Mr. Johnson Chukwu, who spoke with SweetcrudeReports, said the current $38 per barrel bench mark of crude oil for the budget will result to revenue challenges due to the sharp drop of crude oil price to less than $30 per barrel.
Budget 2016 will suffer severe revenue challenges – Financial analyst
Kunle Kalejaye 19 January 2016, Sweetcrude, Lagos – Nigeria’s controversial 2016 budget if passed into law by the National Assembly will suffer severe revenue challenges, according to a financial analyst.
He explained that the drop in oil price, less than the budget bench mark, meant that government’s projected revenue would drop by 20 percent.
Mr. Chukwu added that non-oil revenue would also be difficult to meet, since they are indirectly related to oil activities.
“It then means that revenue from taxation, Customs and other non-oil revenue will be difficult to meet,” Chukwu said, adding: “In effect, the budget is going to suffer from severe revenue challenges and if the revenue targets are not met, then the expenditure target will not be met.”
Nigerians and the economy at large can heave a sigh of relief since the budget has not been passed into law by the National Assembly, NASS, Mr. Chukwu said as he expressed optimism that NASS will take into cognisant the current realities and make needed adjustment in the budget even though there are now two versions of the budget.