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Recurring delay in passage of Budget: Matters arising

The Chilean constitution mandates that the executive provide the legislature its budget 60 days before the end of the fiscal year. While this time- frame is comparable with a number of countries, the consequences of Chilean legislative inaction are especially significant. If the legislature does not approve the budget within 60 days, it automatically becomes law in its entirety, thus under- cutting the leverage of the parliament. I have no doubt that the same can be replicated here in Nigeria”

By Afe Babalola

On the 20th June 2018, President Buhari signed the 2018 Appropriation Bill into law. When the Bill was presented to the National Assembly on 7th November 2017, it was expected that it would be passed by the end of December and signed into law very early in January. The date of presentation was an improvement on the dates of presentation of the 2017 budgetary proposals which was done in December 2016. It was reported that the Presidency desired a return to the a budgetary circle of January to December as opposed to the current system whereby the budget is passed in the middle of the year. However as reported by a national daily, the hopes of an early passage of the 2018 budget were immediately dashed as the National Assembly stated that it did not expect passage of the budget until April 2018. As it eventually turned out, the Bill was passed on the 16th of May 2018 and transmitted to the President on May 25.

Effect of delay

This delay in the passage of the budget has gradually become an annual one. After it is passed by the National Assembly, the bill must be signed by the President before it becomes law. Without a doubt, the process of making budgetary proposals by the executive and passage of same by the National assembly is a serious one that entails hours of dedicated scrutiny of minute details. However it is expected that at this time of our development, that the process ought to have been refined to avoid the delay which annually affects the process. This delay, as highlighted time and time again, is bound to have grave consequences for the economy. Writing on the subject, Chris Emotoh reported the views of the President of the Nigerian Economic Society, Prof Ben Aigbokhan as follows:

Chairman House Committee on Appropriation, Hon. Mustapher Dawaki; SSA National Assembly, Senate, Senator Ita Enang; Chairman Senate Committee on Appropriation, Senator Danjuma Goje; President Muhammadu Buhari (sitting); Vice President Yemi Osinbajo; Chief Whip House of Representatives, Hon. Doguwa and the Chief of Staff to the President, Mallam Abba Kyari during the signing ceremony of the 2018 Appropriation Bill into law at the State House, Abuja. Photo by Abayomi Adeshida

“…Prof. Aigbokhan explained that when there is a delay …it affects economic growth and many jobs would be lost, thereby saturating the labour market and endangering the economy. According to him, when budget is delayed, the implication is that government may not be able to spend or execute 40 percent of the capital expenditure…Another negative effect of delay budget is that it discourages foreign investors from coming in to invest and that could make them to divert their investment capital to other countries.”

Given the above, one cannot but wonder why there is annually a delay in the process of passing the budget. In 2000, the budget for that year was not signed until the 6th of may although it was presented in December 1999. The table below gives the dates the Budgets since 2008 were signed into law.

S/N   Year of Budget Passed into law

1          2008       April 15, 2018

2          2009       March 10,

          2009

3          2010       April 22, 2010

4          2011       May 27, 2011

5          2012       April 13, 2012

6          2013       February 26,

         2013

7          2014       May 24, 2014

8          2015       May 19, 2015

9          2016       May 6, 2016

Process should be seamless

 

Ideally, the process of the passage of the budget should be seamless as stated by the Central Bank in one of its publications as follows:

“In Nigeria the fiscal year begins on January 1st and ends December 31st. There is, however, no time limit for the National Assembly to consider and approve the budget set before it, although, there is a time limit for the President. This process starts in June with the issuance of a Call Circular from the FMOF to MDAs to submit their expenditure proposals, which are set within the spending limits. A draft Bill is prepared by October by the FMOF and sent to the NASS through the Presidency. Technically, before the legislature’s December recess, the Bill could be passed with any agreed amendments. The President could then be able to authorize the Bill to become law in January. A clause also allows the President to spend from the previous year’s budget, which has to be within the time limit of six months, although there has to be an awaiting appropriation act for the current fiscal year.”

To prevent the unsavoury effects of the constant late passage of the Budget, Nigeria may borrow a leaf from other countries who have evolved efficient ways of passing their budgets. In a publication titled “Legislatures and the budget process” published by the National Democratic Institute for International Affairs an example was given of the situation in Chile as follows:

Budgetary proposals

“The Chilean constitution mandates that the executive provide the legislature its budget 60 days before the end of the fiscal year. While this time- frame is comparable with a number of countries, the consequences of Chilean legislative inaction are especially significant. If the legislature does not approve the budget within 60 days, it automatically becomes law in its entirety, thus under- cutting the leverage of the parliament.”

I have no doubt that the same can and should be replicated here in Nigeria as one constant complaint of the national assembly is that the executive is often late in submitting the appropriation bill for its consideration. Such a provision would ensure that the Executive prepares and sends the Budgetary proposals to the legislature and in good time, while also ensuring that the legislature does not unduly drag on the process of passage of the bill. In addition to this there must be added cooperation between the legislature and the executive in the overall process. The current situation has not been helped by argument on both sides as to the extent to which the legislature can tinker with the bill sent to it by the executive. Such unnecessary issues only to serve to bring about further delay and as current events show, this development is not in the best interest of the citizenry.

 

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