Strain, furore over 2016 budget implementation

The Siege
THE stage is now set for the implementation
of the 2016 budget which has finally been
signed into law. For a budget that was
presented with much gusto and heightened
expectations last December by President
Muhammadu Buhari to be the harbinger of
change, the unending twists and turns created
immense anxiety and strains enough to
diminish its fine potentials and set the tone
for palpable anxiety. The siege began with
claims and counter claims of the document
varnishing and reappearing at the National
Assembly, to the irreconcilable multiple
versions that were disputed by ministers,
which made it difficult to ascertain the
original and fake versions, to small issues of
non presentation of details to the president
and his attendant refusal to sign, smuggling of
items into it post- passage, and threats of
veto, and of course the “constitutional
process”. Although the tango may be passed
off peremptorily as the normal antics of two
arms of government intent on safeguarding its
independence, the face-off goes down much
more than that.
The slide gradually took the shape of a
seething undercurrent of supremacy tussle,
complete with bitterness. But in a deft move,
the senate spokesman Senator Sabi Abdullahi
attempted to douse the tension emanating
from the tiff by declaring that “contrary to
reports in the media, there were no contro­
versies on the budget, and the senate was not
threatening any arm of government or individ­
ual”. He clarified the grey areas that needed
fine tuning, and even expressed the desire of
the senate in an executive session to see to
the resolution of the impasse by all means
possible and in good time. And it came to
pass. He further explained: “The constitution
has taken note of this kind of scenario where
you may have omissions or shortfalls of
allocations, and the constitution is very clear
on what you need to do, which is to sign the
budget and then submit a supplementary
appropriation”. The burgeoning struggle within
the ruling party by the three major power
blocs that constitute it to seize control of the
party is largely seen as responsible for the
problems that delayed the passage of the
budget. The dwindling economic fortunes, the
energy crises, the lingering fuel shortages,
PMS(Premium Motor Spirit) price hike and
protest strike by a faction of the NLC( Nigeria
Lab our Congress) have all combined to
vitiate its vision on the budget. Beyond this,
the parlous security situation occasioning
waves of kidnappings, murders, and clashes
between Fulani herdsmen and farmers have
cast a pall on the high expectations of the
people on the budget. Added to this is the
frosty relationship between the senate
president and the president. Eventually reason
prevailed and the budget was harmonized and
signed. With the presidential assent, the real
battle to protect the integrity of the budget,
and get it to work for the people by
actualizing its vision may have begun in
earnest.
Anxiety
Industrialists, businessmen, professionals and
other Nigerians from different walks of life
have expressed apprehension over the delay
in the implementation of the budget, Chief
Reagan Okoh who runs a feed mill factory in
the Ikorodu area of lagos expressed regrets
that the delay has actually impacted on the
performance of his firm in this first quarter of
the year . “ We have been producing at half
our capacity, and our hope of rejuvenating the
business has been on the full implementation
of the budget. Our customers have not been
coming as before and their excuse is that the
business climate is harsh,” he told Sunday
Sun . The assent by the president served as a
huge relief, paving the way for the full
implementation. While the president says that
the budget must be able to work for the
people, the senate president Bukola Saraki,
who witnessed the assent, insists that with
the signing of the budget, “what is important
now is its implementation. The figure signed
is slightly lower than what the executive
submitted. What was eventually signed was
6.66 trillion naira on the revenue assumption
of $38crude oil price. The budget proposals
submitted in December 2015 was 6.7 trillion
Naira, of which, 351.3 billion Naira was for
statutory transfers. One trillion, four hundred
and seventy –five billion, three hundred and
twenty million Naira was for debt service,
while two trillion, six hundred and forty eight
billion, six hundred million Naira was set aside
for recurrent (non debt) expenditure.
Strategic Priority Programmes
The government has announced that it has
mapped out 34 strategic priority programmes
and projects it intends to achieve with the
2016 budget. These include a capital spend
minimum of 30% annually, an appropriate and
predictable exchange regime by the end of
2016, increased low interest lending rate of
9%, self sufficiency in tomato paste in 2016
and rice production by 2018. It also plans to
increase local production of maize, soya
beans, poultry and livestock, and to stop
import.
Implementation
Budget implementation challenge in Nigeria is
perennial. The Northern Elders Forum, NEF is
already calling for more allocations to the
region for capital projects. In a letter to the
president recently signed by Alhaji Maitama
Sule, the body based their demand on the fact
that the “south enjoys more than 70% of the
recurrent expenditure”. They are not alone.
The Niger Delta is also asking for a lion share
of the budget. The south- south caucus in the
National Assembly who were miffed over the
exclusion of the Lagos – Calabar rail project
met and expressed misgivings over their own
share of the budget especially as the zone is
perceived as the hen that lays the golden egg.
It is the same song of neglect in the South
east and south west. The founder of the All
Progressives Grand Alliance, APGA and
former presidential candidate of the United
Nigeria Peoples Party, UNPP Chief Chekwas
Okorie expressed pessimism that this year’s
budget will not be dogged by the usual
problems associated with budget
implementation in Nigeria. “There may not be
much improvement. Look at the time lag
between when it was submitted to the
National Assembly and when it was signed. If
it took that long, then don’t expect much in
the implementation. Former Deputy National
chairman of the Peoples Democratic Party,
PDP Chief Bode George expressed similar
views, but however added that this issue of
budget implementation “is responsible for our
poor socio-economic and infrastructural
development”. Under incremental budgeting
which the nation has embraced over the
years, a certain percentage is added or
subtracted from previous period’s figures to
arrive at new period’s budget. Okorie, who is
also an economist, averred a preference for
zero budgeting where “every programme is re
evaluated on its merit, as if previous budgets
never existed. The starting points are the
results hoped to achieve, and every debate
about budget implementation is done prior to
passage. Nigeria’s budgeting has been
incremental, overly politicized and not
executed by experts, but merely based on
benchmark price and quota of daily oil
production. There is also the challenge of
distortion in fiscal transparency.
In all, the nature and style of implementation
of this year’s budget will determine the shape
of the economy by the end of the year.