2020 Budget: Now that the stage is set…

For the National Assembly members, this is a week that they cannot forget in a hurry. They deserved a huge pat on the back and they got exactly that from Nigerians including, of course, President Muhammadu Buhari, who did not attempt to downplay the significance of the lawmakers’ effort.

Why do the lawmakers deserve pat on the back? They have fulfilled their promise to swiftly pass the 2020 budget in December 2019.

Expressing his delight over the with the development, the president said: “I am very pleased that the National Assembly worked uncommonly long hours in the interest of our people and the national economy to ensure detailed legislative review and passage of the Budget within two months. This patriotic zeal adopted by the Ninth National Assembly has restored our budget cycle to a predictable January to December fiscal year.

“Furthermore, in the 20 years since the return to civilian democracy, this will be just the fourth time that the Federal Budget was passed before the end of the previous year, and this is the earliest. For these achievements, I must, therefore, congratulate and thank the Distinguished Senate President, the Right Honourable Speaker and, indeed, all members of the federal legislature for their commitment and support.”

Passing the budget in record time, just as it should be, is a thing that has not been done in a long time in this country. In fact, that happened only three times since the return to democracy in 1999. Above all, the federal lawmakers deserve a pat on the back, for especially cooperating with the Buhari-led administration to return the country’s budget cycle from January to December.

Soon after the lawmakers completed their work and sent him the appropriation bill, the president, expectedly, did not waste time to assent to it.

Signing the Appropriation Bill into law at the Aso Villa in the presence of key officials of government including Vice President Yemi Osinbajo; Senate President Ahmad Lawan; Speaker of the House of Representatives Femi Gbajabiamila; Secretary to the Government of the Federation Boss Mustapha, Finance Minister Zainab Ahmed and presidential aides, the president directed that the 2021 budget plan be submitted to the lawmakers in September 2020.

The president also thanked the Ninth National Assembly for supporting important legislations such as the Deep Offshore and Inland Basin Production Sharing Contract Amendment Act as well as the 2019 Finance Bill. According to him, these laws are vital to the successful implementation of the 2020 Budget.

The president said he had instructed the Ministry of Finance, Budget and National Planning and other Ministries, Departments and Agencies (MDAs) to ensure that the 2020 Appropriation Act is effectively implemented.

Although the planning stage is the most important process, the implementation stage is where the action takes place, which makes it very essential. And, truly, implementation has, for too long and for no good or justifiable reasons, remain the bane of budgets in Nigeria. In fact, it has become common to hear discussions and comments on low budget implementation, making one to wonder if budgets are meant to be partially implemented. The unfortunate gap between budgets and their implementation, no doubt, contributes to the country’s poor economic development.

Undoubtedly, corruption is the first and prime problem that the Nigerian budget implementation process is faced with. Corruption has eaten deep into the roots of the Nigerian system that, until the coming of the Buhari-led administration, fighting it looked almost like a lost battle.

Government officials entrusted with public funds think about themselves first and misappropriate the funds carelessly. They stash the funds in their private accounts in Nigeria and foreign lands, building enough money pile to last generations. They see government office as a goldmine, hence, the budget implementation suffers since the real purpose the money was disbursed for was not achieved, or was poorly achieved.

Often times, projects inserted into the budget are elaborate and unrealistic. When such budgets enter the implementation phase, these white elephant projects become difficult to execute. They often drag and are passed over from budget to budget, effectively affecting the overall performance of such budgets. We often hear of 60%, 55% budget performance, and the likes which indicate the government spending for that fiscal year falls well below the intended and approved limits.

Yet, both the legislature and executive arms share the blame for delay in submission of and passage of budget estimates and this development, it can be said, partly account for poor budget implementation. Often, the usually prolong deliberations on the appropriation bill submitted by the executive stood as the major reason for the poor and ineffective implementation of the budget.

No doubt, the delay in budget approval and implementation affects fiscal planning in private and non-formal sectors of the economy whose projections and plans are usually predicated on federal government’s allocation to MDAs.

However, an end must be brought to the culture of delay and poor

implementation of the country’s budget and, in this regard, the president must be commended. This objective can be ralised through development of a more transparent, effective and inclusive budgetary process. This means that all the relevant bodies, agencies, civic organisations, and societies, as well as financial experts, are carried along during the process of developing the national budget. This will help to significantly improve budget performance

Also, methods of ensuring adequate supervision of projects executed should be put in place. It is not just enough for the government to approve and release money for projects. There should be a proper monitoring of the execution of these projects at all stages so as to prevent fraud and poor execution.

The total appropriation for spending in the 2020 Budget is N10,594,362,364,830. From that amount, the sum of N560.47 billion is for statutory transfers while N2.7 trillion is for debt service.

Other breakdown of the budget include N4,842,974,600,640 for recurrent expenditure; capital expenditure of N2,465,418,006,955; fiscal deficit N2.28 trillion and deficit/GDP of N1.52 percent.

The budget fixed Nigeria’s daily oil production rate at 2.18mpb and increased the oil benchmark price to $57 per barrel from 55 dollars proposed by the executive.

Realistically, the budget has an inflation rate of 10.81 percent and fixed exchange rate at N305 to a dollar.

Since the budget is to some extent to be financed through borrowing, the president said he will submit the borrowing plan to the National Assembly soon, and urged the lawmakers to, in the manner they passed the budget, ensure its quick passage.

The president expressed confidence that the government would be able to finance the budget, as planned. He said: “Now, we are well positioned to effectively implement the budget and deliver our promises to Nigerians. Businesses will also benefit as they are now in a position to plan more effectively. We have to sustain this harmonious working relationship. I expect that, going forward, this will be the norm.

“I will work with the Ninth National Assembly to give effect to the constitutional, legislative and other actions that may be necessary to address the various challenges currently associated with our federal budgeting process, including the enactment of an Organic Budget Bill….With today’s global oil market outlook and our strategic approach to revenue growth, we are optimistic that we will be able to finance the 2020 Budget.”

It is our hope and prayer that things would work out as planned.

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