Danger, uncertainty over 2019 budget

They explained that the Federal Government would reduce the 2019 budget from N9.1 trillion this year to N8.6 trillion in 2019.

Omodele Adigun (Lagos), Fred Itua and Ndubuisi Orji (Abuja)

For the first time in history, the country may be denied a fiscal roadmap needed to guide its financial direction next year as the late presentation of the 2019 budget to the National Assembly (NASS) may cost its passage into law. Only last Tuesday, the executive presented the 2019-2021 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), which precedes the budget to the National Assembly for consideration and approval.

READ ALSO: NASS budgets passage delay hinders projects completion -Buhari 

This has heightened the fears of economic and political analysts who are already apprehensive of other variables that would form the albatross that may consign the appropriation document into the dustbin until maybe after the inauguration of a new government in May next year, when it would be dusted up again.

Added to these, there are feelers from the corridors of power that the Ministries, Departments and Agencies (MDAs) of government have been instructed to take a second look at their 2019 fiscal proposals with a view to pruning them down.

This has again sent jitters down the spine of many Nigerians who are worried about the fate of the economy, the completion of both ongoing and abandoned projects, and even the ability of the government to pay the new minimum wage of N30,000 agreed with the workers last week.

At a public consultation last week in Abuja, the Minister of Budget and National Planning, Udo Udoma, and the Director General of the Budget Office, Ben Akabueze, unveiled a draft of the 2019-2021 MTEF and FSP.

They explained that the Federal Government would reduce the 2019 budget from N9.1 trillion this year to N8.6 trillion in 2019.

The key parameters of the 2019 budget are premised on an oil production volume of 2.3 million barrels per day at $60 per barrel, exchange rate of N305 per dollar, inflation rate of 9.98 percent and a nominal GDP rate of 3.0 percent.

Also while N6.9 trillion has been projected as available to fund the budget, debt service for the same fiscal year is estimated at N2.1 trillion.

Other key highlights for the 2019 budget from the MTEF and FSP document include: Share of oil revenue N3.6 trillion, independent revenue N624 billion, statutory transfer N506 billion, sinking fund N220 billion, recurrent (non-debt) N4.7 trillion, aggregate capital expenditure N2.7 trillion, among others.

The contraventions

The late submission of the MTEF and FSP by President Buhari is in contravention of the provisions of the Fiscal Responsibility Act, 2007, which require that the MTEF should get to the legislature by September ending.

The Act provides in Section 11(1)(b) that “not later than four months before commencement of the next financial year, cause to be prepared a Medium-Term Expenditure Framework for the next three financial years.”

Beginning of late submissions

In 2016, when President Buhari submitted his first budget to a joint session of the National Assembly, he was three months behind the constitutionally approved time of September of every year. He presented the budget on December 14, 2016.

Again, in 2017, President Buhari presented the 2018 budget two months behind the lawful stipulated time of September. He submitted the budget to a joint session on November 7, 2017.

During the submission, the president pleaded with the lawmakers to adopt a new approach. He urged them to pass the budget on time to allow it run from January 1, of every year to December 31, in line with global best practices.

But one year after the president made the plea, he is yet to submit a budget proposal to the National Assembly. If both chambers are unable to work on MTEF and FSP, it may also hamper the submission of the 2019 budget.

The 2019 elections

Beyond the aforementioned, economic and political observers are also perturbed that political campaigns may hinder the early passage of the budget by both chambers of the National Assembly. Unlike in 2016 and 2017, when the National Assembly had ample time to commence consideration of the budget early, campaigns, which are expected to commence next week, may be a major setback.

As soon as the Independent National Electoral Commission (INEC) lifts the ban on campaigns, activities in the National Assembly will grind to a halt. Over 60 percent of lawmakers are seeking for reelection and will relocate to their constituencies and senatorial districts to campaign.

The two presiding officers of the National Assembly, Bukola Saraki and Yakubu Dogara, will abandon Abuja and relocate to their constituencies. Beside, Saraki, who was recently appointed as Director General of Atiku Abubakar Campaign Organisation, will also be actively engaged outside the four walls of the National Assembly.

Serious work on the budget may only commence by the end of March, 2019, when the National Assembly and other elections would have been conducted by INEC. If the permutations pan out, the 2019 budget may not be passed until the end of the current administration, which is expected to expire on May 29, 2019.

Face-off between executive, legislature

The ongoing face-off between the executive and the legislature is also expected to affect the early passage of the budget. President of the Senate, Saraki and Speaker of the House of Representatives, Dogara, are now members of the opposition Peoples Democratic Party (PDP). This, pundits said, would affect the speedy passage of the budget. They are worried that the worsening relationship between the two arms and the hard posture of the legislature may not help matters when the committees take full charge of the sectoral consideration of the budget.

Already, ministers and heads of the various agencies of government, seldom appear before the committees of the National Assembly whenever they are summoned by the senators. Sometimes, they neither send representatives nor letters to give reasons for their absenteeism.

Lawmakers speak

The Speaker of the House of Representatives, Dogara, said instead of complaining about the late passage of the budget, President Buhari should sign bills passed by the House which are intended to fast track the processing of the budget.

The bills, he said, include a constitutional amendment bill, which requires the president to lay the budget before the National Assembly 90 days to the end of the year, and the National Assembly Budget and Research Office (NABRO) Establishment Bill, which was passed into law recently. The NABRO bill, according to the legislature, is intended to build the capacity of lawmakers on budgeting issues.

In his welcome address at the beginning of the current legislative year, Dogara noted that except the bills are signed not much progress could be made.

According to him, “it is as a result of this that the National Assembly proposed an amendment to the section to require the president to submit the Appropriation Bill not later than 90 days to the end of the financial year.

“The president has not yet signed this bill which is so critical to an orderly appropriation process. Let me use this opportunity to remind the president of the fact that if this bill doesn’t become law, any talk of an orderly appropriation process will be mere cheap talk.

“It is important to reiterate once again that the National Assembly has the constitutional powers, duty and responsibility to intervene in the budgeting process to ensure equity and federal character. It also entails even distribution of projects and amenities as direct representatives of the people.

“No doubt, Nigeria’s budgeting processes are in need of further reforms. That is why the National Assembly took the bold initiative to introduce the budget process bill that is expected to lay out timelines that will guide the appropriation process from conception to passage. But, for this bill to be passed, Section (81) Subsection (1) which gives the president power to prepare and lay before the National Assembly estimates of revenue and expenditure in the financial year, must be amended.”

Speaking to Sunday Sun, Senator Clifford Ordia, who represents Edo Central Senatorial District, berated the executive. It said it was not serious. He recalled how the executive submits budget late every year, but heaps the blame on the legislature whenever there is a public outcry.

He said: “The public always blame the National Assembly whenever the budget is not passed on time. This is wrong. We don’t prepare the budget. We only approve. If the executive doesn’t send the budget on time, there is nothing we can do. We can’t kill them. This is not rocket science.

“The sad thing is that, when the executive brings the budget late, they now turn around to blame us for not passing it on time. Nigerians must rise up against this and demand that the right thing must be done. The right thing is for the executive to submit the budget on time. This should be done.

“Imagine what has happened to the 2019 budget. This is an election season and lawmakers will soon start campaigns. Yet, the executive is yet to submit the budget. Tomorrow, they will turn around and blame us. I think it’s unfair. With these developments, I don’t think the budget will be passed soon.”

A member of the House of Representatives from Rivers State, Randolph Brown told Sunday Sun that “the truth is that the National Assembly is not a rubber stamp. It is a different institution. It has its mode of doing its job and nobody dictates to it.

“What is the constitutional requirements of submitting a budget. The executive is supposed to submit the MTEF to the House six months to the end of the budget year. It is when that has been passed that they will submit the budget. They are blaming the legislators; we learnt from the news that MTEF was approved by the Federal Executive Council in the meeting last week. So, who is to be blamed?

“If nothing has been done up till last week, when do you expect the House or the legislature to pass the MTEF, after which they will present the budget. This is November, budget has not been submitted.

“The role of the executive is to send the budget proposals. The power of appropriation belongs to the National Assembly. We appropriate.

They are sending in proposals. But we appropriate because we represent the people. Those who prepare the budget, who are they representing? They represent nobody. They are appointees of the president. So, there is no issue of the National Assembly bringing extraneous things into the budget. We look at their proposal, the one that is good, we allow, the one that is not good, we discard.”

Also raising serious concern about the situation, the Chief Executive of an Abuja-based consultancy outfit, Global Analytics Consulting Limited, Mr Tope Fasua, said: “We are in trouble! What is there to reduce in a budget of barely $25 billion for a whole 190 million people when South Africa is budgeting $155 billion for 58 million people; Angola is budgeting $53 billion for 25 million people, Algeria $60 billion for 40 million people and Kenya $29 billion for 40 million people? I think Nigeria has now got to the end of its tethers!

“Already Nigeria’s budget is the 79th largest in the world despite our population being the 7th largest in the world. Our budget per person or per capita is the second lowest in the world better only than DR Congo. But when we compare the budgets of countries to their GDPs, Nigeria’s budget is already the lowest in the world. By reducing the budget, the government is acting pro-cyclically as we say in economics, meaning they are taking a decision that worsens the problem. We are, therefore, in trouble as a people. Indeed, our budgets have never had anything in it for the people. They are merely put together to benefit a few top politicians and civil servants. I have advised the government not only to increase our budget to reasonable levels compared with even some average population African and Asian countries, but to also ensure that the budgets are calibrated to focus on what matters to the people. The people of Nigeria have been battered for too long. The government has obviously lost all initiative and is no longer fit for purpose.”

Rather than trimming the budget, the Managing Director of Cowry Assets Management Limited, Mr Johnson Chukwu, advised the Federal Government to consider public-private partnership to fund some of the commercially viable projects so that they are not funded from the budget provision.

He equally wants policy makers to triage such facilities.

Hear him: “What the government should do is to prioritise the projects and determine those projects that are critical to the economy to serve as enablers to economic growth and recovery. They should focus their efforts on those projects instead of taking on all the projects.

“Another thing the government should look at is involvement in public-private partnership to fund some of these commercially viable infrastructural projects so that they are not funded from the budget provision. That way, they would still have material increase in capital expenditure build-up without necessarily increasing the funding from the budget.

“I think at this point, when the government is constrained in terms of revenue, it is the time they should think of other creative ways to fund infrastructure apart from budgetary allocation.” He, however, reasoned with the government as it envisages low receipt for the new year.

“As regards the projects, the government is proposing about N8.73 trillion as 2019 Budget. About N393.23 billion less than the N9.12 trillion (2018 Budget) that we have, and projecting a decline in government’s revenue. Therefore, it equally puts increase in the budget deficit. Given such projections, despite the fact that crude oil price assumption is about $60 in the MTEF and 2.3 million barrels per day production, the government is projecting that its revenue will decline in 2019, obviously, based on its experience in the current year.”

Chukwu expressed concern on the new minimum wage, saying that a review of the MTEF would have to be carried out in view of the development.

“I have a doubt whether they have factored in the cost of the additional overhead that the government has to bear on the minimum wage when it is implemented in the Medium Term Expenditure Framework (MTEF). If it was not factored in, that means that the MTEF will go through a major review before it is passed by the National Assembly because the wage bill of the government; the government overhead; the recurrent expenditure will start to increase materially with the new minimum wage,” he said.

Skeptical that the 2019 Budget may not see the light of the day, the Cowry Assets boss advised early preparation and submission of the budget to make its passage seamless.

His words: “In terms of timing, I think the Fiscal Responsibility Act has made provision for the budget to be submitted around September or thereabout. So, ideally, given the fact that we know how long it takes the budget to get passed, the MTEF should have gone to the National Assembly around September. And by now, we should be talking about submitting the national budget.

“Another factor is that, I don’t know the level of consultation that took place in preparing the MTEF and what is currently going on in preparing the budget. But if intensive and detailed consultation, the areas of conflict should be taken out so that the National Assembly can review the proposal and pass it into law.

“But first of fall, they have prepared and submitted the MTEF. But where there are several areas of disagreement on the budget and the complaint that the National Assembly takes too long to approve the budget, the NASS said the MDAs were not coming forward to defend their budgets.

“Even the MTEF is rather coming late in the day and the budget, which has not come to the National Assembly by November is rather coming too late. So, we might be dealing with the budget that might not likely be passed into law before the election. Remember that campaign starts by November 18. And once presidential election campaign starts, this means that the National Assembly election campaigns are starting too. The National Assembly members will likely take time off to go and campaign for election, which comes up in February. So, if the budget has not got to them before November 18, there is the likelihood that they may not consider the budget at all before the election. And after the election, the zeal to return to legislative duties, particularly among those that may not win the election will be very low. So, we are going to have a National Assembly that may not be cohesive after the election. I think the 2019 budget, from all indications, is going to face major challenges ahead of the inauguration of next government.”

READ ALSO: 2019 budget: FG approves 2019-2021 MTEF

The post Danger, uncertainty over 2019 budget appeared first on The Sun Nigeria.

Source: news

Human Hair Wigs From (40k)

crop Tops from 3.5

Charming Queen Human Hair(from 24K)

© Copyright 9jacable 2018