₦airaland Forum

Based on official statistics released for Nigeria by the International Budget Partnership on the outcome of the 2017 Open Budget Survey, there is nothing to cheer about for the country in terms of its budgeting process.

According to the survey in which participating countries were assessed based on three pillars of transparency, participation and oversight, Nigeria ranked behind many countries in Africa including Rwanda, Zimbabwe and Liberia.

The Open Budget Index is the world’s only independent, comparative measure of central government budget transparency which assesses, on a biennial basis, the comprehensiveness and timeliness of budget information that governments make publicly available.

In a year that the country was adjudged to have fared better in rankings by global organisations, the 2017 Transparency Open Budget ranking for Nigeria represents a red ink on the country’s score card.

While the government rolled out the drums quite justifiably to celebrate the performance of the country in the World Bank’s Ease of Doing Business ranking from 169th position in 2016 to 145th position in 2017, the 2017 Open Budget Index published recently by the IBP which showed a decline in the case of Nigeria from a score of 24 in 2015 to 17 in 2017 has only served to dampen the drum beats.

In the 2017 survey of African countries, South Africa led on the index and was closely followed by Uganda, Senegal, Ghana, Namibia, Kenya, Morocco, and Egypt.

Among others, one the recommendations of the report, was that the country should ensure that the executive’s budget proposal is made available to the lawmakers at least three months before the start of the budget year.

Experts have said that the timing in the budgetary process cannot be sacrificed on the altar of politics.

In recent times, there have been disagreements between the executive and the National Assembly over the passage of the budget.

In 2017, for instance, Vice President Yemi Osinbajo had expressed disappointment over the inability of the National Assembly to pass the budget on time despite the fact that it was sent by the executive to the lawmakers in December of 2016.

The 2017 budget which was submitted in December 2016 was not passed and assented to until June of last year.

The same scenario is gradually playing out with the 2018 budget which was presented to both chambers of the National Assembly in October and has yet to pass the test of legislative scrutiny.

As a result of power tussle between the executive and the legislature, the budget has always commenced very late into the year.

The 2011 budget, for instance, was passed on March 25, 2011, while that of 2012 was passed on March 14 of that same year.

For the 2013 budget, it was passed by the lawmakers on December 20, 2012 and signed into law by former President Goodluck Jonathan in February 2013 while the 2014, 2015 and 2016 budgets were all signed in the month of May.

For the 2017 budget, it was presented by the executive to the National Assembly in December but passed by the lawmakers on May 11 and signed into law on June 12 by Osinbajo who was Acting President then.

Speaking on the implications of budget delay on the economy, some finance and economic experts said there was need for the Federal Government to put in place mechanisms that would help check the trend.

They added that the development was causing a lot of economic uncertainties that were slowing down inflow of investment into the country.

They said that at a time when the government was working on how to sustain the growth momentum, any delay in passing the budget would affect the level of investor confidence in the country.

The Head, Banking and Finance Department, Nasarawa State University Keffi, Prof. Uche Uwaleke, said while the power tussle between the executive and legislature lingers, such delay was creating fiscal uncertainties which could dampen investors’ confidence.

This, he noted, would present a drag on the current tempo of economic recovery.

He said, “Extant literature support the fact that the timing of the submission of budget proposals significantly affects the quality of analyses and deliberations by the legislature.

“Late submission of the budget bill makes it difficult for the National Assembly to undertake proper scrutiny of the budget and so the approval process is hamstrung by the limited time available for debate.

“As a rule of thumb, a national legislature requires a minimum of three months for effective consideration of the annual budget estimates.”

He added, “From every indication, the 2018 federal budget of consolidation is already running behind schedule like virtually all the ones before it since the return to civil rule in 1999.

“The negative impact of budget delays cannot be overstressed especially on an economy that has just exited a recession. It goes without saying that the undue delay in the passage of the budget creates fiscal uncertainties which could dampen investors’ confidence and present a drag on the current tempo of economic recovery.

“Therefore, the government particularly the executive and the legislature should ensure that the country returns to a predictable budget calendar as quickly as possible.”

Uwaleke said the low ranking on budget transparency was a wake-up call on the government to undertake a comprehensive budget reform that would close the structural and procedural gaps which limit transparency and accountability in the budget process.

In his comment, a developmental economist, Odilim Enwagbara, said there was need for a review of the Fiscal Responsibility Act to make it define properly the timeline for the preparation of the budget.

He said with well-defined timelines for the budget process which must stipulate penalties in case of default, both the executive and the legislature would be forced to work assiduously to meeting with such deadlines.

Enwagbara said the delay in the passage of the budget has serious negative implications for the economy as it would affect both fiscal and monetary policies.

He said in the area of fiscal policy, for instance, the government cannot release funds for the implementation of capital projects, adding that with a huge infrastructure deficit of $350bn, it would be difficult to address such infrastructure gap with delayed budget.

He said, “To delay budget is to delay investments. If you don’t have a new budget ready to take off, how do you spend for capital projects and pay salaries and even run the government

“Nigeria is far behind in infrastructure investments. We have about $350bn infrastructure deficit and if we do not develop our economy by investing massively in infrastructure, then the deficit will continue to grow.

“We are supposed to be passing our budget on time but that is not happening because we don’t have deadlines. In other countries there must be a day that the budget must be signed.

“So if we come up with deadline and the FRA is amended, then that is when we can start having our budget passed on time.”

The Lead Fellow, Institute of Fiscal Studies of Nigeria and former Managing Director of Unity Bank Plc, Mr Rislanudeen Muhammed, told our correspondent in a telephone interview that there was need for the executive to submit the Medium Term Expenditure Framework to the National Assembly on time.

He said that while the delay in the passage of the budget may not have any significant impact on recurrent expenditure since there was a provision that allows government to spend based on previous year’s budget, the capital aspect of the government programmes were usually affected by the delay.

He said, “There is need for all organs of government to put their heads together to ensure that the issue of the budget is worked on time. Particularly, the MTEF should be submitted to the National Assembly as early as June or latest July.

“This will provide the NASS enough time to work on the document in terms of all the underlining parameters for the budget rather than what we are currently witnessing now with the incessant delays.”

Muhammed added, “The NASS and the executive need to work closely to ensure that the budget is submitted, passed and signed latest by December so that implementation can commence in January.

“It is not healthy that we are in May and we still don’t know the fate of the budget. This will affect the implementation of capital projects and it is not good for an economy that is planning to recover from recession.”

The Lead Director, Centre for Social Justice, Mr. Eze Onyekpere, stated that the practice where the annual Federal Government budget is signed into law in the second quarter of each year was inimical to its effective implementation.

He called on the Federal Government to commence the process of enacting a new Public Finance Management Act to address the incessant delays that have characterised the country’s budget process.

The new law, according to him, would also define the framework for engagement of stakeholders in the budget preparation as well as approval processes.

He said, “Lessons need to be learnt from this budget fiasco and this challenge will now be converted into opportunity.

“There is a need for effective legislative collaboration in the preparation and approval of the budget, which may necessitate the amendment of section 81 of the 1999 constitution, enactment of a new public finance management act which sets the rules for budgeting timeframes.

“In the legislature, it is also imperative that the ground rules for the approval of budgets be streamlined and modified so that no set of members of the National Assembly should be in a position to alter the consensus of the majority.”

GavelSlam:
Nigerians don't care about the budget. They are more interested in APC vs PDP because it feels like Man U vs Chelsea.

No, it's wrong to assert that Nigerians don't care about the budget, it's just that there's no difference between when the budget was signed and when it's not signed.
This is the third budget of this administration, what impact has the previously signed and implemented two budgets made on the life and standard of living of the Nigerian populace? Zero.
That's why we did not even notice that the budget has not been signed up till now because there's no impact.

clarocuzioo:
No, it's wrong to assert that Nigerians don't care about the budget, it's just that there's no difference between when the budget was signed and when it's not signed.
This is the third budget of this administration, what impact has the previously signed and implemented two budgets made on the life and standard of living of the Nigerian populace? Zero.
That's why we did not even notice that the budget has not been signed up till now because there's no impact.

Well Said Patriot!

GavelSlam:
Same thing happened the year before.

It was submitted in December but wasn't signed till June.

The problem with many of you is you wish your country bad.

exactly and they want to see good results

GavelSlam:
Same thing happened the year before.

It was submitted in December but wasn't signed till June.

The problem with many of you is you wish your country bad.

the guy made an allegation about economic impact.
I expected you to counter it instead of this your generalized sidestepping.
kindly do his statement justice.
Tnx.