Budget Cut will Affect Jobs, Increase Poverty Level – Expert
The Managing Director/CEO of APT Securities and Funds Limited, Alhaji Kassimu Kurfi, lamented the decision of the federal government to reduce the 2019 budget size at a time the nation’s population is growing at a steady three per cent rate, just as the number of those within the poverty bracket.
Speaking on “Budget delays and implications on the economy and stock market,” at the 2019 Traders and Investors Success Summit (TISS) in Lagos, Kurfi, a chartered accountant and capital market expert, expressed reservation at the government’s decision to cut the budget by N400 billion. He said the decision will affect so many variables including jobs.
In real terms, he told participants that the “population of Nigerians living within the poverty level will rise to 90million or more by 2019.”
Breaking this down, Kurfi said at the growth rate of Nigeria’s population on the average, six million people are being added to the number on yearly basis, adding that such persons need to be catered for.
The situation, he said, is made worse by the yearly average inflation growth rate of about 13 percent, adding that when factored into the budget, means the government would effectively spend just N7.7 trillion next year.
“With government spending shrinking, the multiplier effect will be more to the economy,” he said, wondering why government’s revenue should fall by N840 billion in 2019 compared to 2018.
The falling stock markets indices, he continued, reflect what is happening in the economy, warning that “except the outlook improves with strong economic policies and positive government statements to reassure of a rebound in the economy, recovery could take a longer time in coming.”
To address the challenges, he reiterated calls for an intensified diversification of the economy farther from oil, even as the “Petroleum Industry Bill must be passed into law to reduce corruption to the barest minimum so that the nation’s refineries will operate at maximum capacity.”
As part of ways to broaden the nation’s revenue base, Kurfi urged government to attract much more people into the tax net, to achieve a target Tax-GDP ratio of 20 per cent, from the current paltry eight per cent.
Besides intensifying the fight against corruption so that the nation’s scarce resources are better utilised, the APT boss called for a re-organisation of “the budget management framework so that issues between National Assembly and Executive are settled amicably within short period and the budget passed one month after submission.”
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