Beyond the 2016 Budget
Nigeria’s economy in the last one year has recorded many firsts in several areas. The country’s foreign reserves have fallen to less than $27 billion, the lowest since 2005. The International Monetary Fund (IMF) expects economic growth of 2.3 percent this year, the weakest in a decade. Inflation jumped to 12.8 percent in March, while the unemployment rate entered double digits of 10.4 percent. The output and result are the massive job losses being recorded on daily basis while the labour market continues to soar with unemployed Nigerians. The percentage of poor Nigerians continue to rise steadily.
Businesses, big and small are groaning under economic crunch and losses. Outdoor advertising practitioners for instance appear to be the worst hit. Practitioners has been going through excruciating and unbearable experiences for sometime. The practitioners under the aegis of Outdoor Advertising Association of Nigeria (OAAN) among other things decried the inability of member companies and clients to access foreign exchange to bring in raw materials for production. President of the Association, Babtunde Adedoyin complained of high rate of charges by states on both redundant and occupied billboards. 70 percent of our billboards are redundant nationwide, he said.
Clients are cutting budgets. Some are not sure of what they want to do this year and some can’t even access foreign exchange to bring in raw material. Adedoyin also noted that the present economic situation is forcing clients to cut their advertising budget which has taken toll on the member companies.
The slow pace of the economy was partly blamed on the delay in signing the 2016 budget into law.
The budget was finally signed on 6th May, 2016 by President Buhari. “The signing of the budget today will trigger concerted efforts to reflate the Nigerian economy, a key element of which is an immediate injection of N350bn into the economy by way of capital projects. To illustrate our renewed commitment to infrastructural development, the 2016 budget allocates over N200bn to road construction as against a paltry N18bn allocated for same purpose in the 2015 budget” stated President Buhari.
NIGERIAN STOCK EXCHANGE
Meanwhile the news that the President has signed the 2016 into law buoyed activities on the Nigerian Stock Exchange (NSE) with the market indices growing by 0.54 per cent after declining for two consecutive days. The Nigeria Stock Exchange (NSE) main index has lost 10.75 percent this year, the worst among regional peers.
Beyond signing the 2016 budget into law, Nigeria needs urgent policy adjustment to deal with external and domestic shocks, according to the IMF.
“There is a need to promote fiscal sustainability. Reduce external imbalances, safeguard resilience and enhance financial system efficiency. Nigeria needs to improve competitiveness through structural reforms and infrastructure investment,” the IMF said in a May 2016 report.”
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