President Muhammadu Buhari’s presentation of the 2019 Budget proposal to the joint session of the National Assembly came with many oddities. For instance, never in the history of the country, has budget presentation been turned into a campaign ground for or against the president and the ruling party.
While members of the ruling All Progressives Congress, APC, chanted solidarity songs suggesting another four-year term for the president whose performance in the last three and half years of his first term leaves much to be desired, legislators in the leading opposition Peoples Democratic Party, PDP, sang a discordant tune, suggesting absolute rejection of the president’s bid for another term. But that was not the business of the day.
Soon after the president rounded off his presentation cheers from his party members and jeers from the opposition followed, truncating further proceedings. Soon, the president and his cabinet members left the National Assembly complex amidst confusion.
Due to what appears to be irreconcilable political differences within the APC, Saraki and Dogara have since returned to the PDP, thereby creating a very serious leadership problem for the APC and the Buhari administration. Their defection will have a telling effect on the 2019 Budget as indicated during the presentation.
The interruption of the president while he was delivering his speech and the booing that accompanied it is bad omen for Nigeria. Even Buhari recognised that fact when he told the lawmakers that the world was watching and that they ought to be above that. The unusual drama at the presentation is indicative of what will happen to the budget in the months to come. That rowdy session has set the tone for an unfriendly approach to the passage of the budget. It will be a pleasant surprise if the budget is passed into law in the next few months by which time, the country would be going into general elections.
The 2019 Budget proposal is based on certain key assumptions like Oil price benchmark of $60 per barrel; Oil production estimate of 2.3 million barrels per day, including condensates; Exchange rate of N305/$; Real GDP growth of 3.01 percent; and Inflation Rate of 9.98 percent.
Close watchers of the Nigerian economy and the budget process view this as fairly conservative, given the fact that oil price for instance, currently hovers around the benchmark proposed in the budget although there are fears of possible further slide. So also is the oil production estimate, which could not achieve the projection of the current budget; and the exchange rate, which the Central Bank of Nigeria, CBN, has struggled to stabilize at below N310/$ over time at the official exchange rate market.
Economic experts are of the view that the most critical element in a budget of this nature is implementation of the capital projects. The late submission of the budget to the National Assembly is a sign post to the fact that the presidency should not expect early passage of the Appropriation Bill. This is worsened by the frosty relationship that exists between the president and the leadership of the two arms of the national Assembly.
The president told the joint session that of the total appropriation of N9.12 trillion, N4.59 trillion had been spent by 30th September, 2018, against the prorated expenditure target of N6.84 trillion. Although this represents 67 percent performance, it is not particularly a good performance in the sense that debt service and the implementation of non-debt recurrent expenditure, notably payment of workers’ salaries and pensions constitute part of it.
The delay in the passage of the 2018 Budget on June 20, 2018, is part of the challenges the Buhari administration is facing in fixing the economy. Late presentation of budgets, and bickering with legislators over party matters have continued to impact negatively on budget implementation especially, the capital project components.
A review of the 2018 Budget indicates that out of N2.428 trillion (excluding the capital component of statutory transfers) earmarked for capital expenditure in the budget, only about N820.57 billion had been released for capital projects as at December 14, 2018.
READ ALSO: FG withdraws $1.68b from ECA in month
Although President Buhari seemed to realise the implications of late passage of budget in his speech, what he explained to the lawmakers was that “We have carried over capital projects that were not likely to be fully funded by year-end 2018 to the 2019 Budget.”
The president also said that the 2019 Budget proposal is intended to further place the economy on the path of inclusive, diversified and sustainable growth in order to continue to lift significant numbers of our citizens out of poverty. Beyond the proclamation, this may be difficult to achieve, given the slow pace of implementation.
He also explained that the underlying drivers of the 2019 revenue projections have been adjusted to reflect current realities. Even though the president said allocations to Ministries, Departments and Agencies, MDAs of government were guided by the three objectives of his administration’s Economic Recovery and Growth Plan, ERGP, which are, Restoring and Sustaining Growth; Investing in our People and Building a Globally Competitive Economy, there are still doubts as to how the implementation would be carried out so that the people can feel the impact beyond claims of economic recovery and growth.