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The N8.83tn 2019 budget predicated on the oil price of $60 per barrel was only presented to the National Assembly late December and has been generating a lot of concerns.
The Federal Government, in the budget, had expected production of 2.3 million barrels per day, while it still has a current output of about two million barrels per day.
As of the time the budget was being prepared, the global benchmark crude rose to $86 per barrel in October 2018, which led to the expectation that the high price could be sustained, before it started falling, and currently now at $55 per barrel.
This is further generating worries on how realistic it will be to achieve the set targets, as the oil sector generates the highest revenue to the government.
Also, given that 2019 is a year of the general elections; foreign investors would be keen on knowing if there would be consistency or abortions of government policies.
The outcome of the elections, if the incumbent government would remain, would determine their investment decisions in the country.
Elections
The Director-General, Chartered Insurance Institute of Nigeria, Mr Richard Borokini, said that 2019 was a year of elections, and things were usually a bit uncertain.
He said, “In an election year, things are usually a bit uncertain at the government level. People don’t know whether there will be a change in the government, and if there is a change in the government, economic policies will have to change.
“And these are the things that investors will look at and it will make them become a little bit patient to know whether there will be consistency or change in policies.”
In the first half of 2019, he said, the government spending would be linked to politics and mostly, sectors that were directly related to elections would benefit. For instance, he said the communications industry would attract a lot of adverts and the automobile sector because there would be purchases of vehicles for the electioneering.
According to him, the slow pace of passing the 2019 budget will have an overall effect on economic growth.
The Registrar/ Chief Executive Officer, Institute of Credit Administration of Nigeria, Prof Chris Onalo, said there would be a lot of concentration on the election process by the government and the economy would suffer for it.
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