One week after President Muhammadu Buhari put pen on paper as regards the 2016 budget of the Federal republic of Nigeria, a financial analyst, Mr. Johnson Chukwu has said that the budget implementation would have some positive effects on the economy of the country.
Speaking in an interview with Primetime Reporters in Lagos said that irrespective of how big or how small the effect would be, it would have positive effects on the economy and that it would also give government the opportunity to express their policies as it related to the economy.
Chukwu observed that with the presidential assent for the 2016 budget, Nigerians were now relieved that the budget had been signed eventually and that the tool for driving government’s economic objectives was now in hand.
Recounting the positive effects the 2016 budget will have on the economy as well as on the citizenry, he said,” In terms of infrastructure, there is a budget of N1.7 trillion that is meant for infrastructure development of which about N433 billion is meant for Power, Housing and Works. These three Ministries combined are critical to the economic welfare and wellbeing of the citizens. You need good roads to evacuate goods and services and to move around and the Minister of Power, Housing and Works has said that perhaps, they need about N1.7 trillion to meet the financial obligations of financing over 200 projects that are presently existing.
“So, it then means that with this money, contractors to some extent will go back to work. So that would have helped the country to create new employment or to sustain the existing employment of those who works in the construction industry. The activities in the construction industry will affect other ancillary sectors like those that supply materials to the construction industry.
“So, we are going to see an optic in the economic activities in the ancillary industries to the construction industry. When people are employed and they are paid salaries, it will improve their capacity to consume goods and services. So, we are going to see an optic in the demand for consumer goods and services.
“So, that that optic in the demand of goods and services will create another positive effect in demand pattern and you will see some level of improvement in the demand for real sector production or demand for real sector goods. So, you are going to see that as an effect on the economy as well”.
Chukwu who is also the Managing Director and Chief Executive Officer of the Cowry Asset Management Limited pointed out that because the economy is interrelated, any positive impact in one segment of the economy will in one way or the other affect the other segments.
According to him, “Another area is that about N500 billion was earmarked in that budget as intervention for the welfare and wellbeing of the people in the lower rung of the lather, the vulnerable. I don’t know how the intervention will be implemented but once that intervention is implemented, it will help lift the standard of living of those people, it will help increase the demand of the basic goods and services like foodstuff, clothing, those things that will be needed by those who are vulnerable ordinarily which they cannot afford without financial empowerment. So, that will have a multiplier effect on consumer goods and production or manufacturing and we are going to see effects in those areas. I think these are the areas Nigerians should expect that the budget will impact on their lives either directly or indirectly”.
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