As Budget Awaits Presidential Assent...
As 2017 Appropriation Bill awaits presidential assent, Vincent Obia looks at issues in its implementation
When on December 14 last year President Muhammadu Buhari presented the 2017 budget to the National Assembly, he tagged it a “budget of recovery and growth.” Buhari is profoundly interested in leading Nigeria out of recession, which the country slipped into about a year ago on his watch. The National Assembly, too, controlled by the president’s All Progressives Congress, is not aloof.
The National Assembly passed the 2017 Appropriation Bill on May 11, with Senate President Bukola Saraki highlighting “the level of consultations and the good working relationship and cooperation that exist between us and the executive for us to get to this point.
This is a remarkable difference from what we saw in 2016 and it shows that the entire country is better for it.”
The National Assembly raised the budget from N7.298 trillion proposed by Buhari last December, to N7.44 trillion. This represents 22.8% more than last year’s budget of N6.06 trillion.
Catch Up
Despite the improved legislative-executive cooperation that went into the passage of the 2017 Appropriation Bill, it is a budget that would be running behind schedule, like virtually all federal government budgets since the inception of the Fourth Republic in 1999.
By the provisions of the 2016 Appropriation Act, the 2016 budget expired on May 5, 2017, having been assented to by Buhari on May 6, 2016. The 2017 budget was passed five days after the expiration of the previous budget. Following Buhari’s medical leave, the acting president, Professor Yemi Osinbajo, has indicated a willingness to assent to the budget when it is received from the National Assembly by the Presidency. No matter how promptly this process is carried out, the government would need to work harder to make up for lost time in the implementation of the budget. It would also have to address the obvious infraction occasioned by the delayed budget.
Chairman of the Senate Committee on Appropriations, Danjuma Goje, was in March quoted as saying regarding the budget timeframe, “As far as the bill that was signed into law by Mr. President is concerned, there will be no mop up on 31st March 2017 since the validity period for the 2016 budget ends midnight May 5th, 2017...“If that is done, it will be a violation of the Act. We carefully created the clause that made provision for May 5, 2017. The Act says that the 2016 budget will run for 12 months starting from the date the bill was assented to and it was assented to on May 6th 2016.”
Chairman of the Senate Committee on Media and Public Affairs, and member of the appropriation committee, Aliyu Abdullahi, blames the delayed passage of the 2017 budget on its late submission by the executive. Abdullahi says the Fiscal Responsibility Act provides that the budget should be presented to the National Assembly by September of the previous year at the latest. But the 2017 budget was presented by Buhari on December 14, 2016, just like the 2016 budget that was presented on December 22, 2015.
Uncertainty
Experts say the lack of uncertainty regarding the timeframe of the country’s budgets is fraught with negative consequences for the economy. “It makes our economy to be unattractive to foreign investors. Foreign direct investors invest all over the world, and developing countries compete for these investments.
The investors look at certain key parameters before they invest,” says chairman of Anchoria Investment and Securities Limited, Chief Olusola Dada.
“In a country where things are not certain, you are discouraging foreign investors, even we, domestic investors. It doesn’t allow for proper planning, because the Nigerian economy is a government led economy. A lot of things depend on government because government is the highest spender.”
Dada, whose company is listed on the Nigerian Stock Exchange, explains, “If the expenditure and revenue cannot be determined in time, the private sector will be affected because, like I said, government is the highest spender and whatever we are doing relies on government, too. So the delay in the passage of the budget is very inimical to the economic progress of this country.”
Abdullahi also acknowledges, “Certainty is very critical for every economy. If you have a certain timeframe, and people know at this time, this would happen, people can use that provision to plan for their businesses.”
Former Deputy Governor of Central Bank of Nigeria, Dr. Obadiah Mailafia, says, “If the economy is to calculate the cost of delaying the budget, it comes to almost 30 per cent of GDP. If it continues to almost half of the year, there is a lot time wasted, and time is money.”