GBOLABO AFUWAPE.
Alhaji Kassimu Kurfi, a chartered accountant and capital market expert, at the weekend in Lagos, warned that the anticipated N400 billion cut from the 2019 budget will impoverish about 90 million Nigerian and further plunge the country into poverty abyss .
He faulted the decision of the Federal Government to reduce the 2019 budget size at a time the nation’s population is growing at a steady 3% 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 2018 Traders and Investors Success Summit (TISS) in Lagos, Kurfi, chief executive of APT Securities & Funds Limited, expressed reservation at the government’s decision to cut the budget by N400bn.
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.
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%, adding that when factored into the budget, means the government would effectively spend just N7.7tr 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 N840bn 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%, from the current paltry 8%.
Besides intensifying the fight against corruption so that the nation’s scarce resources are better utilized, the APT boss called for a re-organization 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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