STILL WAITING FOR THE BUDGET

MONDAY EDITORIAL

The delay in passing the 2018 appropriation bill bodes ill for the economy

Like last year when the 2017 Budget remained a subject of speculations for months, there is also no sign when the 2018 Budget will become operational. While the controversy last year was about who would sign it into law in the absence of President Muhammadu Buhari, then on medical vacation in the United Kingdom, the current challenge is about the uncertainty as to when the budget will actually be passed by the National Assembly.

To demonstrate how far behind the 2018 budget is, the details are still being defended. Last Thursday, the lawmakers faulted the proposals by the Council for Freight Forwarders of Nigeria (CRFFN) and National Inland Waterways Authority (NIWA). According to the Senate Committee on Marine Transport, there is need for CRFFN to explain the N800 million listed in both the 2017 and 2018 budgets for the purchase of security equipment at the borders while the N2.7 billion estimated for the purchase of dredgers and accessories by NIWA was considered outrageous.

While it is unfortunate that the buck passing between the executive and legislature is a recurring decimal, it is important for both to come together to find a workable solution at critical moments such as this. The Head of Research at BudgIT Nigeria, Mr Atiku Samuel attributed the delay to the absence of a budget calendar and lack of coordination and planning by both parties. We agree with him.

According to Samuel, during the budget formation phase, the executive and legislators and other stakeholders should have been consulted to reach a compromise on all issues. “However, not much is done by the executive to carry the legislators along. As such, issues on the budget framework, lack of details, frictions between the legislators and executive and how the legislators’ process information differs from how the executive processes information. In all, the lack of coordination cumulates into a bigger issue that has delayed the passage of the budget among other issues”, said Samuel.

 While discrepancies in figures between the legislative and executive arms are normal and need to be addressed, we disapprove of the time it is taking to arrive at the 2018 budget. The message such tardiness sends is that those in positions of authority in both the executive and the legislature in our country do not exude as much care as is required due to the fact that they are never adversely affected by the delays in the passage of budget.

To the extent that a budget provides financial control and serves as the basis against which developmental activities can be monitored, the current delay suggests that the Nigerian economy is not operating optimally. First, capital projects which are critical for development cannot be executed since contractual agreements cannot be initiated without budgetary approval. Second, following the fact that capital projects cannot be executed, contractors cannot be paid and other businesses which provide services directly or indirectly to the contractors are affected by the squeeze. This leads to cyclical unemployment and a dwindling in some small businesses. For instance, the itinerant hawker who hitherto provided food to labourers at a construction site may be out of business whilst projects are delayed. Third, the economy contracts at a rapid pace due to the liquidity squeeze. And four, since the government intends to borrow to fund recurrent and other essential expenditure which is in itself not prudent, this unnecessary delay can only hamper all the projections.

No matter the spin officials put on the issue, emerging facts suggest that the nation’s economy may actually be in dire straits and unless something is done urgently, beginning with the passage and commencement of implementation of the 2018 budget, we may sinking into deeper trouble.