Udoma Udo, the minister of budget and national planning, has sharply disagreed with the World Bank over the projected growth of the Nigerian economy in 2019
Udoma speaking at the Deloitte Dialogue on Nigeria’s Economic Outlook for 2019, in Lagos, said the Nigerian economy will grow by 3.01 percent this year, in disagreement with the 2.2 percent earlier forecast of World Bank.
The minister said the proposed 2019 budget is expected to further reposition the economy on the path of faster, inclusive, diversified and sustainable growth, and to continue to lift significant numbers of our citizens out of poverty.
He is also confident that inflation will be down this year to single digit of 9.98 percent from the 11.44 percent figure of December 2018. He pointed out that improved coordination of fiscal and monetary policies, exchange rate stability, improved oil export earnings and capital inflows, as well as the continuation of the current prudent management of foreign exchange reserves by the CBN, will impact more positively on the economy.
“Government is committed to growing the economy, and accordingly the 2019 Budget Proposal has been designed to continue to provide the stimulus and support required to spur growth in the economy,” he said.
He said though the current real GDP growth performance is expectedly a little sluggish as the country is just recovering from recession, however there are indications of positive momentum, especially with regard to the growth of the non-oil sector.
“Our aim is to take all measures necessary to ensure that we increase the growth rate whilst maintaining fiscal sustainability,” Udoma said.
The Minister said the benchmark for the crude price for the 2019 budget, US$60/barrel was largely determined by the forces of demand and supply in the international market and the recent trends in the market and that if, at any time beforeo the passage into law of the 2019 Budget by the national assembly, there is strong reason to believe that this benchmark price is unlikely to be realised, the Executive will engage with the National Assembly to agree a lower benchmark price.
Udoma pointed out that the 2019 proposed budget size is smaller than the 2018 Budget because of the need to contain the size of the deficit so as to keep borrowing within prudent limits. He said that the proposed deficit of N1.859 trillion in 2019 is about 1.33% of GDP, which is within the 3% threshold stipulated in the Fiscal Responsibility Act (FRA) 2007.
He explained that new initiative on infrastructure development seeks to leverage private sector capital for the development and refurbishment of road networks in industrial clusters and key economic areas in the country.
“It entitles private investors to full recovery of the cost incurred on the road project(s) in the form of a Road Infrastructure Tax Credit which can be utilized against participants’ future CIT payable to the Federal Government.
“Efforts to improve hard infrastructure will be complemented by expanding reforms in the ease of doing business. We will continue to remove obstacles, reduce costs and ensure timely delivery of services so as to improve the environment for the private sector.” 000000