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2018 Budget Implementation Crucial, Experts Tell Buhari

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  • 2018 Budget Implementation Crucial, Experts Tell Buhari

Economic and financial experts have expressed concerns over the Federal Government’s ability to implement the 2018 proposal, saying the current year’s budget performance has been below average.

They also conveyed divergent views over the budget assumptions and key indices as presented by President Muhammadu Buhari to a joint session of the National Assembly on Tuesday.

While some expressed doubt over its likely efficacy, others said the budget would achieve all it was set to achieve if its implementation would begin on time.

The Chief Executive Officer, Financial Derivatives Company Limited, Bismarck Rewane, described the budget proposal as good but said there were fundamental issues with some of its assumptions.

He said, “It is called the ‘Budget of Consolidation’ but the success is not fully entrenched yet. The growth is still fragile. It is a step in the right direction but it is not bold, aggressive and robust enough.

“If you discount inflation with the expenditure, then you see that it is still small. You need an increase of at least 30 per cent. The exchange rate of N305/$ is not realistic. What volume of transactions is done at that rate?

“Looking at the oil production of 2.3 million barrels per day, I don’t think that is perfect. It is a good budget but it did not go far. You need to grow expenditure by a minimum of 30 per cent. As an economist, I will say there is a lot of work to be done; you need vision, courage and integrity.”

An analyst and Managing Director, Afrinvest Securities Limited, Mr. Ayodeji Ebo, said the N8.6tn expenditure was too ambitious, saying he wondered how the Federal Government would raise such an amount.

“My concern is how the government will fund the expenditure. The government is still far behind in terms of getting revenue to fund the 2017 budget. The exchange rate of N305/dollar is not realistic considering the fact that most transactions are now being done at N363/dollar,” he stated.

Ebo stressed the need to pass the budget on time and begin its implementation by January.

An economist at Capital Economics, John Ashbourne, said the budget was too ambitious.

He told Reuters, “Mostly, I think that they are setting themselves yet more unattainable goals.

“The Federal Government falls short on its revenue and expenditure targets every year, and Buhari always responds by writing an even more ambitious target into the budget for the following year.”

An economist at Lagos-based Vetiva Capital Management, Michael Famoroti, said, “If the government will borrow externally as it has indicated, the budget has to be passed early so that it can meet up with the funding gap

“There is the challenge of getting approval from the legislature and it’s something it can’t overlook.”

In his comments, the Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said, “The budget is achievable. The oil revenue projection of N2.4tn is achievable. The main condition is to ensure stability in the Niger Delta, as this will enable them to achieve 2.3 million barrels per day output target. If this budget is passed on time, the 3.5 per cent growth and 12.4 per cent inflation rate will be achievable. The year 2018 is the last full year the government has to impress the electorate. What we need is diligent implementation of the budget.

“The 2017 budget has some issues because it was passed late and the economic environment was tougher than now. This is why we must begin the implementation of the 2018 budget in January.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Computer Village Traders Demand Refunds as Lagos State Cancels Katangowa Project

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Traders at the renowned Computer Village in Lagos find themselves in a state of uncertainty following the abrupt termination of the multibillion-naira Katangowa project by the Lagos State Government.

The project, which was aimed at relocating the bustling tech market from its current site in Ikeja to the Agbado/Oke-Odo area of the state, has left traders in a state of limbo.

Despite the cancellation of the project reportedly occurring two years ago, traders claim they were not informed by either the government or the developers, Bridgeways Limited.

This lack of communication has left them in a precarious position, particularly concerning the substantial upfront payments made by some traders to the developers.

Chairman of the Computer Village Market Board, Chief Adebowale Soyebo, expressed dismay at the lack of communication from the authorities regarding the project’s termination.

He explained that neither the government nor the contractors had officially informed them of the decision, leaving traders in the dark about the fate of their investments.

Traders who had made payments to Bridgeways Limited now seek clarity on the refund process. The absence of official communication has compounded their concerns, with many uncertain about the fate of their investments.

While acknowledging the payments made by traders, Lagos State Governor’s Adviser on e-GIS and Urban Development, Dr. Olajide Babatunde, assured that the government would facilitate refunds.

He, however, said there is a need for proper identification and verification to ensure that affected traders receive their refunds accordingly.

The termination of the Katangowa project has reignited debates about the relocation of Computer Village.

Traders assert that the issue of relocation should not be raised until the new site is at least 70% completed, as per their agreement with the government.

The cancellation of the Katangowa project underscores the challenges associated with large-scale urban development projects and the importance of transparent communication between stakeholders to avoid such situations in the future.

As traders await further directives from the government, they remain hopeful for a resolution that safeguards their interests and ensures the continuity of one of Nigeria’s most prominent tech markets.

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Government Begins Disbursement of N200bn Support Fund to Manufacturers and Businesses

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The Ministry of Industry, Trade and Investment has initiated the disbursement of the long-awaited N200 billion Presidential Conditional Grant Scheme.

This is the beginning of a vital phase in the government’s strategy to provide financial assistance to manufacturers and businesses across Nigeria.

The scheme, which is being administered through the Bank of Industry (BOI), has been divided into three categories of funding, totaling N200 billion.

The disbursement process comes after an exhaustive selection process and verification of applicants to ensure transparency and accountability in the allocation of funds.

Doris Aniete, spokesperson for the Ministry of Industry, Trade and Investment, announced the progress in a statement posted on the trade minister’s official X (formerly Twitter) handle.

Aniete highlighted that verified beneficiaries have already started receiving their grants, signaling the beginning of the phased disbursement strategy.

“We are pleased to inform you that the disbursement process for the Presidential Conditional Grant Programme has officially commenced. Some beneficiaries have already received their grants, marking the beginning of our phased disbursement strategy,” stated Aniete.

She further disclosed that by Friday, April 19, a substantial number of verified applicants are set to receive significant disbursements.

However, Aniete emphasized that disbursements are ongoing, and not all applicants will receive their grants immediately, assuring that all verified applicants will eventually receive their grants in subsequent phases.

The initiation of the disbursement process comes after more than eight months since President Bola Tinubu announced the grant for manufacturers and small businesses.

The scheme aims to mitigate the adverse effects of recent economic reforms and foster sustainable economic growth by empowering businesses with financial support.

President Tinubu had outlined the government’s commitment to strengthening the manufacturing sector and creating job opportunities through the disbursement of N200 billion over a specified period.

The funding is intended to provide credit to 75 enterprises, each able to access up to N1 billion at a low-interest rate of 9% per annum.

However, the implementation of the programme has faced challenges, including delays and criticisms regarding the registration process.

Femi Egbesola, President of the Association of Small Business Owners, expressed concerns over the slow pace of data collation and suggested that genuine businesses were being discouraged from accessing the loans.

Despite the hurdles, the commencement of the disbursement process signifies a significant step forward in the government’s efforts to provide vital support to manufacturers and businesses, potentially revitalizing economic activities and driving growth across various sectors.

As beneficiaries begin to receive their grants, the impact of this initiative on the nation’s economic landscape is eagerly anticipated.

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MicroStrategy Rally Crushes Short Sellers, Wiping Out $1.92 Billion

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Short sellers betting against MicroStrategy found themselves facing significant losses as the company’s rally wiped out $1.92 billion since March.

This development comes amidst a rally that has seen MicroStrategy’s stock outperform bitcoin, causing a considerable hit to those who had taken a bearish stance on the tech firm.

According to data from S3 Partners, short sellers have been on the losing end since March, as MicroStrategy’s stock surged, highlighting the impact of the rally on those betting against the company’s success.

This loss underscores the challenges faced by short sellers in a market where certain stocks experience rapid and unexpected price increases.

The rally in MicroStrategy’s stock is attributed to several factors, including the approval of several spot bitcoin exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC) earlier in the year.

This move by the SEC brought bitcoin, a once-nascent asset class, closer to the mainstream and fueled investor interest in companies like MicroStrategy, known for their significant holdings of the cryptocurrency.

MicroStrategy, which held nearly 190,000 bitcoin on its balance sheet as of the end of 2023, has indicated its intention to continue increasing its exposure to the digital currency.

The company’s decision to sell convertible debt to raise money for additional bitcoin purchases further bolstered investor confidence and contributed to the stock’s rally.

Analysts at BTIG noted that the premium for MicroStrategy’s stock reflects investors’ desire to gain exposure to bitcoin indirectly, especially those who may not have the means to invest directly in the cryptocurrency or ETFs.

The company’s ability to raise capital for bitcoin purchases is seen as a positive sign for shareholders, adding to the optimism surrounding its stock.

However, despite the recent rally and optimism surrounding MicroStrategy, the crypto industry as a whole continues to be heavily shorted.

Short interest in nine of the most-watched companies in the crypto space remains high, standing at 16.73% of the total number of outstanding shares, more than three times the average in the United States.

Moreover, concerns persist regarding the SEC’s stance on cryptocurrencies, with some experts suggesting that the approval of spot bitcoin ETFs may not necessarily indicate a broader acceptance of other similar products, such as spot ethereum ETFs.

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