Buhari 2020 budget more of a fiction, says financial expert

October 13, 2019
374 Views

UK-based accountant and finance professional, Feyi Faweyinmi, says the 2020 budget proposal recently presented to the National Assembly by President Muhammadu Buhari, has no connection with the present realities in the country.

Speaking at the weekend, Faweyinmi who described the budget proposals as a fiction, said it is not different from the previous budgets which was just a mechanism by which salaries are paid.

“Maybe we can say the Capex is now more ‘realistic’ as the numbers have come down compared to the 2019 budget. The Capex budget for last year was meaningless as the actual implementation was so far from what was budgeted. So reducing it makes some sense.”

He however commended the decision of the federal government to increase VAT, noting that public finances in the country are so bad that there are no good options.

“However, the government then increased the threshold to pay the VAT to N25m and exempted new industries that were not previously exempted. To me, this defeats the whole purpose of raising revenues as I don’t think the increase will bring in much money with exemptions added. If the government wanted to do it like that, then it was pointless to waste political capital on a tax increase that doesn’t bring in much revenue. It could simply have left it at 5% and then widened the net maybe by removing some exemptions.”

On the issue of a possible devaluation of the Naira, Faweyinmi said it is incredible that the FX rate has remained fixed for almost 3yrs now.

“But the key trigger is that the CBN is effectively borrowing money from foreign investors at 14% and lending it to the FG at 0% and then “chesting” the difference. The CBN’s balance sheet is now ‘full’ and there is no room to hide anything again.”

“To focus on policies that take the responsibility of investing in the economy away from government to the private sector. They seem to think they can do everything. The Nigerian economy badly needs investments right now so policies that attract investment should be the focus.

Also reacting to the new Economic Advisory Council, Faweyinmi said for political reasons, President Buhari might be forced to take the advice of the council members since they will want to prove a point about being better than the EMT which they effectively replaced.

You may be interested

AFCON 2025Q: New Boy Osho, Iheanacho, Start For Super Eagles Vs Benin Republic
Sports
Sports

AFCON 2025Q: New Boy Osho, Iheanacho, Start For Super Eagles Vs Benin Republic

Webby - November 14, 2024

The Super Eagles will line-up in a 3-4-3 formation in tonight’s 2025 Africa Cup of Nations qualifying tie against Benin…

My Goal Was To Achieve Success With Ten Hag At Man United –De Ligt
Sports
Sports

My Goal Was To Achieve Success With Ten Hag At Man United –De Ligt

Webby - November 14, 2024

Netherlands international Matthijs de Ligt has suggested Erik ten Hag didn’t get the breaks he needed to keep his job…

I Want To Take My Game To New Level –Lookman
Sports
Sports

I Want To Take My Game To New Level –Lookman

Webby - November 13, 2024

Super Eagles winger Ademola Lookman has reiterated his commitment to take his game to the next level.The Nigerian international, who…

Leave a Comment

Your email address will not be published.