The Federal Government recently faulted the addition of N90.3bn to the 2019 budget by the immediate past 8th National Assembly (NASS). The government also observed that the action of the lawmakers would adversely affect the implementation of the budget. The budget estimate sent to the legislature by President Muhammadu Buhari was N8.83trn. But the legislature approved N8.92trn.
Although the President has assented to the budget, government is worried about how to raise additional N102.84bn to bridge the funding gap created in the 2019 budget as a result of the increase of N90.3bn by the 8th NASS.
The Minister of Budget and National Planning, Udoma Udo Udoma, who shared the President’s concern, said the additional amount had raised the budget deficits by N58.83bn. This, he said, would make the government look for alternative means of containing rising deficits. The government also claimed that the last legislature reduced government’s proposed borrowing from N1.649trn to N1.605trn, thereby creating an overall unfunded deficit of N102.83bn. Therefore, in order to fully fund the 2019 budget, the government must increase its borrowing.
The rift between the Executive and the Legislature over budget issues is well-known. Just before the 9th NASS was inaugurated last week, President Buhari had accused the 8th NASS of padding debt figures to be repaid by the Federal Government to some states. The Legislature through the immediate Speaker of the House of Representatives, Yakubu Dogara, explained that the legislature had the oversight power to either increase or reduce appropriations sent to it.
While the government is willing to engage the newly inaugurated National Assembly to address the budgetary anomalies, Nigerians and the business community are concerned about the effects of poor implementation of the budget, especially the capital components, on the economy and the general well-being of Nigerians. The poor implementation of the budget has underscored the urgent need for greater transparency and accountability in budgeting. Lack of cooperation between the two arms of government has caused delays in releasing funds for the implementation of the capital components of our budgets.
It is unfortunate that half way into the fiscal year, the implementation of the 2019 budget is yet to begin. Sadly, this has been the main problem of successive budgets. It is not healthy for the development of the country. Proper budget execution demands that funds be quickly released for the execution of capital projects to reduce the time between budget approval and implementation. We are concerned that the present Appropriation Act may suffer from poor implementation, especially now that there is fear of another recession. There is need to put in place appropriate fiscal and monetary policies.
It is disheartening that in the last five years, the Federal Government budgets have not been able to achieve up to 30 per cent implementation. From the administration of former president, Olusegun Obasanjo, to the present administration, none has been able to keep to the promise of ensuring 70:30 ratio for recurrent and capital expenditure. In fact, the Obasanjo administration promised 60:40 ratio. There is no doubt that full implementation of the capital components of the budget would lead to economic growth.
It is apparent that the full implementation of the 2019 budget will be daunting. There may be a rollover of capital expenditure from last year’s budget to 2019 budget. Such a plan may delay the implementation of the 2019 budget and the pace of economic development in the country, which is currently sluggish. We believe that little will be achieved if the capital components of the budget are poorly implemented. It is only when the capital components of the budget are realised that economic development can be achieved.
With the inauguration of the 9th NASS, we urge the presidency and the legislature to bridge the funding gap in the budget so that implementation will start in earnest. Government should ensure that the overall revenue performance meets the optimum target. The 55 per cent performance for 2018 budget was far short of target largely because of revenue shortfall.
We enjoin the government to reduce the size of the recurrent expenditure and increase the capital expenditure. It should also begin the much-anticipated January to December budget cycle. This will hasten the socio-economic development of the country and greater budget implementation.
