Experts have said that the fact that the National Assembly is able to pass the budget at difficult circumstances like this and that expenditure has been hiked is good for the economy. They say, with increased spending, the economy would become productive and as such will help the country overcome the present economic crisis.
However, Wale Abe, chief executive of the Financial Market Dealers Association (FMDA), is concerned that the increase in budgeted expenditure may be as a result of the elections scheduled for next year, expressing reservations that most of the monies may be diverted into funding the coming elections. On the other hand, he said if government will be sincere in its spending then there will be huge improvement in infrastructure.
He warned that spending must not be concentrated on consumables alone, saying such will not bring the desired results. According to him, if spending is concentrated on infrastructure, there will be multiplier effect on the economy.
John Okoro, a retired banker, noted this is not the first time the government or National Assembly will be increasing budgets. The only difference this time, he said, is that Acting President Jonathan Goodluck is seen in a different light from past presidents because of the way he became acting president.
According to Okoro, the man may just want to make history by making sure that he delivers the dividends of democracy, so that he will be remembered for that in the future. His fears, however, are that the crop of ministers he is recalling to the cabinet do not look like the kind of people who will deliver.
The National Assembly increased budget by 14.73 percent from what the executive arm of government sent to it. The N4.68 trillion passed by the National Assembly is fuelled by the 17.54 percent increase in oil price to $67 per barrel and another 12.55 percent increase in crude oil production to 2.35 million barrel per day.
Based on these expectations, the National Assembly increased capital expenditure by 35.26 percent from N1.37 trillion that was proposed by the executive to N2.35 trillion as passed by the National Assembly. Also, recurrent expenditure rose by 3.28 percent to N2.077 trillion.
Analysts are concerned that the increased spending would leave the country in difficult times should crude oil prices drop or there is another round of disruption of oil companies' operations in the Niger Delta.
Experts say increased budget will help spend way out of distress (http://www.businessdayonline.com/index.php?option=com_content&view=article&id=9618:experts-say-increased-budget-will-help-spend-way-out-of-distress-&catid=85:national&Itemid=340)
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