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Economic Implications Of Another Budget Impasse
Once again, just like the 2017 budget which was signed into law in June of that year, the passage of the 2018 budget of N8.6trillion presented to the joint session of the National Assembly in October, 2017 by the presidency, is already in danger of being over-delayed, as it is obvious the April deadline proposed by the lawmakers is no longer feasible. This, to all intents, has far reaching economic implications for the country.
Many Nigerians had expected that the budget will not suffer similar fate as the previous one because of earlier assurances by the National Assembly that it will fast track the passage. But, the passage of the budget has missed the April target proposed by the Speaker of House of Representatives, Hon Yakubu Dogara. Also, the Senate had said recently that its Standing Committees were yet to submit reports to the Appropriation Committee, chaired by Senator Danjuma Goje. They blamed heads of Ministries, Departments and Agencies (MDAs) for not submitting budget details.
Although the 2018 budget contains the funding plans of ministries, the National Assembly wants government agencies such as the Central Bank of Nigeria, CBN, Nigerian National Petroleum Corporation, NNPC, Securities and Exchange Commission, SEC, etc, to submit their budgets to enable the legislators pass them alongside the national budget. The MDAs’ budgets are not usually included in the national budget but the National Assembly is insisting that the MDAs should submit their budgets to ensure passage of the same, together with the national budget. The practice in the past was that the legislators would pass the national budget and then wait for each agency to submit its budget for passage. Analysts said politics has slipped into governance and that the delay has more to do with the ongoing altercation between the Executive and Legislative arms of government.
This same situation is also affecting the reporting speed of most standing committees to the Committee on Appropriation. Most of the lawmakers are said to be angry with the President over his refusal to sack the acting chairman of the anti-corruption agency, the Economic and Financial Crime Commission, Ibarahim Magu, in accordance with the legislators’ recommendation. Last year, the lawmakers refused to approve the appointment of Magu as the substantive chairman of the anti-graft agency and also asked the President to sack him and present another name for the office. Another factor responsible for the delay is that the National Assembly is not happy with the humiliation the Senate President, Bukola Saraki, is subjected with the trial for alleged false declaration of assets while he was governor in Kwara State.
However, the implication of the delay, in our opinion, is that development activities could be halted while the nation drifts. Even though there could be a respite as the constitution allows the government to spend a certain percentage of the previous year’s budget until the present budget is passed into law by the National Assembly, the government is merely currently rolling over the budget for last year pending the approval of this year’s. Even at that, there is a limit to what the government can do under the prevailing circumstance. Also, while the government could continue to spend money on recurrent expenditure, spending on capital expenditure will have to wait for the new budget to be passed. There is also the implication that many foreign investors will foot-drag on decisions to invest in Nigeria; and coupled with political risks, they could either slow down their investment in the country or remain on the side line till the government is able to resolve all issues with the legislative arm.
Without any fiscal policy, in our view, Nigeria is likely to face some economic hiccups as domestic investors may also be in a state of confusion on the direction of government policy for the year. The delay also compounds the already parlous economic situation and could impede growth, especially as the country only recently exited recession. Accelerated appropriation of the budget, in the opinion of this newspaper, is imperative, especially on infrastructure to stimulate the economy because quick disbursement of funds will lead to the completion of various infrastructural projects such as rail, roads and dredging of some rivers across the country. Definitely, the delay will lead to poor implementation of the capital components which drive the economy and infrastructure development. We implore the Executive and the Legislature to sheath their swords and allow national interest to prevail over politics of acrimony.