A budget in times of crisis
PRESIDENT MUHAMMADU BUHARI Friday signed the revised N10.8 trillion 2020 budget passed by the National Assembly in June.
The new budget signed into law provides for aggregate expenditures of N10.81...
PRESIDENT MUHAMMADU BUHARI Friday signed the revised N10.8 trillion 2020 budget passed by the National Assembly in June.
The new budget signed into law provides for aggregate expenditures of N10.81 trillion, which is an increase of N216 billion over the level of expenditure initially proposed in the 2020 Appropriation Act.
The president gave the rationale for the revision of the budget as the need to provide adequate response to the adverse effects of Covid-19 pandemic on the nation’s economy. Accordingly, he said said ministries, departments and agencies (MDAs) would receive 15 per cent of their capital allocations at the end of the month.
It is important to stress that this year’s budget is a budget like no other before it. This is a pandemic containment budget which must make its mark on both the citizens and the nation’s health infrastructure. There is no gainsaying the fact that the economy is on the brink of another recession; businesses are stuttering while massive jobs have been lost in the lastb three months.
It is, therefore, imperative to reallocate resources to high need areas such as the health sector, job creation initiatives, agricultural and food chain sector, among others, which are critical to the well being of the citizens at this time. Important too is the need to work out economic stimulus response and package for industries and individuals who have been pulverised by the pandemic. It is the economic stimulus package for industry and business that can re-engage those out of job as well as help businesses back on their feet.
There is therefore a need for an alignment of this budget with the recommendations of the Economic Sustainability Committee headed by vice president Yemi Osibajo which recently submitted its report to the president.
The committee was specifically charged to develop a clear economic sustainability plan from now till 2023, identify fiscal and monetary measures to enhance oil and nonoil revenues in order to fund the plan, develop a stimulus package and come up with other clear-cut measures to create more jobs while keeping existing ones.
Like the report notes, about 39 million jobs may be lost by the end of the year if mitigants are not put in place. Not just that, the gross domestic product (GDP) may fall into a negative of between -4.4 percent abd -8.91 percent. This would have the effect of eroding whatever modest economic gains we may have recorded over the years.
“In addition, the inevitable mandatory lockdowns and social distancing measures put in place to curb the spread of COVID-19 have had a severe negative impact on farms and factories, as well as on trade, transport and tourism, Osibajo said while presenting the report to the president.
Among a plethora of strategies suggested by the committee, agriculture, housing and provision of reliable power were recommended to prevent serious economic dislocation in the country. The Plan, tittled ‘Bouncing Back: The Nigerian Economic Sustainability Plan,’ also recommended lending support to the informal and small scale business sectors for job creation purposes.
Other recommendations contained in the report include the mass cultivation of between 20,000 and 100,000 hectares of new farmlands in each state, provision of around 300,000 housing units annually and the connection of more than 5 million offnational grid homes to solar power.
These are the critical areas of our national life that require urgent interventions and policy actions to reduce, if we cannot stave off, the effect of another prolonged recession which may bring the nation down on its knees. Already, food prices are high while healthcare is in crisis. Some fast steps must be taken.
While the federal government and the Central Bank of
Nigeria have taken the lead in the national response to the pandemic, there is still more to be done. The Covid-19 Support Facility of the CBN has been exhausted. New funds need to be made available to help more households and businesses relaunch themselves.
Fortunately, the president appreciates the enormity of the challenges collectively facing us. On Friday while signing the new budget, he said: “The 2020 Amended Budget, which I have just signed into law today, underscores our Administration’s firm commitment to effectively contain the spread of COVID-19 and protect the lives and livelihood of our people. With these budget amendments, as well as our recently launched N2.3 trillion Stimulus Programme, we are well-positioned to safeguard the economy.
“Considering recent budget implementation challenges, I have directed that efforts be made to ensure effective implementation of the Appropriation (Repeal and Amendment) Act, 2020 in order to realise its laudable objectives. All Ministers are to ensure that their Ministries, Departments and Agencies intensify capital project delivery efforts and fully cooperate with the Ministry of Finance, Budget and National Planning to achieve the laudable objectives of the Budget”.
Budgeted funds must be promptly released so that economic activities can be revved up. This has the effect of creating jobs and providing livelihood for many people.
This is not a budget to be misapplied or lavishly looted.