N8.6trn 2018 Budget:  Poor implementation becoming culture in Nigeria – Economic Expert


By Matthew Denis

The Federal Government budget for 2018, which stood at N8.6trn, has continue to get divergent opinions from eminent Nigerians, concerning the implementation stage of the ongoing budget.
President Muhammad Buhari, while presenting the budget last week Tuesday before the National Assembly tagged it as “Budget of Consolidation”.
The President said “The 2018 Budget will consolidate on the achievements of previous budgets and deliver on Nigeria’s Economic Recovery and Growth Plan (ERGP) 2018 – 2020.
“One of the targets we set for gauging our progress in creating an enabling environment for business was to achieve a positive movement in the World Ease of Doing Business Index. You would recall Nigeria experienced a decade-long decline in this ranking. In 2008, Nigeria was ranked 120th. By 2015, our situation had deteriorated to 169th of the 189 countries surveyed. Our very simple, logical and user-friendly reforms are reversing this trend. A recently released World Bank business ranking report announced that Nigeria had moved 24 places to 145th position in 2017. I am delighted that we have met and even surpassed our target of moving at least 20 paces up this global ranking. The same World Bank report also stated that Nigeria is among the top 10 reforming countries in the world.
According to him, the priorities for the 2018 Budget Proposals are for a Budget of Consolidation. The principal objective will be to reinforce and build on our recent accomplishments. Specifically, we will sustain the reflationary policies of our past two budgets. In this regard, the key parameters and assumptions for the 2018 Budget are as set out in the 2018-2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP). These include:
Benchmark of US$45 per barrel; Oil production estimate of 2.3 million barrels per day, including condensates; Exchange rate of N305/US$ for 2018;  Real GDP growth of 3.5 percent; and Inflation Rate of 12.4 percent.
On the Proposed Expenditure for 2018, A total expenditure of 8.612 trillion Naira is proposed for 2018. This is a nominal increase of 16 percent above the 2017 Budget estimate. In keeping with our policy, 30.8 percent (or 2.652 trillion Naira) of aggregate expenditure (inclusive of capital in Statutory Transfers) has been allocated to the capital budget.
The proposed 8.612 trillion Naira of 2018 Aggregate Expenditure comprises  Recurrent Costs of N3.494 trillion; debt Service of N2.014 trillion; Statutory Transfers of about N456 billion; Sinking Fund of N220 billion (to retire maturing bond to Local Contractors);  Capital Expenditure of N2.428 trillion (excluding the capital component of Statutory Transfers).
To consolidate on the momentum of the 2017 Budget’s implementation, many ongoing capital projects have been provided for in the 2018 Budget. This is in line with our commitment to appropriately fund ongoing capital projects to completion. By allocating 30.8 percent of the 2018 Budget to capital expenditure, the Federal Government is also demonstrating its strong commitment to investing in critical infrastructure capable of spurring growth and creating jobs in the Nigerian economy.
The Key capital spending allocations in the 2018 Budget include: Power, Works and Housing: N555.88 billion; Transportation: N263.10 billion;  Special  Intervention Programmes: N150.00 billion; Defence: N145.00 billion; Agriculture and Rural Development N118.98 billion; Water Resources: N95.11 billion; Industry, Trade and Investment: N82.92 billion, Interior: N63.26 billion; Education N61.73 billion; Universal Basic Education Commission: N109.06 billion; Health: N71.11 billion; Federal Capital Territory: N40.30 billion, Zonal Intervention Projects N100.00 billion; North East Intervention Fund N45.00 billion; Niger Delta Ministry: N53.89 billion; and Niger Delta Development Commission: N71.20 billion.
President Buhari noted “I had previously indicated, we aim to consolidate on our achievements in 2017. We shall meet our counterpart funding obligations. We shall complete all ongoing projects. And we shall carry forward all strategic projects that were budgeted for but which we were unable to kick start due to liquidity challenges, late passage of the budget, prolonged contractual negotiations, and other matters.”
The president concluded his speech by calling on the members of the National Assembly to cooperate with the executive for prompt passage of the budget.
He said “Nigeria is currently emerging from a very difficult economic period. If we all cooperate, and support one another, we can consolidate on our exit from the recession and firmly position Nigeria for economic prosperity. All the projects presented within this Budget have been carefully selected and subjected to extensive consultations and stakeholder engagements. As a Government, we are determined to bring succour to our people, improve their lives, and deliver on our promises to them. 2018 is a crucial year as we strive to ensure that we consolidate our successes and institutionalize the policies and practices that drove this turnaround. I appeal to you to swiftly consider and pass the 2018 Appropriation Bill.
The National Assembly (NASS) led by the Senate President, Dr. Bukola Saraki during his speech clearly gave the Executive arms of government conditions of mutual relationship with the members of the NASS for smooth and early passage of the 2018 budget.
He specifically said  “The early passage of the 2018 budget will depend on the kind of relationship that exists between the executive and the legislature.
“The 469 National Assembly members in this chamber are your true partners, and I urge that you continue to lobby them so that we can achieve speedy passage of the budget and deliver projects to Nigerians”,.
On his part via a vote of thanks, Speaker Yakubu Dogara said as legislators, they are wary of the prospect of the executive totally abandoning the implementation of the 2017 budget and the consequences of it.
“Although, Nigeria has moved out of recession, a lot of families are still wallowing in poverty and we must never allow this country to slide back into recession ever again”.
He noted that the 2018 budget passage may suffer delay caused by inadequate consultations between the MDAs and various over-sighting committees of the National Assembly.
Dogara said: “Mr. President, as legislators, what agitates us is the prospects of totally abandoning the 2017 budget and the dire consequences of doing so.
“The questions that must be answered include whether we have effectively enforced 2017 fiscal targets and whether managers have complied with the budget as authorised by the legislature.
“Our experience with the implementation of the 2016 budget amply demonstrates that obeying our appropriation laws maximises the release of our potential while violating the appropriation laws caps the release of our national potential.
“This means that we have to redouble our efforts in implementing the 2017 budget, if we must retire it in January or at the very least rollover most of the projects in 2017 budget to 2018. No need to remind us that fiscal indiscipline is as grievous as corruption which this government is busy eliminating.”
Some lawmakers expressed satisfaction while others are not satisfied with the budget which has a nominal increase of 16 per cent above the 2017 budget estimate.
Kabiru Marafa (APC-Zamfara) said it was a budget of hope and a realistic one, looking at its parameters. He noted that there are various indications that the budget proposal is realistic.
However, Mao Ohuabunwa (PDP-Abia) said his concern was the implementation of the 2017 budget.
He stressed it was the implementation of the budget that would impact positively on the people.
He added that “I am speaking on behalf of Nigerians as a senator that we should talk more about implementation than applauding the presentation of the budget proposal.
“That is why I am insisting that we should know the level of implementation of the 2017 budget before we talk of 2018. On the face value, N8.6 trillion is an increment over 2017 estimate but what is the level of implementation of the previous budget?”
Speaking on the 2018 budget, an Economic Expert, Associate Prof. Remi Medupin, the Dean Faculty of Management Sciences, Al-Hikmah University, Ilorin, explained that the budget can be viewed from two perspectives.
He said “the percentage posted for the budget should be proliferated because the current budget suppose to last till March ending of 2018. It is next year that this budget will run from January to December, I’m not saying that the percentage of the implementation is  low but we need to be careful about it.
“Even President Buhari, during his address, noted that they are targeting 50 per cent implementation by December of the current budget which is all the same still low.
Medupin stressed that the second point we need to bear in mind is that we hope the concern of the legislators is not on their constituency projects but the interest of Nigerians.
He said “in either way, one thing is clear, poor implementation of budget in Nigeria is becoming a cultural trend. If we go down memory lane, the first National Plan between 1962 to 1968, the implementation strategic was poorly executed.
“I think our leaders should take a lesson from this consistent lapses and do away with the idea of poor implementation.
According to him, the National Assembly should not be selfish in their demands for mutual relationship with the Executive arm of government for early passage of the budget but embrace patriotic interest that Nigerians have been clamouring for.
He suggested that the Ministry of National Planning should introduce Monitoring and Evacuation framework (M&E) to develop the needs assessment of the budget periodically.
The Don said ” I’m saying that this aspects is completely faulty in the country. The M&E will assist us in examining the budget performance quarterly.
The expert added that the allocation of the lion shares of about N555 billion to Works, Power and Housing is in order in terms of priority.
He said “Aside housing, work and power consists the bedrock of the nation infrastructural development. The priority to it is in order as far as I’m concern because it’s efficiently and effectively submitted as it constitute the base of economy development.
“The Federal Government should focus on implementation strategies and intensify effort on fighting war against corruption so that they will not just spend the money without achieving the objective of the budget.
“Effective implementation and efficient delivery with transparency and accountability is the priority of all Nigerians. He added.

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