The Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu has decried the misrepresentation of the size of the 2016 budget among Nigerians saying that there was need to actually dissect the budget size properly.
Chukwu who was speaking in an exclusive interview with Primetime Reporters in Lagos stated that this had become necessary as there were some element of confusion among Nigerians about the budget size.
He disclosed that the budget of N6.06 trillion was made up of N1.57 trillion which was the capital expenditure of the budget which according to him was the critical aspect of the budget even as he recalled that there was a N2.65 trillion which was the recurrent expenditure which the government used to run its overhead like flight to America, payment of salaries and wages adding that those expenses had been running and that they were not going to change in any format as they were daily running expenses of the government.
“So, you are not going to see any new effect because they have been running. We must discountenance expenditure of N2.65 trillion. There is another N1. 47 trillion which relates to debt service obligation. The government has been borrowing and government has been servicing those debts. These are transfer payments that are made to those who had lent money to government. They are not going to have any material effect on the welfare of the citizens because they are obligations the government has been honouring.
“The N351 billion that is transferred as statutory transfer, those are payments transferred to the legislature, to the judiciary. So, that is part of the recurrent expenditure of the judiciary and the National Assembly and those agencies of government that are semi autonomous. So, also we are not going to see any material effect on the general welfare and wellbeing of the citizens because these are expenses that are running on daily basis.
“So, if you take the N2.65 trillion, N1.47 trillion, add a N1.57 trillion which is the capital expenditure and then N351 billion that is the statutory transfer, you have a budget of N6.06 trillion. So, the only aspect is of the N2.65 trillion, the N500 billion that relates to intervention to the lives of the vulnerable and N1.7 trillion are what is critical and what we should expect to have impact on the economy”, he explained.
On planned injection of N350 billion on quarterly basis by the government to stimulate the economy, he said, “Unless the government of talking about phasing the budget implementation because if you say you want to inject N350 billion every quarter, the budget is N1.57 trillion, call it N1.6 trillion but almost two quarters have gone. So, you actually have two quarters left for the implementation of the budget.
If the budget is maybe, you are talking of three quarters, so, if you are talking about N350 billion every quarter, then you are talking about N1.05 trillion whereas the budget is N1.57 trillion. Ordinarily, if you take the N433 billion earmarked for the Ministry of Power, Works and Housing, they are contracts. Like Fashola has said, they have N1.7 trillion contracts that they have to meet. So, of the N433 billion, disbursement will be made to the existing contractors and unless you have to segment them and disburse on quarterly basis.
“But I know in reality, the implementation of the capital expenditure budget is not staggered on quarterly basis because you have a contract that you are going to pay contractor N50 billion, you are not likely to tell him I will give you N12.5 billion every quarter, you have to pay him according to the progress of work done”.
He however opined that what mattered was that the budget had been approved and that government now had the go ahead to spend money on the capital expenditure.
Send your news, press releases/articles to info@primetimereporters.com. Also, follow us on Twitter @reportersinfo and on Facebook at facebook.com/primetimereporters or call the editor on 07030661526.
