Abuja - Plans by government to borrow funds are unreasonable owing to the precarious financial position of some states, a local market watcher said following the passing of the 2016 budget.
The sentiment by Rand Merchant Bank (RMB) comes after the National Assembly has approved the budget, also referred to as 2016 Appropriation Bill, which was first tabled in November 2015.
Despite waning fiscal revenues, the budget allows for a 30 percent increase in expenditure.
“Despite the finance ministry’s intention to borrow US$5 billion from a host of creditors, its budget expectations are impractical given the demands on the government’s coffers by Nigeria’s cash-strapped states,”
said RMB in its latest global markets update released on Thursday.
The financial firm said in light of Nigeria’s macroeconomic quandary, traditional sharing agreements were unlikely to hold.
“Departments that were previously underserviced might be afforded greater funding to foster economic growth, though we remain sceptical of the actual execution of funds.”
- CAJ News