than it intended to even as actual deficit was N3.4 trillion against N1.9 trillion, adding that capex implementation suffered as a result of overly ambitious revenue potentials.
According to him, the current worry of the 2020 budget is on the trend of current expenditure while the major driver of the current budget is on the minimum wage that was recently passed and will be implemented in this year.
He said, “The problem is not really implementing the minimum wage but the consequential adjustments that has to be made accross the civil service. We expect current expenditure to crowd out capital spending because the capital expenditure budget is still around the levels that was estimated for 2019.
Also on debt service, it is estimated to be around N2.5 trillion in 2020 and the major challenge for the budget will be implementation even though we have seen a lot of tax initiatives towards generating revenue, we are now confident that will deliver the kind of boost the government wants. However, we expect revenue to underperform by 44 per cent in 2020 and that means debt service to revenue would remain elevated, meaning that the government will not have enough money to spend where it should be spending which is Education, Physical infrastructures and Health”.
The Group Managing Director, thereafter urged the government to come up with favourable market approach that will be in sync with policies, curb subsidies and push for business reforms as well as embrace trade as a large chunk of the economy is trade dependent and trade driven.