RECURRING DELAY IN PASSAGE OF BUDGET: MATTERS ARISING

“The Chilean constitution mandates that the executive provide the legislature its budget 60 days before the end of the fiscal year. While this time- frame is comparable with a number of countries, the consequences of Chilean legislative inaction are especially significant. If the legislature does not approve the budget within 60 days, it automatically becomes law in its entirety, thus under- cutting the leverage of the parliament. I have no doubt that the same can be replicated here in Nigeria”

On the 7th of November 2017, President Buhari presented a N8.612 trillion budget proposal for the 2018 fiscal year to a joint session of the National Assembly with an expectation that the Budget would be passed by the end of December and signed into law very early in January. This was an improvement on the date of presentation of the 2017 budgetary proposals which was done in December 2016. It was reported that the Presidency desired a return to the budgetary circle of January to December as opposed to the current system whereby the budget is passed in the middle of the year. However as reported by a national daily, those hopes have been dashed as the National Assembly does not expect that it will be able to pass the budget until April 2018. The report states as follows:

…Buhari had met with Senate President Bukola Saraki, Speaker of the House of Representatives Yakubu Dogara and other principal officers of both chambers to lobby them to push for the passage of the 2018 Appropriation Bill before the end of the year.

Based on the outcome of the meeting, both chambers on December 5 had suspended plenary to accelerate the budgetary process of meeting with the heads of ministries, departments and agencies (MDAs) of government for the defence of their respective budget estimates.

Saraki had also directed the Joint Committee on Finance, Appropriation and National Planning to submit its report on the Appropriation Bill Tuesday.

However, the lawmakers said Tuesday that the experience of the past two weeks, during the budget defence sessions with the heads of MDAs that made themselves available, had sounded the death knell on any plan to pass the 2018 budget this year.

The debate was facilitated by a point of order raised by the Deputy Senate Leader, Senator Ibn NaAllah, who harped on the need for the lawmakers to adequately inform Nigerians on why the 2018 budget could not be passed before the end of the year.

“By today, we would have passed the budget. The template for doing the budget which we have inherited and which we have continued to put into use has always turned out to be problematic for us, the reason being that it was a template provided under the military regime.

“That template cannot give this nation the kind of budget that the nation deserves,” NaAllah argued.

Contributing, Senator Barnabas Gemade (Benue APC) said the expectation that the 2018 budget could be passed this year was unrealistic.

EFFECT OF DELAY

This delay in the passage of the budget has gradually become an annual one. after it is passed by the National Assembly, the bill must be signed by the President before it becomes law. If the process of passing the 2017 is anything to go by, then it is to be expected that the Presidency will once again insist on a clause by clause examination and comparison of the bill passed by the legislature with the proposal submitted to the legislature by the executive before assenting to it. This will surely add more weeks to the delay. This delay, as highlighted last year is bound to have grave consequences for the economy. Writing on the subject, Chris Emotoh reported the views of the President of the Nigerian Economic Society, Prof Ben Aigbokhan as follows:

“…Prof. Aigbokhan explained that when there is a delay …it affects economic growth and many jobs would be lost, thereby saturating the labour market and endangering the economy. According to him, when budget is delayed, the implication is that government may not be able to spend or execute 40 percent of the capital expenditure…Another negative effect of delay budget is that it discourages foreign investors from coming in to invest and that could make them to divert their investment capital to other countries.”

Given the above, one cannot but wonder why there is annually a delay in the process of passing the budget. In 2000, the budget for that year was not signed until the 6th of may although it was presented in December 1999. The table below gives the dates the Budgets since 2008 were signed into law.

 

S/N Year of Budget Passed into law
1 2008 April 15, 2018
2 2009 March 10, 2009
3 2010 April 22, 2010
4 2011 May 27, 2011
5 2012 April 13, 2012
6 2013 February 26, 2013
7 2014 May 24, 2014
8 2015 May 19, 2015
9 2016 May 6, 2016

PROCESS SHOULD BE SEAMLESS

Ideally, the process of the passage of the budget should be seamless as stated by the Central Bank in one of its publications as follows:

“In Nigeria the fiscal year begins on January 1st and ends December 31st. There is, however, no time limit for the National Assembly to consider and approve the budget set before it, although, there is a time limit for the President. This process starts in June with the issuance of a Call Circular from the FMOF to MDAs to submit their expenditure proposals, which are set within the spending limits. A draft Bill is prepared by October by the FMOF and sent to the NASS through the Presidency. Technically, before the legislature’s December recess, the Bill could be passed with any agreed amendments. The President could then be able to authorize the Bill to become law in January. A clause also allows the President to spend from the previous year’s budget, which has to be within the time limit of six months, although there has to be an awaiting appropriation act for the current fiscal year.”

To prevent the unsavoury effects of the constant late passage of the Budget, Nigeria may borrow a leaf from other countries who have evolved efficient ways of passing their budgets. In a publication titled Legislaturesand the budget process” published by the National Democratic Institute for International Affairs an example was given of the situation in Chile as follows:

“The Chilean constitution mandates that the executive provide the legislature its budget 60 days before the end of the fiscal year. While this time- frame is comparable with a number of countries, the consequences of Chilean legislative inaction are especially significant. If the legislature does not approve the budget within 60 days, it automatically becomes law in its entirety, thus under- cutting the leverage of the parliament.“

I have no doubt that the same can be replicated here in Nigeria as one constant complaint of the national assembly is that the executive is often late in submitting the appropriation bill for its consideration. In addition to this there must be added cooperation between the legislature and the executive in the overall process. The current situation has not been helped by argument on both sides as to the extent to which the legislature can tinker with the bill sent to it by the executive. Such unnecessary issues only to serve to bring about further delay and as current events show are not in the best interest of the citizenry.

AARE AFE BABALOLA, OFR, CON, SAN, LL.D.

 

 

 

 

 

 

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