Nigerian business and economic community has been greeted with a negative news. Its National Assembly have once again announced they will not be approving the budget today as earlier promised.
As a result of the delay in passing the 2016 budget, Nigeria’s economy has further declined with huge job losses in oil, banking and business services sector. The National Bureau of Statistics reported a double digit inflation of 11.4% compared to 9.6%, the first in after four consecutive years. The unending hiccups in getting the budget approved has been blamed on an error-riddled draft submitted by President Mohammadu Buhari last December. The National Assembly identified the alleged irregularities and promised to pass the budget today. The 6.08 trillion budget was benchmarked on $38 dollar per barrel of crude oil (current price is $40.33) at 2.2 million barrels per day.
In the face of crashing oil prices, public revenue has dropped by more than 70% leaving many states in Nigeria with broken public infrastructure and piling salaries arrears to civil servants.The Nigeria stock exchange has plunged 16% year to date. Because of their huge exposure to the oil sector and further impairments in loans granted to struggling power generation and distribution companies, Nigeria’s major banks are posting profit warnings to shareholders of possible dismal 2015 full year financial report.
The country’s economic outlook will continue to wane unless Buhari’s administration and its legislative counterparts get their acts together to quickly pass a budget and articulate a clear policy direction; more grief might befall Africa largest economy.
