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Tackling obstacles to effective budget implementation

With the 2019 budget laid before the National Assembly, timely approval by the legislative arm, prompt cash backing for capital projects by the executive will make the implementation effective.


Annual budget presentation was an exciting experience before now.


During the Second Republic, the late President Shehu Shagari, as routine commitment of his administration, ushered Nigerians into every new year with his budget presentation on January 1.


Nigerians, thus kept faith with that date, looking forward eagerly to budget presentation as business owners, artisans, academia, financial experts and others desired to also set their financial agenda through government appropriation.


Reverse is, however, the case today as budgeting process has gone full circle, losing the vitality that made it an attractive affair to all Nigerians irrespective of social status.


According to some school of thought, military incursion and long stay in governance created the anarchy currently hallmarking the nation’s budgeting process.


Like ones before it, the 2019 N8.83 trillion budget estimate was presented recently by President Muhammadu Buhari to members of the National Assembly after series of conflicts.


Already, the top echelon of the lawmakers has again written off the budget with awful remarks.


If remarks by the Senate President, Bukola Saraki, represents the standard norm for measuring budget efficiency, it means 2019 budget is as worthless as the ordinary the papers conveying the estimate.



The new budget is guided largely by provisions of Economic Recovery and Growth Plan (ERGP), the Federal Government’s economic blue print.


Given that the economy is recuperating from recession, 2019 budget proposal seeks to continue the reflationary and consolidation policies of 2017 and 2018 budgets respectively, which helped put the economy back on the path of growth.


Key assumption and macro-framework of the new budget are as predicated on oil production of 2.3 mbpd at $60 per barrel but the price is currently trending down, hovering in the neighbourhood of $50 with government, however, allaying fears; exchange rate at N305/$, inflation rate of 9.98 per cent; nominal consumption of N119.28 trillion at a nominal GDP of N139.65 trillion and growth rate of 3.01 per cent.


A few highlights of expenditure proposal of the 2019 budget include an overall budget deficit of N1.859 trillion, representing 1.33 per cent of GDP; projected deficit in threshold stipulated in the Fiscal Responsibility Act (FRA) 2007; deficit to be financed mainly by borrowing N1.649 trillion.


Of the amount, domestic sources to account for N824.82 billion. The government is consciously shifting away from commercial to moreconcessionary financing.


Revenue sources

Some identified sources for financing 2019 budget include Share of oil revenue, and the components are share of dividend (NLNG) N39.89 billion and share of minerals & mining, N1.29 billion.


For the non-oil, share of CIT is N799.52 billion, VAT, N229.34 billion; Customs N302.55 billion and others.


Views, comments

Since its presentation to the National Assembly by the president and its breakdown to the public by Minister of Budget and National Planning, Senator Udoma Udo Udoma, the new budget has attracted varied comments.


The Senate president had described the proposal as hopeless and deceptive.


Speaking aftermath of its presentation, Saraki said the proposal was not only hopeless but deceptive. The Senate president made the comment when he hosted some civil society organisations (CSOs) in Abuja on December 20.


Saraki wondered why the executive would use a benchmark higher than the current crude oil price.


“I made a comment where I said it was a hopeless budget that will rarely bring Nigerians out of poverty, diversification of the economy and inclusive growth.


“When I said that I noticed a lot of people were a bit defensive, saying the statement was borne out of politics. I am a kind of person that is responsible enough to choose my right words and I am happy about this question.


“If you follow the previous budgets under this administration, there was no budget under this administration that I have ever used any word as strong as that. Some of the budgets had given hope; some had tried to address growth. But this budget (2019 budget) particularly, I still stick to my words, it is not only hopeless, I think it is even deceptive,” he said.


In his response, Mr. Lai Mohammed, Minister of Information, said the executive would not exchange words with legislature on the matter.


In his view, financial expert, Prof Uche Uwaleke, said Federal Government’s decision to reduce the size of the 2019 budget to N8.73 trillion would reduce inflation threat.


Uwaleke said that the decision to slow down government’s expansionary spending, especially in an electioneering year, would pose less threat to inflation.


He added that the decision would reduce the fiscal deficit to Gross Domestic Product ratio in line with the Economic Recovery and Growth Plan (ERGP) target.


According to him, the reduction will curtail government borrowing in view of the present huge debt service burden which is clearly unsustainable at over 65 per cent of revenue.


“I think the decision to scale down on the size of the 2019 budget is wise considering the present fiscal realities in Nigeria. The only worrying aspect of the proposed 2019 fiscal framework is the significant reduction in capital expenditure,” Uwaleke said.


He noted that the 2017 budget implementation experience coupled with the revenue challenges being encountered in the execution of the 2018 budget called for a conservative approach to next year’s budget.


Making 2019 budget effective

To make 2019 budget realisable and deliver on its estimate, the executive and legislative arms must work in harmony.


Heads of the government agencies that would be going to the National Assembly for budget defence mustn’t play to gallery. They should supply facts and information required by parliamentarians to pass the MDA budget in record time.


The executive on its part must implement budget by cash backing projects with funds on record time.


Limited funds at government disposal is a major constraint that affected implementation of past budget.


Effort must be made to steer 2019 from traveling on this path.


However, it’s gratifying that government has decided to prioritise non-oil revenue in 2019 with emphasis on tax.


“At the Ministry of Finance, our current focus is on revenue. We have to mobilise more domestic revenue so that we can better fund our budget. You can see from the performance that there is gap between what is grant in the budget and what is actually generated.


“We might be having to go to the National Assembly to amend some laws that we identified to have some gaps, some loop holes. We are doing every thing we can to make sure our budget are better funded going forward and it will start from 2019,” said Zainab Ahmed, Minister of Finance at a recent budget interactive session in Abuja.
Udoma reinforced the same position about new paradigm shift in budget implementation starting with 2019


He said: “The 2019 budget proposal is intended to further reposition the economy on the path of higher, inclusive, diversified and sustainable growth, and to continue to lift significant numbers of our citizens out of poverty.


Last line

To ensure the current budget is not trapped in the usual quagmire of delay that characterised those in the past, the National Assembly and the executive must bury their differences, work together for speedy passage and assent.



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