Breaking News
Translate

Where is budget 2019?

By Henry Boyo

NiIGERIA’s fiscal year has remained between January-December, since Independence in 1960, and, indeed, senior citizens may recall the ritual of budget speeches, by the Prime Minister or later President, on New Year’s Eve or shortly before December 31, while the nitty-gritty or specific details of each year’s budget would be revealed, usually, soon after, by the respective Finance Minister, who would capture changes in tariffs, taxes and other government economic policies that would be adopted for each year.

budget

Yuletide: South east deplorable roads attract attention of executive, legislature

Invariably, with such arrangement, budget implementation could commence annually on the 1st day of January, so as to allow 12 full months for comprehensive implementation of Government’s expressed intentions and policy directions. Furthermore, when budgets are promptly enacted, stakeholders, such as investors, Organized Private Sector and Labour would also have the opportunity to align their activities and expectations with government’s positions in each year’s budget.

Regrettably, in retrospect, however, since the return to Civil Administration in 1999, the process of budget presentation and final Presidential assent, has wobbled without rhythm, and consequently, largely, frustrated comprehensive budget implementation every year, notwithstanding the adverse impact of such partial implementation, on the economy and people of Nigeria.

Curiously, since 1999, the only Presidential assent to any fiscal plan before the 1st of January was, invariably, the 2001 budget, which received Presidential assent before the Christmas break on December 21, 2000. Similarly, the 2007 budget, was also laid before Parliament on October 26, 2006, but also became Law, eighty-two days later on December 22, 2006.

The notable, other early Presidential assent was the 2013 budget, which the National Assembly received on October 10, 2012, and which later became Law on February 26, 2013, after over four months in the pipeline. Furthermore, however, the 2002 and 2009 budgets were, belatedly, also assented to by the respective Presidents in March of each fiscal year, while President, Obasanjo, in turn, assented to budgets 2003-6, in April of the respective Fiscal Years.

Similarly, the budgets for 2008, 2010, and 2012 ultimately received Presidential assent in April of these Fiscal Years, while the 2011 Appropriation bill became law as late as 26th May; i.e. after almost 50% of the year had expired! In the same vein, President Jonathan’s 2014 & 2015, budgets received Presidential assent in April of each year, while President Buhari’s 2016 and 2017 budgets similarly suffered extended delays before assent in the Fiscal Year. Regrettably, PMB’s 2018 budget received Presidential assent as late as June 2018; i.e. over seven months after the National Assembly received the appropriation bill on November 7, 2017.

In summary, therefore, almost all budgets, with the exception of 2001 and 2007, suffered protracted and unnecessary delays before approval. Instructively, however, when a budget is delayed for a significant portion of its operational year, the plan objective of such government, particularly with regard to the implementation of the capital component, which largely drives improved public infrastructure and social welfare, becomes largely unattainable.

Although, consolidated annual budgets have steadily risen from $8.2bn (N705.036bn @ $1=N85.98) in 2000 to well over $31bn between 2011-14, the social welfare of our people may have only been marginally impacted; incidentally, the claim of marginal improvement is, however, not supported by a Washington based Economic think-tank, in the Brookings Institute’s recent report, which identified Nigeria as the World’s Poverty Capital, where the number of people who earn below $2/day increase by up to six persons every minute!

Indeed, despite public expectation that the present Administration would tilt the consolidated budget, in favour of relatively larger capital budgets, so as to fast track rapid development, regrettably however, recurrent expenditure, such as wages/salaries and general consumables, have remained largely closer to 70% of total budget.

Inexplicably, also, despite the expected reduction in sleaze in public finance and the deliberate, and wasteful duplications in public expenditure, plus the reported savings from removal of hundreds of thousands of ‘ghost workers’ from Government’s payroll and an allegedly sanitized procurement process , annual recurrent expenditure has remained bloated and sticky around 70% of total budget.

Indeed, an early indication that the present Administration’s grasp of the nature and conduct of Nigeria’s economy was suspect, became evident, very early in its tenure, when V.P. Osinbajo boasted of a planned N8tn plus expenditure for their first budget in 2016, in contrast to the relatively a more modest 2015, N4.493tn budget which had, a provision for over N1,041bn deficit, which would already required about N953.62tn additional debt to invariably increase the pressure of an already oppressive debt burden.

Fortunately, good sense, later prevailed and the 2016 budget size was ultimately cut back to N6.06tn, even though, this was still a steep slope from the relatively more modest 2015 consolidated budget of N4.493tn, in which debt service charges, already gulped over N50 out of every N100 real income that government earned.

Instructively, Section 81 of the 1999 Constitution mandates the President “to cause to be prepared and laid before the National Assembly, estimates of the revenues and expenditures of the Federation for the next or following financial year, at any time in the Financial Year.”

Notably, successive Presidents have since 1999 persistently laid budgets very late in the year. Expectedly, however, late budget presentation often leads to late approval which, significantly, adversely distorts budget implementation. Consequently, for example, although the federal budget exploded from N701bn in year 2000 to N4.493tn in 2015 and N7.44tn in 2017, and N8.612tn in 2018 respectively, government expenditure has, regrettably, failed to improve the quality of inclusive growth positively, while the objectives of poverty reduction and high level of unemployment have also remained elusive.

Indeed, since successive Administrations, have so far failed to adopt international best practice of presenting budgets, early enough, before commencement of the new fiscal year, it has become advisable to make early passage of the Appropriation Act mandatory.

Thus, Sections 81 (1) and 82 of the 1999 Constitution and 2007 Financial Reporting Act would require urgent amendment to fast track Presidential assent and implementation of the fiscal plan.  Notably, however, in the absence of such a definitive Act that makes it mandatory for the National Assembly to receive the Appropriation bill before, say, 30th June every year, there may be no end to the extended delays that impede implementation of annual fiscal plans; in this event, there would be no reprieve, either, from the increasing challenge to rising unemployment, poverty reduction or indeed, to any significantly improved social welfare for more Nigerians.

Instructively, if the arms of government remain loyal to the established Medium Term Expenditure Framework, (MTEF), which derives from the umbrella of the Economic Recovery & Growth Plan (ERGP), is strictly complied with, the process of budget preparation and assent will certainly become facilitated so that implementation would properly commence as from the 1st of January of each Fiscal Year to achieve the progressive goals of government!


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.