•To introduce sustainability, inclusive devt index
The Institute of Chartered Accountants of Nigeria (ICAN) on Monday, called for caution regarding assumptions used in formulating the 2024 Federal Government budget, especially in the context of oil prices, deficit financing, inflation and policy coordination.
This was even as the Institute revealed that it was planning to launch its sustainability and inclusive development index aimed at assessing government’s accountability and financial management contribution to its citizens well-being.
President Bola Tinubu had on November 29, announced government’s plans to spend N27.5 trillion in the new financial year, noting that the plan will attract investment, offering “renewed hope” during tough economic times.
The government’s spending priorities according to Tinubu will include improving security and infrastructure as well as taking measures to ease the cost of living crisis. He projected higher production and tax collection which will allow his administration to borrow less.
According to him, inflation will stand at 21.4 per cent. However, ICAN President, Dr Innocent Okwuosa, in a briefing held in Lagos, said while there are positive elements in the budget, caution is required regarding the President’s lofty assumptions.
“The concern lies in the assumptions used in crafting the budget, particularly in terms of oil prices and production. The current OPEC allocation for Nigeria is less than the assumed production in the budget. From that last meeting held by OPEC, Nigeria has been allocated only 1.38 million barrels per day and so if you compare that to the 1.74 million barrels per day, there is so much disparity. Although we can say we can produce that but judging from budgeting from an accountability index point of view, a wrong assumption will lead to non-realisation of the budget”.
Okwuosa noted that the budget assumes an inflation rate of 21 per cent while the current inflation rate is higher at 27 per cent and questioned the feasibility of achieving the 21 per cent target, given the existing economic conditions. According to him, the assumption about coordinating fiscal and monetary policy to spur economic growth is viewed skeptically, considering the historical challenges in achieving such coordination.
He thereafter revealed that ICAN will introduce a new initiative focused on sustainability and inclusive development.
“The index aims to move beyond traditional financial metrics and assess how government accountability and financial management contribute to citizens’ well-being. This initiative aligns with the Sustainable Development Goals (SDGs), emphasizing inclusive development and addressing the needs of the poor and vulnerable.
We are at a stage where this has been approved in principle and a presentation will be made to the council after which we can constitute a committee that will come up with a framework”, the ICAN President said.