The Lagos Chamber of Commerce & Industry (LCCI) has observed the alleged padding, duplication, inconsistencies and inaccuracies of items in the 2018 Appropriation Bill.
Its Director-General Muda Yusuf in a statement referred to the complaints of legislators that some pronouncements made by the President in his budget presentation speech were not reflected in the submissions made by Heads of some Ministries Departments and Agencies (MDAs) during the defence of their budget proposals.
Calling for a truce between the two arms of government, Yusuf also said there were also complaints of MDAs that did not come fully prepared with necessary information and documents in the prescribed format including
He said: “The National Assembly members also complained that a number of ongoing projects in the 2017 budget were not rolled over to the 2018 budget proposal, thus, showing little or no connection between the two budgets, which results in more projects being abandoned. In preparing the 2018 budget, the executive had indicated that about 50 per cent of the 2017 capital vote would be implemented by the end of 2017 with the balance of 50 percent to be rolled over to 2018. Unfortunately, the implementation of the 2017 budget stood at less than 17 per cent as at the end of 2017 with grave implications for the completion of on-going projects.”
He accused the executive of basing the 2018 budget on faulty estimates and unrealistic projections. Citing the projected N807billion independent revenue in the 2017 budget, only N155billion had been realised by the end of last September, representing a shortfall of 74 percent.
‘’Yet, a similar projection of overN800 billion independent revenue was made in the 2018 budget proposal. There is a possibility that the budget faces the risk of poor implementation from the start if it was based on a faulty foundation of unrealistic assumptions and projections,” he said.
He, however, advised that while the National Assembly may require additional information on the budgets of stat-owned enterprises. This, however, should not affect the early passage of the ‘main budget’ of government, he added.
On the implications of the late passage of the Budget on the Economy and Businesses, the LCCI chief said some of them are a slowdown in the economic recovery process by postponing the multiplier effect of government spending. He said: “If funds for critical projects are not disbursed on time, the tempo of economic activities will be reduced, dragging the economy into a state of inertia and economic decline. The late passage of the budget is therefore a threat to achieving the ERGP targets and to Nigeria’s goal of becoming one of the top 20 economies by 2020″.
Furthermore, he stated that capital expenditure such as infrastructural development, construction work and payment of contractors will also be affected. According to him this is especially of concern when these funds are meant to be channeled towards sectors that improve the ease of doing business, such as transportation and electricity. In his words: “Performance of these sectors is correlated with the success of Nigerian businesses, which are key players in the effort to combat the country’s high unemployment rate. It also affects private sector operators that depend on the budget to plan their activities for each fiscal year. Delay in passing the budget therefore slows down their activities, with negative economic consequences”.
He also posited that in addition to adversely affecting the economy, slow provision of critical infrastructure needed to boost industrial activity negatively affects the country’s ability to export locally made products, and therefore reduces its revenue and foreign exchange from non-oil exports. Secondly he also observed the issue of inadequate absorptive capacity as the country may not be able to spend so much money in such little time. According to him this may result in dislocations in the macroeconomy.
On the way forward, Yusuf said delay in the nation’s budget process has become the new norm in recent years, and has often been caused by disagreements between the executive and legislative arms of government. He urged both arms to work on improving the schedule of the country’s budget process.
