Bumper budget – The Nation

  • But will this translate to bumper ‘harvest’? We are afraid, not necessarily

One would wish it was a bumper harvest rather than a bumper budget. Or better still, one would have preferred that our relatively big budget would imbue us with big results in infrastructure development and measurable growth in our human development indices. But the recently passed 2018 federal budget is, ab initio, tainted with so many irregularities not the least, the offhand raising of the figures by the National Assembly (NASS).

Last Wednesday, the NASS had announced the hiking of the 2018 Appropriation Bill by N508 billion – from N8.612 trillion presented by President Muhammadu Buhari, to N9.12 trillion. This is approximately six percent increase.

While the increase may be considered marginal and insignificant, the import is surely far more deep-reaching than the magnitude of the figures. The additional fund was applied in four main areas viz: debt servicing provision; provision for statutory transfers; recurrent expenditure and development fund for capital expenditure.

Apart from the last item which would impact widely on the populace and direct growth and development, the other items could be classified as ‘negative growth’ provisions. For instance, debt servicing was raised to N2.2 trillion (from N2.014 trillion); provision for statutory transfers rose to N530 billion (from N456 billion); development fund for capital expenditure goes up to an estimated N2.9 trillion  (from N2.7trillion) while recurrent expenditure rose to N3.516 trillion (from N3.494 trillion).

To put it in perspective, more allocation to statutory transfers means that more funds have been made available for the NASS, the Judiciary and perhaps other self-accounting agencies of government to satiate their appetite for cash. Second, it is always a wonder why recurrent expenditure keeps rising in Nigeria while salaries and emoluments are not increased annually. And concerning the burgeoning debts and attendant huge servicing provisions, one would have thought the NASS would think through the need to reduce deficit, thereby reducing borrowings at cost so that debt servicing provisions would reduce.

The big picture, however, is that between huge recurrent expenditure, huge debt servicing allocation and statutory transfers which total about N6.2 trillion, two thirds of the budget is lost! Only one third (about N2.9trillion) is left to achieve any meaningful work.

Beyond the aforementioned issues, the federal budget has remained consistently flawed in its conceptualisation, preparation, debate and implementation for a very long time. First, it took all of six months to get the Appropriation Bill out of the NASS. That is most irresponsible, to put it starkly, for a document which ought to take effect from the first day of the new year as applicable in all serious countries.

This is the most important recurrent bill the NASS has to pass every year; this is the most important catalyst of the economy, yet both the executive and legislature seem to treat it with levity. Thus, for nearly two decades, the federal budget has never met the January 1 deadline. The implications for the economy are dire.

The U.S. budget estimates for 2019 had already been presented to the US Senate in the first quarter of the year so that by the fourth quarter, the entire process is concluded for January 1, 2019 announcement; it’s almost like clockwork; nothing is left to chance; the economy does not stop nor is it kept in abeyance while the executive and legislature bicker about the Appropriation Bill.

It is worrisome that the NASS has beefed up the budget figures to meet the recent increase in crude oil prices by changing oil sales benchmark. It is also difficult to understand why dollar exchange rate was pegged at far below market rate of N305 to $1. That portends enormous subsidy.

Why does the executive wait till yearend to present budget to the NASS and expect it to be ready by new year? Why should every agency of government have to defend budget one by one; why won’t the supervising ministry take all the agencies under it? Why is there never a comprehensive review of the performance of the previous year’s budget? Why does the NASS not do quarterly reviews of budget milestones? How come so much money can be disbursed outside the appropriation document, for instance arms importation and subsidy payments?

A dozen questions trail our budget passage annually and what that means is that we need an entire paradigm shift in our budgeting.

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