Lead partner, Tax and Regulatory Services, Deloitte West Africa, Yomi Olugbenro, has assessed the recently signed N7.44 trillion 2017 budget and noted that though, there was noticeable alignment between the budget and economic growth plan, but full implementation of capital project was critical to achieving desired developments and economic recovery.
Olugbenro, who spoke at customer engagement forum organised recently by Standard Chartered Bank Nigeria to provide insights on the budget and its impact on business, acknowledged that 36 percent of capital expenditure allocations to works, power and housing, and transport showed serious intention to develop infrastructure.
The Deloitte lead partner, who sees the 2017 budget as a catalyst for economic recovery, build infrastructure and deliver growth, advised that Nigeria must also curtail the level of recurrent expenditure currently at 70 percent and steadily raise capital expenditure to a minimum of 50 percent of aggregate expenditure.
As the current level of revenues remains low and unable to galvanise desired developments, he said, “Sustained effort is therefore required to raise non-oil tax revenue as borrowing comes with attendant costs.
“Debt to GDP ratio appears decent in principle, but low level of revenues means about 1/3 of revenue is spent on debt servicing. That is a major concern, especially with our history of waste and application of borrowings.”
Olugbenro, who also spoke on taxation, the ease of doing business, interest rate, foreign exchange market, government borrowing and lending rates, advised business owners to seek the right information as it relates to their respective businesses while ensuring a clear understanding of policies and systems within the local economy to enable ease of transactions.
Explaining objectives of the forum, head, Retail Banking, Standard Chartered Bank, Ebehijie Momoh, said the primary objective was to add value to clients of the bank.
“The signing of the Nigeria 2017 budget was a significant milestone for many businesses owners and industries as it marked what many perceive to be a green light for accelerated economic growth in the country. This forum was organised to ensure our clients have a better understanding of the impact of the budget on their businesses and how the bank can provide support to enable them achieve their aspirations. We are, in our little way, making sure that our clients have the best support required to navigate through the second half of the year, as we believe the economy is being positioned to improve significantly,” Momoh said.
The event, held at the bank’s corporate head office in Lagos, is part of several engagement initiatives held by the bank to deepen its relationship with clients.