President Buhari presenting the 2016 Appropriation Bill to a joint session of the National Assembly
President Buhari needs to pay adequate attention to the implementation of the budget, to make the difference he has promised, writes Vincent Obia
While presenting the 2016 annual budget to the National Assembly on December 22, President Muhammadu Buhari pledged, “This budget will be executed to provide optimum value by ensuring every naira spent by this government counts.”
Nothing but an optimal implementation of the budget can make the difference Buhari has promised Nigerians.
Since the inception of the Fourth Republic, progress on all fronts in the country has been hampered by poor budget performance. Hardly any year has recorded up to 50 per cent implementation of the federal government’s budgets. The story is not different for many of the states.
The problem of poor budget performance has been attributed to various causes, which border largely on the question of transparency and accountability. The roots of the problem are mostly politician-made. They include sloppy budget formulation, especially, lack of credible income forecasts; extra-budgetary spending; inconsistency in actual and reported expenditure; and corruption and diversion of funds.
Buhari has promised to tackle the transparency and accountability questions head-on. To succeed, the Federal Ministry of Finance must ensure proper monitoring of government revenues and expenditure. The Bureau of Public Procurement, otherwise known as the Due Process Office, should be given fresh impetus to ensure adequate control of government spending, and there must be prompt financial reporting by the relevant regulatory authorities for transparency and proper monitoring of the budget performance.
The federal government must take deliberate steps to ensure efficiency in income distribution. And the National Assembly must be alive to its oversight role regarding the ministries, departments, and agencies of government.
The steps taken by the government to create employment and reduce poverty, including the plan to recruit and train 500, 000 unemployed graduates and NCE holders as primary school teachers, are commendable. But there is no doubt that the most effective way to make wealth trickle down through society is to focus on creating incentive for citizens to attain their full potentials – rather than putting emphasis on direct government employment. The federal government needs to introduce policies that are consciously geared towards delivering incentives for people to engage in economic activities and achieve their potentials.
Interestingly, the president has promised that his “administration will have a job creation focus in every aspect of the execution of this budget. Nigeria’s job creation drive will be private sector led. We will encourage this by a reduction in tax rates for smaller businesses as well as subsidised funding for priority sectors such as agriculture and solid minerals.”
Perhaps, most importantly, there is need for strong institutions and regulators to achieve the progress the president has laid out in the budget. Strong institutions are vital agents of economic and political progress. He should pay attention to the building of institutions that would outlive his administration and remain a reliable basis for positive change. This is more so given the greater emphasis on capital expenditure in this year’s budget. Capital expenditure increased from N557 billion in the 2015 budget to N1.8 trillion in the 2016 budget. Capital expenditure takes 30 per cent of the 2016 budget, which is the highest the country has seen in many years.
Proper implementation of the budget would encourage fiscal discipline, economic stability, efficient resource allocation, and effective delivery of social services. Poor budget implementation, on the other hand, has the tendency to promote economic instability, misapplication of resources, and corruption, generally, with its attendant dislocations in the various sectors.
Another issue that has over the years denied the country the full benefits of its national budgets is the late submission of the Appropriation Bill to the National Assembly – and the late passage of the budgets by the federal legislature. The Nigerian constitution defines a financial year as, “Any period of 12 months beginning on the first day of January in any year or such other date as the National Assembly may prescribe.”
That means that the Appropriation Act ought to be ready before January 1, when the financial year begins and runs through December 31. But since the Fourth Republic, Nigerians have hardly seen a budget passed into law before January and implemented till December. Under the circumstances, private sector operators have found it difficult to make reliable forecasts concerning their businesses using the budget as a roadmap.
Both Senate President Bukola Saraki and Speaker Yakubu Dogara have pledged to ensure speedy consideration and passage of the 2016 Appropriation Bill. But no matter how quickly it is passed and signed into law by Buhari, it seems sure that implementation of this year’s budget would not begin in January. As allowed by the constitution, and as Dogara hinted during the budget presentation, the National Assembly may have to intervene to adjust the timing of the financial year for the purpose of the 2016 budget implementation. This is to avoid any disruptions in the implementation of the budget and give the Buhari administration enough time to execute the plans enunciated in the budget.
Buhari should do his utmost to ensure full implementation of the 2016 budget. This is the only way the country can reap the benefits of his change agenda
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