Breaking the 20-year budget jinx

The next level administration of President Muhammadu Buhari has evidently hit the ground running as it makes a historic assent to the 2020 budget by January 1, 2020, thus returning the nation’s budget cycle to January 1 – December 31, the first time since the return to democracy in 1999. This feat is being made possible by the expeditious passage of the budget by the senate last week, approving NI0.59 trillion as aggregate expenditure. The approved figure is N263.946 billion higher than the N10.330 trillion presented to the National Assembly for consideration and approval by President Buhari in October.

A breakdown of the budget figure as approved by the senate indicates N560.4 billion for statutory transfers, N4.84 trillion for recurrent expenditure, capital expenditure provision of N2.46 trillion and N2.72 trillion for debt servicing. The fiscal deficit of the budget is N2.28 trillion while the deficit to Gross Domestic Product (GDP) ratio is 1.52 per cent.

In the approved budget, defence got the highest vote for recurrent expenditure with N784, 589 billion. It also got the highest vote of N116.181 billion for capital expenditure. The education sector got the second highest recurrent expenditure of N490.303 billion as well as N84.728 billion for capital expenditure.

Works and housing sector got the highest capital expenditure vote of N315, 563 billion in addition to its N27.983 billion recurrent expenditure. Key assumptions and parameters upon which the 2020 budget was based include crude oil production of 2.18 mbpd while the benchmark oil price is $57.

According to the budget document, the GDP growth rate is projected at 2.93 per cent while inflation rate is put at 10.81 per cent. The budget is also based on an exchange rate of N305 per United States dollar. When President Buhari presented the 2020 budget proposal to the joint session of the National Assembly in October, he stated: “The expenditure estimate includes statutory transfers of N556.7 billion, non-debt recurrent expenditure of N4.88 trillion and N2.14 trillion for capital expenditure (excluding the capital component of statutory transfers).” He had also proposed N2.45 trillion for debt service, and sinking fund to retire maturing bonds issued to local contractors was voted N296 billion.

Presenting a report to the senate earlier, Chairman of the Appropriation Committee, Barau Jibrin, disclosed that his panel worked harmoniously with the executive arm of government in the processing of the bill “which ensured the collaboration of the two arms in the utilisation of additional revenue projections to fund/improve the funding of some critical projects, which could not be adequately funded in the budget proposals submitted by Mr. President due to constraints.

“Consequently, the increase allowed for interventions in critical areas such as national security, road infrastructure, mines and steel development, health, social needs, and water. This is also in line with the budget thrust of the government which is sustainable growth and development,” Jibrin said.

The lawmakers took turns to advise the executive arm of government on the execution of the projects provided for in the budget. Former Deputy President of the Senate, Ike Ekweremadu, drew attention to the ravaging problems of poverty and unemployment in the country, pointing out that the diligent execution of budgets would be helpful in resolving the challenges.

Fatai Buhari (APC, Oyo state) stated: “We must take oversight duties very seriously to ensure that the gains recorded in passing this budget timely are actualised.” Bassey Akpan (PDP, Akwa Ibom) said President Buhari had no business to fail because “we passed this budget in time and we have amended all laws to ensure improved revenue base. So all the committees must go to work to ensure that revenues expected are realised.”

In the House of Representatives, the lawmakers also passed the 2020 budget to the tune of N10, 594,362, 364,830 trillion. The decision followed the adoption of the report of the appropriation committee submitted by the chairman, Mr. Muktar Betara, at the plenary presided over by Speaker Femi Gbajabiamila.

Highlights of the bill showed an addition of over N260 billion to the N10.33 trillion proposed by President Buhari. A breakdown of the bill shows that N560.47 billion is for statutory transfers, N2.72 trillion is for debt service, N4.84 trillion is for recurrent (non-debt) expenditure while N2.46trillion is for to the development fund for capital expenditure for the period starting January 1 to December 31, 2020.

The federal ministries of works and housing, power as well as agriculture and rural development and defence got the lion share of N315.56 billion, N129.08 billion, N124.39 billion and N116.18 billion. A further breakdown of the statutory transfers shows allocation of funds as follows: National Judicial Council N110billion Niger-Delta Development Commission (NDDC) N80.8 billion and Universal Basic Education (UBE) N111.7 billion, National Assembly N128 billion, Public Complaints Commission N4.7billion, Independent National Electoral Commission (INEC) N40 billion, National Human Rights Commission N2.5 billion, North East Development Commission N38. 49 billion, and the Basic Health Care Fund N44. 49 billion.

The early passage of the 2020 budget is, indeed, a highpoint for the Buhari government as it has not only broken a 20-year-old jinx but has also untangled one of the major obstacles to the effective and pragmatic implementation of successive budgets in the country. Notwithstanding this breakthrough in the nation’s budgeting system, we urge all the relevant agencies to step up their game by ensuring the religious and holistic implementation of the fiscal document.

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