Economists, activists review impact of non-passage of 2018 budget

On November7, 2017, President Muhammadu Buhari presented the 2018 budget of N8.612 trillion entitled: “Budget of Consolidation’’ to the National Assembly.

The federal government also made a commitment to submit the 2018 Appropriation Bill to the National Assembly so that it could be passed into law before the end of 2017.

However, six months after the presentation, the National Assembly has yet to approve it for the president to assent to the document to make it law.

The delay in the passage of the 2018 budget has been a cause of concern to many Nigerians, especially experts in various fields, who bare their minds on the development.

Sheriffdeen Tella of Olabisi Onabanjo University, Ago-Iwoye, Ogun, said that it was shameful that long after the 2018 budget estimate was submitted to the National Assembly; it had yet to be passed.

Mr Tella, a professor, said that the legislature had failed to perform its function of completing the consideration and authorising expenditure in the fifth month into the year.

“It seems they do not know that one of the main duties of the National Assembly is to pass the federal budget on time to facilitate economic growth and development.

“Non-passage of the bill has locked down rapid recovery from the recession and movement towards growth.

“This is because capital expenditure aspect of the budget, which has higher growth multiplier effects on the economy, cannot be executed without authorisation of the budget by the National Assembly,’’ he said.

According to him, the economy will not witness meaningful growth unless the budget is passed on time to complement the monetary policy to be introduced by the newly inaugurated Monetary Policy Committee (MPC).

“It takes time for implemented policies to have effect on the economy; therefore, we should not expect much improvement in output of the capital market and the economy at large,’’ Mr Tella said.

Peter Ozo-Eson, the General Secretary, Nigeria Labour Congress (NLC), also said that the continuous delay was unfortunate.

“We are already into the second quarter of the year and the budget is still not passed and we cannot even say definitely when it will be passed.

“The budget is supposed to among other things show the direction of the economic policies for the year, which will then influence the economic planning by economic agents, both in the private and the public sector.

“People respond to the economy of the budget, so if by the second quarter, we still have not passed the budget, it means that we are having economic function without direction.

“This does not help the economic performance of the country and I think it is rather sad.

“`Whatsoever, whosoever that are responsible for the delay, I think they have to be called to order in the interest of the country and the budget needs to be passed,’’ he said.

Some financial experts even attributed the retention of the Monetary Policy Ratio (MPR) at 14 per cent by the Central Bank of Nigeria (CBN) to the non-passage of the 2018 budget.

They said that the absence of a fiscal policy direction in the economy was inevitable for the CBN to decide otherwise.

The MPC, in its first meeting in 2018, retained the benchmark interest rate at 14 per cent, the Cash Reserve Ratio (CRR) at 22.5 per cent and the liquidity ratio at 30 per cent.

The bank had retained the benchmark interest rate at 14 per cent alongside other monetary policy rates since July 2016, citing inflationary pressure and a fragile post recession economy.

In his opinion, Mazi Unegbu, former President, Chartered Institute of Bankers of Nigeria (CIBN), said that the MPC would tinker with the rate when the budget would have been approved.

Mr Unegbu said that the members had no choice but to retain the rates the way they were at the moment because the budget was still pending as well as other economic factors.

He said that the capital market had been experiencing a mixed performance, while the interest rate for manufacturing companies had gone up.

Also, Aminu Gwadabe, the President, Association of Bureaux Des Change Operators of Nigeria, said that rate retention was a momentary response to the political and security challenges in the nation’s political economy.

Mr Gwadabe said that the apex bank was very cautious in its decision, considering the uncertainties in the nations’ fiscal policy arising from the non-passage of the 2018 budget.

Eze Onyekpere, Lead Director, Centre for Social Justice, a Civil Society Organisation, also said that the delay was impacting negatively on the economy.

He said that the impact was being felt negatively as the budget was required by public and private sector stakeholders to plan and manage their economic activities.

“The delay compounds the already parlous economic situation and shows a country that is afloat and without a focused leadership at both the executive and legislative levels,’’ he observed.

In his view, Edwin Uche, President, Maize Growers, Processors and Marketers Association of Nigeria, said that the delay budget had affected maize cultivation in the country.

He said that timely implementation of federal government’s programme on maize cultivation was key to the success of the agriculture sector.

He also said that decision makers and the budget handlers should be more proactive and less bureaucratic to make the process work.

According to him, cultivation of maize is time-bound and the time requirements for the crop growing must be strictly followed to achieve food sufficiency in the country.

“The timely implementation of every set programme of the federal government should be prioritised by the handlers of the budget.

“Most of the time, we have programme designs but we are often comfortable with a situation where the implementation process tends not to affect the time of cultivation.

“Once the cultivation timetable is punctured or we have a problem with implementing the programme based on the environmental or natural timetable, it affects the yields and outputs.

“When there is delay in implementing the programmes in the Federal Government’s budget, maize farmers might lose interests or become agitated,’’ he said.

In spite of all of these concerns, the National Assembly has, over time, given varying dates for the passage of the budget.

Contrary to expectations that the 2018 budget would be passed in April, the National Assembly, had on March 27, postponed the approval of the budget till May.

Mustapha Dawaki, Chairman, House Committee on Appropriations, explained that if the budget was not passed by April 24, the N2.06 trillion 2017 capital budget would run until May 31.

Mr Dawaki made this known at the 2018 National Budget Hearing in Abuja, which was jointly organised by the Senate and House Committees on Appropriation.

However, the two chambers of the National Assembly attribute the delay in the budget passage to refusal of heads of Ministries, Departments and parastatal Agencies (MDAs) to come forward and defend their respective budget proposals.

Irrespective of challenges delaying the 2018 budget passage, concerned Nigerians believe that the budget will be passed very soon to guarantee development.

(NANFeatures)