Over the years, the
nation’s budget cycle has been inconsistent without a definite pattern,
giving room for speculations and poor implementation.
According to data
obtained from the Fiscal Responsibility Commission (FRC) 2016 Annual
Reportand Audited Accounts, from 2011 to 2017, the time of approvals of
the budgets is well into the New Year.
The earliest was that of
2013 which was submitted to the National Assembly on Oct. 10, 2012 and assented
to by President Goodluck Jonathan on Feb. 26, 2013, indicating a five month
time lag.
All others were
presented to the National Assembly in December and assented to in April, May or
June.
In separate interviews
with the News Agency of Nigeria (NAN), experts said that the inconsistency does
not bode well for the economy.
Mr Atiku Samuel, Head
of Research, BudgIT, said the economy depends on fiscal, monetary and trade
policies to power it.
“Monetary authorities
look closely at the budget for direction and that is why the Monetary Policy
Committee (MPC) of the Central Bank of Nigeria (CBN), was reluctant
at its first meeting in 2018 to take action.
“Trade policy
formulators sometimes bury decisions inside the budget.
“As such, the budget
is an important planning tool within any functional economy’’, he
said.
He added that
inconsistency in the budget cycle meant that both monetary and trade policy
formulators could not act or take informed actions at the appropriate time.
“That typically
cascades across the economy, making decisions irrational and sometimes
irrelevant.
“The organised private
sector also suffers. For instance, government spending accounts for about 50
per cent of construction related spending.
“If the budget is not
presented and passed at the right time, an
inconsistent pattern follows as we have in Nigeria and players in
that sector will also have to restructure.
“They cannot recruit
in anticipation of an increase in spending and that inevitably kills jobs.
“Some even sack
workers because revenue is inconsistent, as we have seen in
the constructionsector.’’
Samuel said that
inconsistency in the budget cycle also renders fiscal stimulus ineffective and
makes the pattern of spending difficult to trace and follow through.
He added that no
investor likes volatility because it creates huge unmanageable risks.
Mr Eze Onyekpere, Lead
Director, Centre for Social Justice (CSJ), a Civil Society Organisation
(CSO), said the fact that the nation no longer had a fixed budget calendar had
introduced inconsistency and uncertainty into the economy.
He said this trend had
influenced poor economic performance in terms of Gross Domestic Product (GDP),
growth and ability to meet sectoral objectives.
“This has also led to
haphazard budgetary and economic policy implementation. Capital budget
implementation has suffered under this budgeting scenario.’’
He, however, said that
the executive and legislative arms of government had specific roles to play in
rectifying and addressing the budget calendar and implementation challenge.
“First, the executive
have to start the budget preparation process early through the Medium Term
Expenditure Framework (MTEF).
“The MTEF should be
ready for the endorsement of the Federal Executive Council (FEC), on or before
the end of the second quarter (June).
“It should be
submitted to the legislature which should vet and approve of same before
proceeding on their legislative break in July.
“Thereafter, the
executive budget should be ready by the first week of September and submitted
to the National Assembly which will then have four months to approve same
before the end of the year.’’
According to
Onyekpere, there should be a commitment on the part of the legislature to
approve the budget before proceeding on Christmas and New Year vacation.
This, he said, would
enable implementation begin on Jan. 1 of the New Year.
Mr Victor Muruako, the
Acting Chairman FRC, also said the trend reduces predictability and affects
planning even within the Ministries, Departments, and Agencies (MDAs), and with
those doing business.
“It is also not very
encouraging to investors because government being the highest spender, it is
good that there should be a level of predictability’’, he said.
Muruako, however, said
that though the inconsistency was not a good precedent, the commissionwas
working closely with other MDAs, particularly the Ministry of Budget and
National Planning, Budget Office of the Federation and Ministry of Finance to
improve on it.
This, he said was to
ensure stricter compliance with timelines so that the right thing would be done
at the right time.
“It is an evolving
thing and we are not there yet but I believe that with the level of commitment
of the Federal Government, particularly the financial team, I see a silver
lining in the horizon and we will definitely get there.
“We are hoping that we
will soon see a January to December financial year, but there is need to
improve the relationship between the executive and legislative arms of
government, because that is another thing that affects it.’’
He recalled that the
budget was submitted to the National Assembly in the first week of Nov. 2017,
but was only passed by the legislature in May, adding that the legislature had
a greater role to play.
Muruako said there was
the need for better relationship between the executive and
legislature so that there would be synergy.
He also said that if
the legislative arm was involved from the point of formation or articulation of
the estimates, there would not be need for too much scrutiny.
“The theory of
separation of powers is there, but they are supposed to work as one.
“Anytime they are not
working together, it is evident and this is affecting the nation, but I believe
that democracy is still evolving here and we will get there soon,’’ he said.
The FRC report also
said that a strict budget timetable should be incorporated into the
Fiscal Responsibility Act (FRA), 2007.
It said that through
that, relevant agencies would be committed to specific tasks,
timelines and deadlines, which if enforced would help solve the perennial
problem of late preparation and passage.
NAN reports that the
2018 Appropriation Bill of N8.61 trillion proposed by President Muhammadu
Buhari was presented to the National Assembly in Nov. 2017.
It was, however,
raised to N9.12 trillion and passed by the National Assembly on May 16, and is
still awaiting assent by the President.
(NAN)
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