More market operators hail passage of 2016 Budget

28 March 2016, Abuja – More capital market operators have said the passage of the 2016 Budget of the federal government would impact positively on the market in particular and economy at large.

Employees work at computer terminals on the trading floor at the Nigerian Stock Exchange (NSE) in Lagos, Nigeria, on Monday, Oct. 26, 2015. Nigeria plans to create a $25 billion fund with public and private financing to modernize infrastructure and avoid a recession, Vice President Yemi Osinbajo said. Photographer: George Osodi/Bloomberg

Employees work at computer terminals on the trading floor at the Nigerian Stock Exchange (NSE) in Lagos, Nigeria.

Speaking to THISDAY, a stockbroker and Chief Executive Officer of Finawell Capital Limited, Mr. Tunde Oyekunle said the passage of the budget was a big relief to the economy.

“Though long overdue, strategic implementation of the budget and effective communication of government policies would stimulate economic activities in the country,” he said.

According to him, the low economic activities that we have experienced in the past months was partly due to the fact the government being the highest spender  in every economy was not spending due to the delay in the passing of the budget.

“The way forward, the government needs to focus on effective fiscal and monetary policies. Income generation aspects of the fiscal policy should be strengthened by effective taxation, bringing more individual and corporate institutions into the tax net and diversification of the economy to boost government receipts,” Oyekunle said.

On the monetary policy side, he said the Central Bank of Nigeria (CBN)’s hiking of the Monetary Policy Rate (MPR) to 12 per cent is a concern in a depressed economy that needs expansionary monetary policies.

“Increased inflation was not caused by excess money supply but by increase in import finance due to dollars hike against the naira. I do not think it is appropriate to increase MPR at this time,” he said.

Commenting on the budget, analysts at Cordros   Capital Limited said: “We note that the current condition of the economy makes the passage of the budget a subject of national priority, as such, we expect Executive assent to follow latest early April.”

On the CBN Monetary Policy Committee’s meeting, they said the only positive they took  from the meeting is that the Committee’s admittance of foreign portfolio inflows as a necessary measure to resolve persisting forex supply constraint possibly points to further reforms in the nearest days.

“This is a significant rhetoric shift, as we recall that a top member of the Committee stated emphatically, at the January meeting,  in relation to forex and tightening that “less priority should be given to tightening measures with a view to attracting portfolio.”

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