Ten Things You Need to Know About the FG Proposed 2020 Budget

SuleimanSpeaks

Here is the article I am referring to in the facebook live session:

10 Things A Business Owner You Needs to Know About FG Proposed Budget 2020

Note: If you like to read a detailed analysis of how I arrived at some of my position please the full article here:

Though the budget has not been approved yet, this is what the Federal Government (FG) has presented to Senate for ratification. If the budget were approved as it is today, here is what we know:

1. We are spending more than we are earning. The budget is a budget of deficit (Yikes !)

2. We are planning to spend 33.86% of expected revenue on servicing debt (in layman language we are paying huge interest to local Banks, IMF, and the Paris Club)

3. Capital Expenditure is the smallest line item on the expenditure side. When you complain about Nigeria not having world-class schools, hospitals, etc, don’t ask why this is the case, it’s all in the numbers (it will impact your business somehow)

4. Independent Sources (of which Taxation is a key ingredient) will impact your business in more ways than you can imagine. It is the highest revenue item on the revenue side, bigger than the revenue from Oil. Put your house (I mean your finances) in order. FG depends on that revenue line to “balance” the budget.

5. Non- Oil Export will get some focus from the Federal Government the Nigerian Export Promotion Council (NEPC). Head to the NEPC site to find out how you can get into export business (if you are interested) there is a lot of opportunities there untapped.

6. Banks: As gloomy as the budget may look: Banks will still make money (a lot from loans, transaction fees etc) If you provide products and services to the bank just remember a lot of suppliers will try to do business with them (Competition will be intense). Most Banks look stable but watch out possible mergers or acquisition)

7. There would be a lot of opportunities for Private-Public Partnership (PPP). FG cannot fund all her infrastructural plans (remember the budget is in deficit and the amount earmarked for Capital Expenditure is small)

8. Given the cost of governance is high (the numbers say so), Federal Government will aggressively (hopefully) commence the merging of parastatals and ministries. If you play big in the public sector, expect your table to shake a bit (expect some disruptions)

9. If you are in the Alternative Energy business – You are in the right business, more opportunities for you

10. The government will automate more of its process in the areas or revenue collection – Technology company and accountants/auditors will make money. Invest in automation.

If you like to read a detailed analysis of how I arrived at some of my position please the full article here:

Disclaimer: I am not an economist and I don’t pretend to be one, I am only giving my view purely based on this pictograph (shared here). All my inferences were drawn purely from this table provided by Deloitte. Remember is only a proposed budget it has not been approved yet, so somethings can change.

If you need to make any financial decisions based on the budget, please consult with your financial advisers.

https://medium.com/@suleiman.shaibu/analysis-of-the-proposed-nigerian-federal-government-fg-budget-2020-a-non-economist-view-38235926c1b2