President Buhari signed the 2018 Budget into Law Wednesday June 20, 2018 at the State House, Abuja.

A pro democracy group New Vision Nigeria on Friday responded to President Muhammadu Buhari’s statement on the National Assembly’s alleged padding of the 2018 budget, saying that the alteration was done in the interest of good Nigerians and in accordance with the stipulated law.

Buhari had accused the lawmakers of reducing some of the projects earmarked by the executive.

The group through their spokesperson Emmanuel Ajie challenged the executive arm to publish its budget and the deductions carried out by the federal lawmakers for transparency.

Recall that the N9.12 trillion 2018 appropriation bill was signed on the 19th of June and generated a lot of controversy after President Buhari alleged that National Assembly padded the budget as there was a visible difference in the signed budget from the bill sent to the National Assembly months earlier.

Ajie stated that the passed budget was a reflection of the current Nigerian economy and the Nigeria Senate only adjusted the appropriation bill to fit the needs of Nigerians.

The spokesperson noted that each dollar increase to the oil price benchmark generates N87.27 billion as additional spending for the FGN. Thus, N523.65 billion was the additional revenues following the $6 increase in the oil price benchmark.

Out of the additional revenue, the Executive utilized N152.6 billion to increase their initial expenditure proposal.

The balance of N371.05 billion was spread across other capital projects including the provision of N55.15 billion for the implementation of the National Health Act as well as the reduction in the deficit, and thus, new borrowing requirement.

The deficit was reduced from N2 trillion (proposed by the Executive) to N1.95 trillion (that is from 1.77% of GDP to 1.73% of GDP), and as such the domestic borrowing was reduced by N55.88 billion, from N849.67 billion to N793.79 billion which is bound to free up more resources for private investment.

Ajie also noted that capital budget was increased from N2.54 trillion (proposed by the Executive) to N2.87 trillion. This represents about N331 billion net increase which was allocated to critical sectors of the economy that are growth stimulating, thus, required greater prioritization.

For instance, Education and Health capital budgets were increased by N37.92 billion and N13.37 billion respectively. The Budget for Agriculture as well as Industry, Trade and Investment was also increased by N30.21 billion and N21.03 billion respectively.

In addition, and among others, the capital budget for Science and Technology and Power, Works and Housing were increased by N25.08 billion and N62.58 billion respectively.

The reduction of N347 billion in the allocations to 4,700 projects represents only about N73.8 million on average, and 14% of the aggregate capital expenditure proposed by the Executive. The reductions were from low priority areas to higher priority and more growth-enhancing projects and activities. In addition, Ajie also noted that in allowing for the reductions of some capital provisions proposed by the Executive, due considerations were given to the implementation/ utilization capacity of the implementing MDAs. Sound economic judgement is defeated when more resources are heaped on a particular project that can only accommodate less in any given fiscal year or project cycle.

During the signing of the Appropriation Bill, President Buhari was quoted to say that “Another area of concern is the increase by the National Assembly of the provisions for Statutory Transfers by an aggregate of 73.96 billion Naira. Most of these increases are for recurrent expenditure at a time we are trying to keep down the cost of governance.”

In response, Mr Ajie stated that it is important to point out that 60% (about N44.7 billion) of the increase in the statutory transfer was applied to the NDDC. Part of this, about N11 billion, is based on the legal provision establishing the Commission while the balance of N33 billion is to cater for outstanding liabilities owed the Commission by FGN.

Mr Emmanuel Ajie also stated that it should be noted that recurrent expenditure is not bad in itself. In fact, it will be difficult to implement capital project without recurrent spending. At a time when costs are higher than pre-2015 levels, and overhead cost of the Executive is generally increasing, it makes good judgment to adjust the expenditures of other arms of government including other key statutory bodies especially when their activities have not reduced but increased. With more Court cases as well as more legislative activities, it is difficult to justify increasing only the overhead of the Executive.

Summarizing the group’s support for the adjustment of the 2018 Appropriation Bill by the Senate, Mr Ajie finished by urging improvement of implementation of the budget through enhanced revenue generation
as well as increasing the utilization rate of MDAs.


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