THE 2018 BUDGET PROCESS: A PARADIGM SHIFT

A return to January-December cycle will facilitate the implementation of the 2018 budget, argues Dominic O. Ekpemauzor

President Muhammadu Buhari, on Tuesday, November 7, 2017 presented the 2018 budget estimate of N8.612 trillion to a joint session of the Senate and the House of Representatives. Apart from submitting the budget proposal on time, the president indicated his administration’s intention to restore the budget cycle to the January-December fiscal year, thereby taking a stance that will infuse a sense of urgency, seriousness and commitment into the entire budget process of preparation and presentation, appropriation, fund release, implementation and monitoring. The president should therefore be commended, encouraged and supported.

This piece, which is not a technical review of the 2018 budget, will focus on strengthening the budgeting process, and improving the process effectiveness and sustainability of the 2018 budget and future ones. We will take the budget estimates, targets, projections, as given and as signposts towards which to strive, and as basis for performance evaluation. Since no one can really claim to have a crystal ball, one’s concern is more on the intent behind these estimates and the mobilisation of all efforts and resources towards their realisation.

Budget timelines are critical aspects of the budgeting process and yet previous efforts seemed to have ignored this fact. The 2016 budget for example, was submitted late and passed into law very late. The fate of the 2017 budget was no less different. Most previous budgets followed this trend of late presentation and passage and consequent low implementation, resulting in rollovers and distortions. It seems the 2018 budget will be a departure from this ugly trend, as indicated by the president’s early presentation of the 2018 budget proposal.

Early presentation of the budget is predicated on early collation of inputs and preparation of the budget. Therefore, the presentation of the 2018 budget should automatically mark the commencement of the preparation of the 2019 budget estimates. The momentum garnered in the preparation of the 2018 budget should be carried over to 2019, by deploying the necessary technical expertise, knowledge, skill and commitment as well as providing an environment devoid of excessive bureaucracy and political distraction. Furthermore, the 2019 budget estimates should draw extensively from existing plans and documents such as the 2018-2020 Economic Growth and Recovery Plan (EGRP) and the Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF) 2018-2020, coupled with update scans of the global and domestic environments. Any resulting budget estimate, which of course, must be subjected to realism test, will undergo continuous refinement as new performance data and information become available. A timeline of say, the second quarter of the year 2019 could be set as a target date to produce a zero draft of the budget. Thus, such an early start and continuous revision of fundamental assumptions, data and focus, based on available, new and empirical data, will to a large extent, guarantee the sustainability of early preparation and presentation of subsequent federal annual budgets.

As already mentioned, the 2017 Appropriation Bill came into being after several months. It is therefore pleasing, to note that the Senate President, Abubakar Bukola Saraki, in his remarks at the joint session, assured that the National Assembly, will work to “ensure that these are passed by the end of the year’’. The implication of the Senate president’s commitment is that, the appropriation bill could become law by December 2017, thereby actualising the proposed change to the January-December fiscal year.

Acknowledging that budget appropriation involves a rigorous and painstaking process of quantitatively and qualitatively reviewing every item in the budget, before allocating and approving same for expenditure, we urge the National Assembly to strive towards the specific timeline of passing the appropriation act by December 2017, as promised by its leadership, as this will provide an early spend opportunity for the economy that is just emerging from a recession.

The ministries, departments and agencies (MDAs) of the federal government should strictly comply with their budget defence timelines and do the needful. As noted by the senate president, submission of the federal budget along with those of the MDAs will definitely facilitate deliberations on the budget. If this was not done for the 2018 budget, then subsequent budget presentations should align with this idea.

In order to support the appropriation process and ensure process sustainability and continuity, we suggest the establishment of a National Assembly Budget Office, if none currently exists. Such an Office will serve as a think-tank for the legislature on budget and related matters, and should be manned by experts and professionals who are non-partisan, liaising with the relevant MDAs and the House Committees on Budget and Appropriation, and acting as technical and operational bridge builders on budget issues. This outfit will be similar to the US Congress Budget Office. Such an office will undertake the technical reviews, assessment and evaluation of the budget and make same available to the National Assembly as the need arises, thereby freeing sufficient time for the parliamentarians to focus expeditiously on the political economy of the budget, which is really what the appropriation process is all about. An additional way of minimising the enormous amount of time wasted on this aspect of the budget is by improving the working relationship between the presidency and the legislature. The recent positive signals from both parties are encouraging and should be strengthened and sustained.

The senate president, while committing to the early passage of the 2018 Appropriation Bill, stressed the criticality of transparency, fund adequacy and early fund release in the success of the overall budget process, and this cannot be overemphasised.

Late fund release and protracted appropriation deliberations could be attributed partly to revenue limitations. Therefore, a substantial part of 2018 budget discussion should centre on ways to unlock additional revenue potential in the economy, for both federally-collectible revenue and federal government independent revenue sources. Hitherto, budget considerations and discussions have been biased towards the expenditure side; it is time to shift emphasis towards diversifying, increasing and strengthening the revenue side of the budget. Such a shift will in the long-run, increase the size of the budget, reduce deficit and debt levels, and ensure early release of funds, projects completion and overall reduction in project abandonment. Ekpemauzor wrote from Abuja