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Experts proffer ways to make budget cycle work

Last year, the former Budget and National Planning Minister, Udoma Udo Udoma, had predicted  that before the end of the President Muhammadu Buhari’s second term, he would revert the budget cycle to  January to December.

That prediction came true on lastDecember , as the President signed the 2020 Budget into law, thus achieving one of his promises of  reverting the budget cycle to its original fiscal year.

Udoma, however, regretted that the executive could not achieve that feat in his first term in office due to executive-legislative friction.

“I am hopeful that in Mr President’s second term, we might have a situation where the executive and the leadership of the National Assembly are much more aligned.

“This will help not only to be able to achieve a return to the January– December fiscal year but to have a much smoother budget process,’’ Udoma had predicted.

According to him, January to December fiscal year was more predictable and would help the private sector and other economic players in planning because most economic players run a January to December fiscal year.

“Also, it will be much easier to track the budget performance if both the recurrent and the capital budgets run from the same dates.

“It is therefore, desirable to return to the January to December fiscal year,’’ the former  minister,  said.

The National Assembly had passed the N10.59 trillion budget on December 5.

But the budget was increased from N10.33 trillion to N10.594 billion by the National Assembly.

While  N560.47 billion of the total budget is for statutory transfers,   N2.7 trillion is for debt service.

Other breakdowns of the budget include N4,842,974,600,640 for recurrent expenditure; capital expenditure – N2,465,418,006,955; fiscal deficit – N2.28 trillion.

The budget as passed by the National Assembly also maintained Nigeria’s daily oil production rate at 2.18 million per barrel, but increased the oil benchmark price to $57 per barrel against the $55 proposed by the executive.

The signed 2020 budget also retained inflation rate at 10.81 per cent and the exchange rate at N305 to a dollar as proposed by the executive.

But the concerns of Nigerians is not only  the sustainability but the transparent execution of the budget.

The co-ordinator, Human Rights Writers Association (HURIWA), Comrade Emma Onwubiko, is worried about the implementation of the budget  devoid of official corruption.

“The January to December budget circle can only make any meaningful and constructive impact in the economy if the administration of the budget or its execution is transparent, accountable, open and free of undue bureaucratic bottlenecks which induce official corruption. The main issue is not to ordinarily and in a propaganda fashion indicate that the budget circle has been returned to its former status of running from January to December just to win public accolades but the most critical factor is how well will the implementation of the budget affect the health and status of the national budget? Take for instance, there is this credibility crisis that has self-infested the 2020 national budget and passed by the senate of the Federal Republic of Nigeria because of the unexplained allocation of the humongous amount of N37 billion as the allocation to renovate the National Assembly complex which is over 10  times  the original cost of building the entire National Assembly complex and this is same as the overall budget for the critical education sector which is only N42 billion.

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“That allocation for repairs of the National Assembly complex is a huge joke; and this is surely not transparent and it is a wasteful expenditure that will not add any value to the economy but will enrich only a tiny minority of the political elite and their business fronts.  Again, there is no clarity on why the Federal Government has continued to embark on a  borrowing spree even when the same government told Nigerians that so much revenues are mopped up by Nigerian customs and excise and the Federal Inland Revenue Service (FIRS). Nigerians should be told how much was made as revenues internally and externally and then also on why the government plans to return Nigeria to the inglorious past as a heavily-indebted nation only few years after the then President Olusegun Obasanjo era exited Nigeria from the clutches of heavy indebtedness and over $20 billion paid to clear off Nigeria’s Paris and London clubs loans.

“These dubious loans borrowed or being borrowed under the guise of building critical infrastructure may end up being  stolen by government officials who are never transparent.  The coming into being of the January to December budget circle can only make any difference if the infrastructure to be built are publicly advertised and the members of the public including the members of the organised human rights community are allowed to follow up on the procurement processes and the stages of execution of such critical infrastructure. The names of the contractors who will win the bids in a transparent manner must be advertised for public knowledge because sovereignty belongs to the people of Nigeria who donate the legitimacy for the officials of government to exercise authority and responsibility for a given tenure. Therefore,  the opaque way of running and the gross  administration of the budget as we used to see has made procurement corruption widely practised and this crime on the part of the government officials adversely affects the quality and standards of the public works that are carried out for the Nigerian people by the Federal Government. If the people don’t get value for their money then the budget is as good as a huge gamble and a national scam ,” Onwubiko added.

An erudite  statistics professor from University of Ibadan, Olasoye Olabusoye, did not see anything new in reverting to January to December budget cycle.

For him, whether it is January to December or June to June, it is still a 12-month budget. What is important to him is the implementation.

On the positive side, he observed that it would help the people  to plan and give investors direction.

“The first argument is that even the previous ones always had a full cycle of 12 months. It doesn’t matter when the budget was approved . So, the effective date of implementation starts from when it was approved and to run the full course of 12 months. The reality is that nothing is changing. Only that we are beginning the cycle from January. In the past,  the cycle has always been whenever it was approved then it starts counting 12 months. So, what we are witnessing now doesn’t really bring any hope. For me,  what will bring hope is the spirit behind the execution – the determination behind the execution. Then constant update of government to the citizens on the progress being made in achieving the underlying objectives of the budget.

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“So, the idea of the government waiting till the end of the cycle before giving us a report is not a good practice. The best practice is that on quarterly basis and if possible on monthly basis,  governments should give updates. This is what we budgeted for education and this is what we have released. This is what we budgeted for roads and this is what we have released. And these are the roads that are being funded. These are the roads that are being funded. So, when you give a regular updates like that you carry the citizens along. From the beginning you make the citizens to know what percentage of what you budgeted for has  been funded and where you are getting the funds. What is left to be implemented. These are ways to carry the citizens along. You don’t have to wait till the end of the cycle before you provide feedback to the citizens.

“In terms of beginning from January, there is nothing to rejoice about.

“But on the positive side, it helps the people to plan and it gives investors some sort of direction. What matters most is  the faithfulness, the sincerity, the commitment to implement the budget as approved” the erudite professor, noted.

Eze Onyekpere, the co-ordinator, Centre for Social Justice (CSJ),noted that Nigeria, for long,  has been wallowing in total disobedience of the law because both the law and the financial year have been run from January to December. So, what the government just did was to right the wrongs.

“The question whether it is sustainable is confusing because  what we have been doing since is a violation of the law and policy. Both the law and the financial year have defined the financial year as the period between January 1 and December 31. We are closely coming back to obey the laws of the land. What we have been doing is the aberration of the law. The issue of sustainability does not arise.

“It is supposed to have a positive impact on the economy and the implementation of the budget.

“One is that it  shows your response to private sector and the kind of polices that guide the financial economy.

“Two, by the time you start in January, you will plan. For instance, construction companies can now start work until around mid-March, May June before the rains come in. The same for those in agriculture sector because it will be a planting season.

“So, it  allows  for proper planning and the finishing that will arise is that we may have much more better implementation of the budget,” he said.sun

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