Nigeria’s Fiscal Year has since Independence in 1960, remained between January-December, and, senior citizens, may indeed, recall the annual ritual of budget speeches, by the Prime Minister or later Heads of State, on New Year’s Eve or shortly before December 31st, while the nitty-gritty and specific details of each year’s budget would be revealed, soon after, by the respective Finance Minister, who would announce changes in tariffs, taxes and other government economic policies that would prevail in each Fiscal Year.
Invariably, with such a schedule, budget implementation could commence, annually, from the, 1st day of January, so that 12 full months, would be available for comprehensive implementation of Government’s expressed intentions and policy directions. Instructively, when budgets are promptly enacted, stakeholders, such as investors, the Organized Private Sector and Labour would also have the opportunity to align their activities with government’s expectations.
In retrospect, however, since the return to Civil Administration in 1999, the process of budget presentation and final Presidential assent, has regrettably, wobbled without rhythm, and has consequently, significantly frustrated comprehensive budget implementation, notwithstanding the adverse collateral of partial implementation, on the economy and social welfare.
Curiously, since 1999, the 2001 and 2007 budgets, which received Presidential assent before the Christmas break are the only fiscal plans assented to before 1st of January. It is notable that both plans were laid before the National Assembly, earlier in October.
The other notable, relatively prompt Presidential assent was the 2013 budget, which the National Assembly received on 10th October 2012, but which later became Law on February 26th 2013, i.e. after over 4 months in the pipeline. Furthermore, the 2002 and 2009 budgets, belatedly, respectively received Presidential assent in March, while President Olusegun Obasanjo, also assented to budgets 2003-6, later in April of each Fiscal Year.
Similarly, the budgets for 2008, 2010, and 2012, all received Presidential assent in April. Furthermore, President Goodluck Jonathan’s 2014 & 2015, budgets also received Presidential assent, late in April, while the 2011 Appropriation bill became law as late as 26th May; i.e. after almost 50% of the year had expired! Notably, assent to President Muhammadu Buhari’s 2016 and 2017 budgets, similarly, suffered extended delays till June, while PMB’s 2018 budget, also ultimately, received Presidential assent, in June 2018; i.e. over 7 months after the appropriation bill was laid before the NASS on 7th November 2017.
In summary, 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 objectives of that government becomes largely unattainable, particularly the capital component, which drives improved public infrastructure and social welfare, would be partially and hastily implemented.
Although, consolidated annual budgets have steadily risen from N705.036bn (i.e. $8.2bn @ $1=N85.98) in 2000 to well over $31bn between 2011-14, however, the improvement in the social welfare of our people has, sadly, remained marginally impacted; incidentally, however, the claim of marginal improvement may not even be corroborated by the Washington based 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 upto 6 persons every minute!
Indeed, recurrent expenditure, such as wages/salaries and general consumables, still stubbornly remain closer to 70% of total budgets, despite public expectation that the present Administration would tilt the consolidated budget, in favour of relatively larger capital budgets, to fast track rapid infrastructural enhancement.
Curiously, the anticipated reduction in sleaze in public finance with the curtailment of 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 the reported increasingly sanitized, procurement process, annual recurrent expenditure has ironically remained sticky around 70 percent of 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. Yemi Osinbajo boasted of a planned N8tn plus expenditure for this administration’s first budget in 2016; this was in contrast to the relatively modest N4.493tn 2015 budget with a N1,041bn deficit, which invariably increased the pressure of an already oppressive national debt burden, with a fresh loan of N953bn to fund the budget.
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 N4.493tn budget, on which debt service charge, was already reportedly, gulping over N50 out of every N100 of government income.
Instructively, however, Section 81 of the 1999 Constitution mandates the President “to cause to be prepared and laid before the National Assembly, estimates of revenues and expenditures of the Federation, for the next or following financial year, at any time in the Financial Year.”
Consequently, since 1999, successive Presidents have persistently laid their budgets, very late in the year, albeit within the ambit of the open-ended constitutional schedule. Expectedly, however, late budget presentation often leads to late approval which, significantly, distorts successful budget implementation. It is inexplicable, for example, that although the federal budget has exploded from a mere N701bn ($8.2bn) in year 2000 to N4.493tn in 2015, N7.44tn in 2017, and N8.612tn in 2018 respectively, the stupendous increase in government expenditure has, regrettably, failed to enhance inclusive economic growth, while the critical objectives of poverty reduction and higher level of employment have also remained elusive.
Indeed, since successive Administrations, have also failed to adopt the discipline and international best practice of early submission and assent to annual fiscal plans, it would be 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 annual fiscal plans. 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, (i.e. at least six months before the New Year) there may be no end to the extended delays that impede budget implementation; in such event, there can be no reprieve, from the increasing challenge of rising unemployment, deepening poverty and decayed infrastructure.
Instructively, if the Legislative and the Executive arms of government strictly adhere to the established Medium Term Expenditure Framework, (MTEF), which is hived from the trunk of Government’s Economic Recovery & Growth Plan (ERGP), the process of budget preparation and assent will, certainly, become facilitated so that implementation would appropriately commence as from the 1st of January of each Fiscal Year. Arguably, the progressive goals of government will be more easily attainable with early assent to budget, so that more Nigerians will enjoy improved social welfare.
END
Whose fault is it when the House is said to demand bribes before passing the budget?