The President, Institute of Chartered Accountants of Nigeria, Alhaji Rasaq Jaiyeola, has said that the recently unveiled federal budget for the 2019 fiscal year is likely not going to meet its target.
Jaiyeola, who spoke on the sidelines of the inauguration of the maiden edition of the official journal of ICAN, Abuja District Society, on Tuesday night in Abuja, also stated that the projections for crude oil price and production as captured in the proposed budget were so ambitious.
On December 19, 2018, President Muhammadu Buhari unveiled a federal budget of N8.83tn for the 2019 fiscal year.
The figure came in the 2019 Appropriation Bill presented by the President to a joint session of the National Assembly in Abuja.
The 2019 total budget estimate is N300bn lower than the N9.1bn that was implemented for the 2018 fiscal year.
The 2019 budget proposal was based on an oil production estimate of 2.3 million barrels per day and an exchange rate of N305 to a dollar, while the real Gross Domestic Product growth rate was put at 3.01 per cent and inflation rate at 9.98 per cent.
When asked to comment on the current state of the Nigerian economy at the ICAN event, Jaiyeola replied, “Government has tried to steer the economy aright. We went into a recession and we are now out of it. But the impact of being out of a recession is not really felt by the populace.
“The new budget has been introduced, which is a bit lower than that of last year. The government called it a budget of consolidation and has tried to introduce some measures, but there is a lot of improvement to be made.”
He added, “I have a problem with the projection in the budget as regards the volume of crude oil that will be produced. The budget is putting it at 2.3 million barrels per day, which in my opinion is very, very ambitious given the various parameters which one should normally consider before taking such a decision.”
The ICAN president said he would be more inclined to look at something within the range of 1.9 to two million barrels per day, as the 2.3mbpd projection “in itself is a problem.”
He said, “For the oil price that was used, I also believe that they (government) have not been too conservative about it. There’s going to be a problem in achieving the price that has been used.
“Overall, even with the rate of the growth of the GDP, what has been projected given the 1.9 figure that has been achieved before, I believe that what has been projected in the budget is also on the high side.
“So, I think we should be more conservative in our budget and I’ll say that the budget is not likely to achieve what has been targeted.”
On the significance of the newly inaugurated journal, the Chairman, Abuja District Society, ICAN, Oluwafunminiyi Akande, explained that the document would enhance research work in the accounting and non-accounting professions.
He said, “As a district, we discovered that there is a gap in the production and dissemination of accounting information to users, which include students, teachers and members.
“So, we commissioned the production of the journal to enable people in carrying out research work, because research is not only limited to science.
“This journal is a product of research work and certainly good research must give room for another research work.”
He said the journal was not only meant for accountants, as lawyers, doctors, etc, contributed to the research findings in the document.