By OLUSHOLA BELLO, Lagos
As the National Assembly brainstormed on the 2018 budget proposals of the federal government, there are indications that it may be of immense benefits to the companies under the Agricultural, Building Material, Construction, Power, Manufacturing sector on the Nigerian Stock Exchange (NSE).
Capital market analysts said these sectors would benefit much from the federal government’s 2018 budget if well implemented. President Muhammadu Buhari, during the budget presentation speech highlighted achievements in the agricultural sector so far and the plans to do more.
According to the President, the federal government shall continue to intensify its interventions through the Anchor Borrowers’ Programme and the Presidential Fertilizer Initiative to ensure that this momentum is sustained. In addition, there was provisions in the 2018 budget to complete ongoing irrigation projects at Ada, in Enugu State; Lower Anambra, in Anambra State; and Gari, in Jigawa State.
Buhari also stated that the government would establish at least six Staple Crop Processing Zones, in the first phase. The focus is on backward integration for grains, horticulture, livestock, fisheries and sugar; as well as exportable commodities such as cocoa, cassava and oil palms, stating that there will take a hard stance against smuggling.
While, under infrastructure, the 2018 budget devoted a large chunk of capital expenditure to power, works, housing and transportation. A total of N2.4 trillion was devoted to capital expenditure, Power Works and Housing takes the lion share of N555 billion while Transportation has been allocated N243 billion.
Speaking recently at the 2018 budget seminar organized by Securities and Exchange Commission (SEC), the head, Economic Research and Policy Management Division of SEC, Afolabi Olowookere said that the capital market would perform better in 2018 because of the budget focus.
He noted that national budget when probably implemented could promote macro-economic growth and stability and both of which have significant positive influence on the capital market, saying that budget is divided into the expenditure, the revenue and deficit and each of these component of budget can directly affect the capital market which can be debt or equities and it can also indirectly affect the capital market.
According to Olowookere, directly government can borrow in the capital market, and they can patronize companies that are listed in the capital market, while indirectly, budget has implication for exchange rate, interest rate, deflation and economy growth and these factors or macro-economic condition in turn can affect the capital market.
He said that stocks under power and construction sectors would benefit from the he budget, saying that financial companies and services firms that serviced the sectors would indirectly benefit from the budget. He also said that stocks of companies, supplying government materials or working for government, would benefit from the budget indirectly.
Olowookere pointed out that the world economy is seen to grow from 3.6 per cent to 3.7 per cent next year by IMF, Sub-Sahara Africa from 2.6 per cent 3.4 per cent and Nigeria coming from -1.6 per cent in 2016 to 0.8 per cent in 2017 and 1.9 per cent in 2018, this illustrate that the budget affect the economy and the capital market.
Court Remands Mechanic, Apprentice Over Alleged Rape
APC Chieftain Tasks Wike On Spread Of Projects
Delta Govt Flags Off Year 2020 Cassava Devt Programme
FRSC Returns N.9 million To Accident Victim To Family In Nasarawa
Plot To Smuggle $890,000: Customs Confirm Arrest Of Two Lebanese In Rivers
Bauchi Govt. Recovers N225 Million From Ghost Workers, Pensioners
Reinstatement of Deregistered Parties has Given Hope to Democracy – Ameh
COVER STORIES13 hours ago
Air Peace Recalls Sacked Pilots
EDUCATION22 hours ago
NECO Releases 2020 Examination Timetable
NEWS13 hours ago
Court Orders Pasting Of Suit Against Ize-Iyamu At APC Headquarters
NEWS21 hours ago
Couple Express Appreciation Over Overwhelming Support By PMB, Others
NEWS23 hours ago
Edo 2020: We’ll Continue To Pursue Peace Despite Opposition Provocation – Obaseki
Others23 hours ago
NEDC To Execute 224 Projects In Northeast On Health, Others
NEWS24 hours ago
‘PMB, Current Service Chiefs Still Best for Nigeria’
COVER STORIES13 hours ago
NECO To Install CCTV Cameras In Centres, Unveils 2020 Timetable