The Chairman of International Chamber of Commerce Nigeria (ICCN) and Regional Coordinator, Sub-Saharan Africa, Babatunde Savage, has reiterated the urgent need for restructuring of government’s spending in favour of capital expenditure in view of the huge infrastructure deficit confronting the nation.
Savage, who spoke at the 19th yearly general meeting of the chamber in Lagos, noted that the relatively low performance in capital budget, which hovered around 60 per cent as at December 2017, when compared with the almost 100 per cent implementation of recurrent expenditure is not development friendly.
He said the trend of unspent capital allocations, which are usually returned to the treasury, is a product of delayed budget approval processes, hence the need to revisit this issue for the good of the economy.
According to him, it is a widely held view that the private sector is the engine of growth and poverty reduction, as well as one of the most powerful catalysts for the transformation of the economic structure of countries.
“Businesses thrive when supported with well-conceived regulatory policies and good corporate governance practices in line with global best practices.
Corporate governance, to me, is all about how an organisation is managed- its corporate and other structures, its culture, its policies, and the ways in which it deals with its various stakeholders.
“It is concerned with structures and processes for decision making and with the control and behavior that support effective accountability for performance outcomes/results”, he added.
On the future outlook, Savage said the global economic growth prospects have improved modestly due to stronger United States’ growth expectations, exit of some large economies from recession and rising commodity prices.
According to him, with the sustained recovery in oil prices, strengthening commodity prices, rising aggregate demand, rebound in investment as a result of improvements in investor’s confidence and accommodative monetary policy, which confronted the global economy in 2017, there were signs of moderate growth and improvement.
“We would expect increased diffusion effects of oil sector growth in 2018, through budgets and government spending; oil sector procurement, wage and CSR growth and oil sector support for the external sector.
“With the gradual recovery from recession, stability in exchange rates, inflation under control, we certainly have reasons to be optimistic.
Oil prices have surged to $60-70pb beyond 2017 expectations, offering Nigeria some respite and suggesting a better economic outlook in 2018. Adopting the highest standards of corporate governance to achieve long-term value for all is now imperative”, he added.