The signing into law of the 2018 Appropriation Bill by President Muhammadu Buhari has elicited mixed reactions from stakeholders. While some urge the executive and legislative arms to sheathe their swords to move the country forward, others say the budget may not fulfil its aspirations as it might be bogged down by politicking, report Lucas Ajanaku, Emeka Ugwuanyi, Chikodi Okereocha, Okwy Iroegbu-Chikezie Collins Nweze, Akinola Ajibade and Toba Agboola.
Varied reactions have greeted the signing of the 2018 Budget by President Muhammadu Buhari.
The President, Manufacturer’s Association of Nigeria (MAN), Dr Frank Udemba Jacobs, voiced his reservation as it relates to the cutting of the provisions for Export Expansion Grant (EEG).
He described the cutting of N14.5 billion from the Special Economic Zones/Industrial Parks, which are key industrialization initiatives of the current administration as unfortunate.
He said: “It’s not only counterproductive and inimical to the economic diversification policy of this administration but suggests that NASS did not fully understand the importance of those items on the growth of manufactured products export or were ill-advised. For many years, MAN had advocated for the reinstatement of the EEG, which was suspended in 2014, because it is critical to enabling manufacturers to produce for export and thus contribute to the foreign exchange earning of the country”.
According to Mr. President, “the provisions for some nationally/regionally strategic infrastructure projects such as Counter-part funding for the Mambilla Power Plant, Second Niger Bridge/ancillary roads, the East-West Road, Bonny-Bodo Road, Lagos-Ibadan Expressway and Itakpe-Ajaokuta Rail Project were cut by an aggregate of 11.5billion Naira”.
Jacob said that MAN frowns at the cut in the critical infrastructure provisions at this time when the country is confronted with dearth of basic infrastructure which has rendered our products globally uncompetitive.
He explained that they had expected more funds to be appropriated and also advocated for public private partnership to augment government appropriations in this regard.
Generally we are disappointed by the action of the National Assembly specifically as it concerns our observations he added.
To the Director General, Lagos chamber of Commerce & Industry , Mr. Muda Yusuf the challenges of the budgeting process have become a recurring decimal and quite regrettable. According to him the story has been the same since 1999, he called for an end to it.
He said: “We need to put an end to this situation. First, we need to clarify some constitutional issues with regards to the boundaries of authority and responsibilities of the executive and the national assembly on the budgeting process. This will require an urgent interpretation of the relevant sections of the constitution. It is a matter that requires the urgent intervention of the judiciary to clarify. We need to know for instance whether the National Assembly has the powers to undertake the kind of alterations that was done to the 2018 budget”.
He also stated that it is difficult to find justifications for the magnitude and character of the changes that was done and the decision to introduce federal character principle into the budgeting process, noting that this kind of mindset is surely not in the long-term interest of the country and the economy. According to him strategic projects need to be recognized and accorded the right priority in the budget irrespective of the geopolitical location. He argued that It is in the overall interest of the national economy to do so. A national budget is not meant to address micro level issues; it is typically focused on big programmes and projects with impactful systemic effects he added.
Furthermore, he said that there is a need to improve on the timing of budget preparations, timeframe for the consideration by the national assembly and assent by the President. According to him there should be statutory timelines for this purpose in order to bring some discipline to the process. He further advised on a better communication between the national Assembly and the Executive.
National President, the Nigeria Chamber of Commerce, Industry, Mines and Agriculture, Iyalode Alaba Lawson criticized the delay in the passage of the 2018 budget into law insisting that it is neither good for the economy or our nation’s developmental aspirations for inclusive growth and sustainable development.
According to her It is particularly not helpful to the Private Sector which government has acknowledged as the engine of growth and development of the economy.
She said: “While we acknowledge the statutory role of the Legislature in reviewing the budget presented by the Executive, we counsel that these projects be reconsidered for approval as soon as Mr. President presents the supplementary budget to the legislature as promised in his speech. We wish to use this opportunity to reaffirm the need for the Legislature and Executive to devise consultative mechanisms that will ensure quick passage and accent of the yearly budget which is a veritable guide to business operators to plan their yearly activities.
It is a serious concern for the Organised private Sector (OPS) that critical areas of Health, Security and Infrastructure was tampered by the National Assembly we urge for a quick redress she added.
Furthermore, Alaba –Lawson counseled heads of Ministries, Departments and Agencies of Government to swing into action for the implementation of the budget to make up for time already lost in the 2018 budget year.
The Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, said it is good that the budget has been signed after all, saying the inadequacies notwithstanding, ‘the country and economy have to move forward. So I think the president did the right thing’ by assenting to the budget.
Speaking on the expected impact of the budget on the telecoms sector, Adebayo said the sector operates within the larger economy. By this very fact, he said when there is development on the other sectors of the economy, the telecoms sector would be affected.
“Provided there is movement in other sectors of the economy our industry by extension will also move forward,” he said.
Adebayo said since the passage of the budget was unnecessarily delayed, the executive arm of the government must waste no time but move to full implementation so that the economy would breathe fresh air. “My advice to the Federal Government is to move speedily towards budget implementation to achieve the best they can within the short time to year end,” Adebayo said.
The President, Oil & Gas Trainers’ Association of Nigeria (OGTAN), Dr. MayowaAfe, said: “Nigerians have talked so much about the faulty fiscal planning and budget delays over the years. As a country, we must endeavour to operate a January-to-December budget timeline as obtainable all over the world. To sign the budget for 2018 fiscal year in late June of the same year is absolutely unwholesome. The timeline is very late.
“The Executive arm of the government should try and submit the budget proposals of each year to the National Assembly in September. For instance, budget proposals for 2019 should be submitted to the National Assembly in September 2018. This will enable the National Assembly enough time to work on it. Also the National Assembly needs to work harder to ensure the budget is ready before end of December so it would be able to perform its duty as a budget for economic growth.
“The entire world runs a January-to-December budget and Nigeria’s own must not be an exception. We must run our budget in line with international acceptable standard. The continued passage of budget by end of first half of the year shuts out a lot of investments from the country. How can an investor work with a budget signed in June for operation in the same year?
“The late signing of budget every year has a lot of negative implication for our image as a country. The outside doesn’t take us serious-minded nation and this perception is taking a grave toll on not just the oil and gas industry but the economy at large.
“If the budget is to operate from June 2018 to June 2019, the National Assembly should, therefore, call it budget 2018/19 and not 2018 budget.”
On the increase of budget oil benchmark to $50.5 per barrel, Afe said the increase is in order and sustainable. Buttressing his reason, Afe said the lingering conflict between Iran and the United States, issues in the Middle East, among others will keep oil prices above $60 per barrel. According to him, Iran’s production is rising to three million barrels per day, if US goes ahead to slam sanction on Iran, all American oil companies will cease to operate there and this means drop in supply to the global oil market.
Minister of Budget and National Planning, Udoma Udo Udoma, said Nigeria’s journey out of the recent economic recession has helped us reset our priorities and to focus more on reforms and activities that have both short- and long-term bearings on sustainable economic growth.
“In line with the Economic Recovery and Growth Plan (ERGP), we are seeking to optimise derivable benefits from oil by restructuring our equity in JV oil assets while we intensify our efforts at accelerating economic diversification and non-oil revenue generation. Already, diversification efforts are yielding positive results with significant growth in the non-oil sector,” he said.
Continuing, Udoma, said government will continue to create the enabling environment for private sector to increase their investment and contribute significantly to job creation and economic growth.
“The goal of the 2018 budget is to consolidate the gains recorded so far by this Administration, and ensure that all Nigerians benefit from the economic progress.
He said the 2018 budget is designed to consolidate on the achievements of the 2016 budget of change and the 2017 Budget of Recovery & Growth, and advance delivery of the goals of Nigeria’s Economic Recovery and Growth Plan (ERGP) 2017 to 2020.
Udoma said the 2018 Budget proposal seeks to continue the reflationary policies of the 2016 and 2017 Budgets which helped put the economy back on the path of growth.
“Thus, we plan to continue to spend more on ongoing infrastructure projects that have potentials for job creation and inclusive growth; We will continue to leverage private capital and counterpart funding for the delivery of infrastructure projects. As with 2016 and 2017 budgets, the 2018 budget has been prepared on the Zero Based Budget (ZBB) Principles,” he said.
Also speaking, former Central Bank of Nigeria (CBN) Deputy Governor, Kingsley Moghalu, said: “On signing the 2018 appropriation bill into law, yesterday, at the Presidential Villa in Abuja, President Muhammadu Buhari immediately relaunched the blame game that has delayed the budget for six months. President Buhari expressed concerns over the alterations made by the National Assembly to the appropriation bill before passing it. Buhari said the alterations will make the budget difficult to implement”.
According to Moghalu, the National Assembly alluded to its “constitutional power of appropriation,” which empowers it to alter the budget proposal submitted to it by the President. “The National Assembly also blames the executive for late submission of the 2018 budget and cited the failure of heads of MDAs to defend their budgets before the lawmakers on time. This blame game smack of lack of leadership to make the budgetary process efficient and effective in serving the people of Nigeria,” he said.
“At the root of Buhari’s complaint is the putative “constitutional power of appropriation” claimed by the National Assembly;we believe the executive should lay the controversy to rest by seeking judicial interpretation of the 1999 Constitution (as amended), on the power of the National Assembly to alter the yearly appropriation bill. If the power is legally valid, then effective collaboration between the executive and the legislature on the yearly budgets becomes imperative,” he added.
The Buhari administration has glossed over this judicial solution to, once and for all, solve the perennial problem of “budget padding.” The administration is instead relying on its trusted propaganda machinery, which entails blaming everyone else but itself and leaving Nigerian people un-served or underserved with fiscal policy.
The 2018 budget has seen the continuation with the longer-term dislocation of fiscal policy by the Buhari administration. In 2016, Buhari launched a streak of expansionary budgeting, fuelled by excessive debt. From a budget of N4.4 trillion in 2015, the budget rose sharply to N6.06 trillion in 2016, N7.4 trillion in 2017, and N9.12 trillion in 2018. On signing the latest budget, the President announced his plan for a supplementary budget in 2018. In just three years, the budget has more than doubled.
Also reacting to the budget, the President, Association of Telecoms Companies of Nigeria (ATCON), OlusolaTeniola, lamented that the 2018 budget demonstrates the incapability of government to further fund and spend on much the needed infrastructure projects like power and information communication technology (ICT) and other essential items without reducing the recurrent expenditure to a level that reflects greater efficiencies in the way governance is run in the country. It also reflects a reality that the government’s diversification programme is slowing down or in doubt. “The fact that many projects were extracted out and replaced with National Assembly projects demonstrates a problem in what exactly is going to be implemented in 2018 and early 2019 to support this diversification,” he said.
He said Buhari needs to address his concerns with the legislature and other stakeholders in the polity to ensure that any gaps that exist are rectified in a manner that benefits the citizens of the country. The fact that differences exists is not a problem, he said, adding that area that needs to be really addressed is transparency and relevancy of projects that both sides of the government seek as priority within the remaining term of the administration.
On the impact of the budget, he lamented that it doesn’t prioritise ICT let alone telecoms.”So this budget will only indirectly impact the telecoms sector, when the government removes the 38 different taxes and levies being applied to the sector to fund government spending. Government also needs to address the leakages in the 2018 budget, as the current taxes contributed by the telecoms sector alone per year is more than N450billion a year and this is not reflected properly in their revenue line – this highlights a problem with accountability within government and short changes the effort that the industry plays in the nation’s economic development,” Teniola said.
He saidcollaboration is not only key between the executive arm of government but also with legislature, the private sector and civic society in ensuring that this budget delivers the dividends to each citizen and more importantly that the private sector has the much needed funds that government seeks to deliver on its promises. However, he said this can only be harnessed when government provides an enabling environment and a level of accountability as to how taxes are collected and spent to provide the basics to its citizens. The recurring expenditure is one line item that speaks to that, it needs to be reduced and not increased going forward.
Former Rivers State Chairman, Trade Union Congress (TUC) of Nigeria, Comrade Chika Onuegbu, said there is no reason to be optimistic that the 2018 budget will impact on the economy and Nigerians.
Describing the signing of the N9.12 trillion 2018 budget into law by Buhari as belated, Onuegbu said the budget, which came on the eve of the kick off of the political process for the 2019 elections, has cast doubt over the possibility of the budget making any significant impacts.
The trade unionist, who is also the past National Industrial Officer of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), predicted that with the budget coming nine months to the 2019 elections, the capital expenditure component of the budget may not achieve 40 per cent performance.
“From the next quarter, primaries will commence for next year elections, so when will the political class seat down to implement the capital aspect of the budget,” Onuegbu asked rhetorically.
He said what matters is budget performance, which is the percentage of implementation of the budget, not necessarily what is in the budget.
He regretted that consistently Nigeria’s budgets have been passed very late, making the implementation of its capital component extremely difficult. He blamed this on what he called “governance challenges.”
This, according to him, was responsible for why the executive and the legislature, despite being under the same ruling All Progressives Congress (APC), were not on the same page in respect of the 2018 budget.
Nigeria Labour Congress (NLC) has said National Assembly acted in their own interest and not in the interest of the Nigerians.
Reacting to the allegation by the President that the National Assembly reduced some of the vital project and replaced it with their own, NLC Secretary General, Comrade Peter Oso-Ezon said: “What the lawmakers did is not in the interest of the Nigerians and the people they represents. They acted in their own selfish interest. This is very bad for the nation and the economy. They were put there to serve the interest of their people, but unfortunately, they did not.”
He said there is nothing wrong for the lawmakers to go through the budget and make amendment, saying that this is their primary assignment.
“We are not saying that they should not amend the budget. Infact it is their primary assignment . There should be check and balance.However, looking at the budget critically, the amendment they made did not reflect the national interest.
“The President has grudgingly signed it. This is not good enough. Both the Executive and the lawmakers are supposed to look into it together again, but because of the delay, they could not,” he said.
The Chief Executive Officer, Association of Nigerian Electricity Distributors(ANED), AzuObiaya however saidit would be premature for ANED to comment on the budget, that has not been scrutinised or analysed. However, he prayed that the budget is well implemented by the Federal Government as relates to critical sectors such as oil, power among others, which he said are the barometer s that measurethe performance of the economy.
He said ANED and other stakeholders in the value chain would be happy to see the budget correcting some misalignments that exist in the electricity value chain.
He said the available transmission capacity in the industry is not enough to wheel the quantum of power generated by the power generation companies(GenCos), adding that it would be a good thing if there provisions for such activities in the budget. He said customers, who are at the end of the value chain would be happy when the DisCos are able to share the energy wheeled by the Transmission Company of Nigeria (TCN).
South-West Chairman, Independent Petroleum Marketers Association of Nigeria (IPMAN), AlhajiDebOAkande,said he is yet to study the 2018 budget. He urged the government to ensure that there is no mismatch in the growth recorded in the nation’s oil industry with that of the global oil industry, arguing that the purpose of consolidating the gains which the industry recorded in 2017 would be defeated, if such things happen