On Budget 2018 – The Nation

  • Cautious optimism marks this year’s effort

The 2018 Appropriation Bill laid by President Muhammadu Buhari on Tuesday November 7 appears to be a new resolve to break with the tardiness that had hitherto characterised the exercise.

It is bad enough that the 2017 budget process kick-started by the President on December 14, 2016, was not signed into law until June 12 – nearly six months after. Just as bad is that the compromise reached on it not only fell apart soon after but has remained unresolved till date. That compromise was forged by the feuding parties in the heat of the disagreements over specific expenditure heads under which the executive could send virement proposals to the National Assembly. Instead of swift action and large-hearted compromises in the context of a recessionary economy, what we had was a turf war over nothing of substance.

The foregoing, aside providing a context to understand the potential fate which awaits Budget 2018, should be seen as a reflection of the absurdity that has reduced the process to a charade.

Set in the foreground of the nation’s exit from recession in the second quarter of the year, the 2018 budget promises to be a make or mar one. We must say of the prognosis that the outlook does look good – on paper. Oil prices have maintained a steady climb. Indeed, last Thursday, Nigeria’s Bonny Light stood at $61.72 a barrel. As for trade, the current year showed a lot of promise with even greater promise in the year ahead.  The National Bureau of Statistics, for instance, put the total value of exports for the first quarter of 2017 at N3,005.9 billion as against imports of N2,286.5 billion. As for the macro-economic environment, it looks just as promising with inflation dropping to 15.98 percent for the eighth consecutive time since January.

More importantly, the 2018 Budget proposal appears to have been tempered with a good dose of realism. If only in the context of the current hunger to fast-track the development process, the entire aggregate expenditure of N8.612 trillion – representing an increase of 16 percent over the 2017 Budget – would seem modest.  Although, that recurrent component would again chalk up a disproportionate share of the pie, taking a whopping N3.494 trillion obviously shows how far the efforts to trim down the cost of governance still have to bear real fruits. The same is applicable to debt service, which at N2.014 trillion comes to a quarter of the entire budget.

To renew the economy, the Federal Government proposes a capital spend (excluding the capital component of statutory transfers) of N2.428 trillion (30.8 percent) of the budget. Merely from the figures, the least that can be said is that they look generally impressive. Power, works and housing, for instance, gets the lion’s share of N555.88 billion; transportation, N263.10 billion; special intervention programmes N150 billion, and defence N145 billion. While the first two, constituting the growth drivers of the economy, deserve the special consideration, security exigencies and the prevalent poverty have rendered the latter two imperative. The same of course can be said of agriculture and rural development with allocation of N118.98 billion and water resources N95.11 billion.

As for education which gets a vote of N61.73 billion, the usual temptation is to deprecate the allocation as “low” when in actual fact, the sum is actually the vote for running the ministry’s bureaucracy! This is where the vote of N109.06 billion for Universal Basic Education Commission, for instance, makes sense.

The point is, nothing can be taken from the administration’s prerogative about what it chooses to see as its priorities. Hence the real issue for us is the haphazard implementation that has tended to reduce the exercise to a charade.

A major factor that would prove critical to implementation is the revenue. Of the total N6,607 trillion projected, oil is expected to deliver N2.442 trillion into the federal kitty while N4.165 trillion is expected from non-oil as well as other revenue sources. For a budget with an in-built deficit of N2.005 trillion, the problem is not so much about the legitimate quest to wean the budget off its overt dependence on oil revenue, but the capacity to collect all due revenues in the situation that tax revenues currently stand at a paltry six percent of the Gross Domestic Product.

A window into the other half of the dilemma was aptly captured by the President when he observed that of the projected pro-rated sum of N605.87 billion expected from independent revenue sources in the 2017 budget, only N155.14 billion was remitted by September –  a 74 percent shortfall. Such a situation can only mean trouble if allowed to persist in 2018. It explains why, barely six weeks to the end of the current budget, capital releases have not exceeded 25 percent.

Finally, the nation waits to see whether the executive and the legislature have learnt useful lessons from the 2017 budget process in terms of being able to forge compromises to give Nigerians a clean and implementable budget. Considering the imperative to ramp up governance, it would be tragic for the feuding parties to allow ego to get in the way of their duty to the country.

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