President Muhammadu Buhari and the Legislatures exchange blows over the 2018 Budget while economists doubt whether the federal government will fully implement it before its life span expires 

By Anayo Ezugwu

WHEN President Muhammadu Buhari received the N9.12 trillion 2018 Appropriation Bill from the National Assembly on Friday, May 25, many Nigerians expected that the signing of the budget will be rancour free. But when the president finally signed the budget three weeks after, he castigated the lawmakers for tinkering with the document. The lawmakers replied that they are not there to rubber stamp the budget and that the actions they took was in the interest of their constituencies.

President Buhari while signing the budget on Wednesday, June 20, said that he did it reluctantly because he had no choice. He said the National Assembly made cuts amounting to N347 billion in the allocations to 4,700 projects submitted to them for consideration and introduced 6,403 projects of their own amounting to N578 billion.

According to him, many of the cuts in allocations to critical projects could make their implementation difficult if not impossible. He said some of the new projects inserted by the lawmakers have not been properly conceptualized, designed and cost and will therefore be difficult to execute.

Buhari said many of these new projects introduced have been added to the budgets of most MDAs with no consideration for institutional capacity to execute them or the incremental recurrent expenditure that may be required.

Reacting, the National Assembly said the insertions and new projects were done to correct alleged imbalance in the budget submitted by Buhari. According to the legislature, projects as proposed in the bill were lopsided.

The lawmakers, in a press statement jointly signed by Senator Aliyu Sabi-Abdullahi, chairman, Senate Committee on Media and Public Affairs and Razak Nandas, chairman, House Committee on Media and Public Affairs, said “Adjustments and reductions in the locations, costs and number of projects approved were made in order to address geo-political imbalances that came with the Executive proposal.”

According to the statement, “The introduction of new projects was done to ensure the promotion of the principles of Federal Character as contained in Section 14, subsection (3) of the 1999 Constitution of the Federal Republic of Nigeria as amended which states that “the composition of the Government of the Federation or any of its agencies and the conduct of its affairs shall be carried out in such manner as to reflect the federal character of Nigeria…

“The number of projects had to be increased in order to give a sense of belonging to every geo-political zone of the country to ensure socio-economic justice, equity, fairness, and to command national loyalty. Within the context of the provisions of Sections 4, 80 and 81 of the Constitution, everything that the National Assembly has done is within its powers.”

The statement stated that the action of the lawmakers was in accordance with Chapter 2 of the Constitution which emphasizes the need for balance, inclusivity, and equity in the distribution of national resources. “The annual budget, which symbolizes the distribution of these resources, must reflect the aforementioned values, which we swore to uphold,” the statement said.

However, some economists feel that the altercation between the executive and the legislature over the budget is unnecessary. Austin Nweze, lecturer, Pan-Atlantic University and economic analyst, said the president has just told Nigerians that if he fails to implement the budget, the National Assembly should be held responsible. He said the president should learn to be a president rather than shifting blames.

According to him, Buhari has already prepared the grounds to shift the failure of 2018 budget to the National Assembly. He stated that the president had succeeded in pitching Nigerians against the lawmakers. “All Nigerian eyes are on the lawmakers whom the feel do not want the government to succeed.

“But that is not the case. The question we need to ask is who cost the projects they injected in the budget. Nigeria is one country where the cost of constructing a kilometre road is the highest in the world. Projects are inflated and nobody takes time to do the actual costing.

“So it is quite unfortunate. This blame game when is it going to end. This is not governance and this is not what we asked for. For even signing the budget late, when is he going to implement it because June is gone already? The MDAs, when are they going to get the money to start implementations because by October the MDAs will stop doing projects to prepare for the 2019 budget,” he said.

Nweze said his major concern is not the insertions but the implementation of the budget. He said that the federal government may not achieve 20 percent implementation of the budget because it came late, adding that the upcoming elections will als be a source of distraction.

According to him, the implementation of the budget has never gone beyond 30 percent since 1999. “We are in June, so I don’t expect them to do better. In 2016, as at August one of the ministries didn’t receive allocations. So they are just there to pay salaries while their projects suffer. You know what that means to the economy, if there is no capital projects executed it will affect the economy because funds will not be injected into the system.

“And don’t forget this is an election year. From now on any money that comes in could be diverted to campaigns. So don’t expect the government at all levels to do anything especially those governors seeking to return to office. All eyes and attentions are on elections. So if they achieve 20 percent that would be great,” Nweze said.

However, Udo Udoma, minister of budget and national planning, has assured Nigerians that the federal government has the capacity to implement the budget. He said the government would raise N9.12 trillion revenue to finance the 2018 budget.

During the public presentation of the 2018 budget on Thursday, June 21, Udoma expressed optimism that the government would be able to generate enough revenue to finance its programmes as contained in the fiscal document. Giving a breakdown of how the budget would be financed, Udoma said the sum of N2.99 trillion would be generated from  oil revenue, N31.25 billion would come from dividend to be received from the Nigerian LNG Limited, while N1.17 billion was expected to be realised from minerals and mining revenue.

The minister stated that the federal government was targeting to generate N658.55 billion from Companies Income Tax, N207.51 billion from Value Added Tax, N324.86 billion from Customs duties, while N57.87 billion was expected to come from Federation Account levies.

Also, he said the government was expecting N847.95 billion as independent revenue from its agencies, while tax amnesty income, signature bonus and unspent balance from previous years would provide N87.84 billion, N114.3 billion and N250 billion, respectively.

He also said the sum of N374 billion was expected to be realised from domestic recoveries and fines, while N138.44 billion would come from other federal government recoveries. The minister added that the sum of N710 billion would be realised from the sale of oil assets, while grants and donor funding would contribute N199.92 billion.

He stated that N146.64 billion would be realised from other unnamed revenue sources, while the budget deficit of N1.95 trillion would be financed through borrowing of N1.64 trillion. The N1.64 trillion borrowing is made up of domestic borrowing of N793 billion and foreign debt of N849 billion.

In addition, about N306 billion is expected from privatisation proceeds, while N5 billion is projected to be realised from the sale of other government property to partly finance the deficit.

The fiscal document signed by Buhari had a total proposed spending of N9.12 trillion, made up of N2.87 trillion for capital expenditure, N3.51 trillion for recurrent (non-debt) expenditure and N2.01 trillion projected to be spent on debt servicing.

– Jun. 22, 2018 @ 19:45 GMT |