The National Assembly has delayed the passage of the budget by a week after it had earlier promised to pass it by November 28th 2019.
Chairman of the senate appropriations committee Barau Jibrin, failed to deliver his committee report on the 26th of November as directed by the President of the Senate, Ahmed Lawan.
While explaining the reason for the delay, Jibrin said, “We are having sleepless nights and we have been able to put everything together with our team of experts. The stage we are now is where we have done everything in respect to the process. What remains now is to cross-check and make sure that there is no mistake. Crossing all the t’s and dotting all the i’s. Thereafter we will now go to print…what remains now will take us up to Sunday next week”.
The President of the Senate, Ahmed Lawan gave the Jibrin led committee an additional week to present its report.
“The senate will give you an additional week, that is but that is unfailingly, Tuesday next week will be 3rd of December 2019 and by the grace of God, you should be able to lay it here and then the Senate should pass it within that week”. Lawan said.
Similarly, the House of Representatives deferred consideration of the report on the 2020 Appropriation Bill till next Tuesday. Speaker of the house, Femi Gbajabiamila said the consideration and adoption of the report will be delayed to allow a thorough work on it.
Nigeria’s National Assembly has its power conferred on it by sections 80 and 84 of the 1999 Constitution where it has no limitations in its powers to amend the annual Appropriations Bill. Essentially, the National Assembly can amend the draft budget even if this implies a higher level of projected total expenditure, a lower level of projected total revenue, an increase in projected revenue or an increase in the deficit.
President Muhammadu Buhari presented an appropriation bill of N10.33 trillion for the 2020 fiscal year before a joint session of the national assembly on October 8th. The 2020 budget presented is a budget of fiscal consolidation, investing in critical infrastructure, incentivizing the private sector and enhancing social investment programs.
The budget was also accompanied by a finance bill. Its expenditure estimate includes: Statutory transfers of N556.7 billion, Non-debt recurrent expenditure of N4.88 trillion and N2.14 trillion of capital expenditure (excluding the capital component of statutory transfers).
Lawmakers of both chambers have deliberated on the provisions of the budget in separate plenary sessions. While some hailed the president’s propositions, others raised concerns with some aspects of the bill.
The most vocal amongst the critics of the budget was Senate minority leader, Eyinaya Abaribe.
Abaribe had questioned why the amount budgeted for capital expenditure was lower to amount budgeted for debt servicing.
He said “How would you talk about job creation when you do not invest in what will create jobs? Debt servicing as a component is higher than capital expenditure. N2T for capital expenditure, N2.4T for debt servicing. The projected growth that they put in the budget was 1.9% less than the population growth of 2.6%”.
Nigeria’s Budget Cycle
If the budget gets passed by next week as suggested by the president of the Senate, Ahmed Lawan, this will adhere to the fabled January – December fiscal year- regarded as an organic budget calendar.
Since 2014, it has taken an average of 5months for the budget to be approved between presentation date and approval date. According to CSEA Africa, the country’s economy suffers 2.5 percent depression whenever the budget is delayed.
The effect of a late budget passage will see 60% of the 2019 budget be moved into the 2020 budget because the 2019 budget (N8.9tn) was passed in April 2019 but was not assented to by the President until May 2019, implying that 5 months into the fiscal year, budget spending was constrained.
While Nigeria struggles to fix a January – December budget cycle, many countries have gone beyond annual budgeting by embracing three years or more budget cycles. The Russian Duma (parliament) in 2018 reportedly passed the 2019 to 2021 budget with $62 billion surplus. Australia also runs a multi-year budget cycle. The shift makes for better national planning and massive injection of funds into critical infrastructure areas.