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Recurring delay in passage of Budget: Matters arising

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By Aare Afe Babalola

“The Chilean constitution mandates that the executive provide the legislature its budget 60 days before the end of the fiscal year. While this time- frame is comparable with a number of countries, the consequences of Chilean legislative inaction are especially significant. If the legislature does not approve the budget within 60 days, it automatically becomes law in its entirety, thus under- cutting the leverage of the parliament. I have no doubt that the same can be replicated here in Nigeria”

THIS week I intended to conclude my examination of the lowering of standard for admission into universities in Nigeria. However I consider the delay in the coming into effect of the 2017 Appropriation Act as deserving urgent attention.

I have used the phrase “delay in the coming into effect of the 2017 Appropriation Act” advisedly as I am aware that the passage of the Act involves both the executive and legislative arms of government and that the current delay in the coming effect of the law has been attributed amongst others to the failure of the two arms of government to work in synergy in the overall interest of the citizenry.

Equal and joint responsibility

Thus to employ a phrase such as “delay in the passage of the Appropriation Bill” or “delay in assenting to the Appropriation Bill” would not correctly reflect the true position which is that both arms of government must take equal and joint responsibility for the imbroglio regarding this year’s budget.

Background: In December 2016 President Muhammadu Buhari GCFR presented the 2017 Appropriation Bill to the National Assembly. This was in keeping with the provisions of the Constitution which requires the legislature to pass all bills including the Appropriation Bill. However the National Assembly did not pass the bill until May 11 2017, almost six months after it was presented.

This delay had initially drawn criticism from the public but the the National Assembly had in its defence, attributed the delay to the need for the inclusion of certain government agencies including the construction of a second runway at the Nnamdi Azikiwe Airport, Abuja which were not captured in the original proposal it received from the president. Indeed the President had initially proposed a budget of N7.28 trillion but the National Assembly increased it by N143 billion to N7.44 trillion. However despite the passage by the National Assembly of the Bill, it did not receive Presidential assent until June 12, 2017.

While President Buhari is on medical vacation, the Vice President who by operation of law is now the acting President is yet to give his assent to the Bill. In a move suggestive of the fact that it had come to see the delay as normal in the Nigerian context, the National Assembly had included a clause in the 2016 Appropriation Bill stating that it would, last for a year from the date it received presidential assent. Thus as the President signed the bill into law on the 6th May 2016, its life span expired on the 5th May 2017.

EFFECT OF DELAY

This delay is one that is bund to have grave consequences for the economy. Writing on the subject, Chris Emotoh reported the views of the President of the Nigerian Economic Society, Prof. Ben Aigbokhan as follows:

“Prof. Aigbokhan explained that when there is a delay in signing of the budget, it affects economic growth and many jobs would be lose, thereby saturating the labour market and endangering the economy. According to him, when budget is delayed, the implication is that government may not be able to spend or execute 40 percent of the capital expenditure. The economist declared that with the delay in signing the budget, the possibility of Nigeria exiting recession in Q3 is near zero.

He added that government had projected that by third quarter of 2017, the economy would come out of recession; but this, according to the Professor of Economics, may not be realised”meaning the recession may take longer time.” He noted that, “there would be low aggregate of income as government borrows to pay salary; and it may not be able to spend 50 percent of capital budget of 2017. This, according to Prof. Aigbokhan, will make the implementation of the zero budget unrealistic. Another negative effect of delay budget is that it discourages foreign investors from coming in to invest and that could make them to divert their investment capital to other countries.”

Given the above, one cannot but wonder why there is annually a delay in the process of passing the budget. In 2000, the budget for that year was not signed until May 6 although it was presented in December 1999. The table below gives the dates the Budgets since 2008 were signed into law.

S/N    Year of Budget  Passed into law

1        2008     April 15, 2018

2        2009     March 10, 2009

3        2010     April 22, 2010

4        2011     May 27, 2011

5        2012     April 13, 2012

6        2013     February 26, 2013

7        2014     May 24, 2014

8        2015     May 19, 2015

9        2016     May 6, 2016

PROCESS SHOULD BE SEAMLESS

Ideally, the process of the passage of the budget should be seamless as stated by the Central Bank in one of its publications as follows:

“In Nigeria the fiscal year begins on January 1st and ends December 31st. There is, however, no time limit for the National Assembly to consider and approve the budget set before it, although, there is a time limit for the President. This process starts in June with the issuance of a Call Circular from the FMOF to MDAs to submit their expenditure proposals, which are set within the spending limits. A draft Bill is prepared by October by the FMOF and sent to the NASS through the Presidency. Technically, before the legislature’s December recess, the Bill could be passed with any agreed amendments. The President could then be able to authorize the Bill to become law in January. A clause also allows the President to spend from the previous year’s budget, which has to be within the time limit of six months, although there has to be an awaiting appropriation act for the current fiscal year.”

To prevent the unsavoury effects of the constant late passage of the Budget, Nigeria may borrow a leaf from other countries who have evolved efficient ways of passing their budgets. In a publication titled Legislaturesand the budget processpublished by the National Democratic Institute for International Affairs an example was given of the situation in Chile as follows:

“The Chilean constitution mandates that the executive provide the legislature its budget 60 days before the end of the fiscal year. While this time- frame is comparable with a number of countries, the consequences of Chilean legislative inaction are especially significant. If the legislature does not approve the budget within 60 days, it automatically becomes law in its entirety, thus under- cutting the leverage of the parliament.”

I have no doubt that the same can be replicated here in Nigeria as one constant complaint of the national assembly is that the executive is often late in submitting the appropriation bill for its consideration. In addition to this there must be added cooperation between the legislature and the executive in the overall process.

The current situation has not been helped by argument on both sides as to the extent to which the legislature can tinker with the bill sent to it by the executive. Such unnecessary issues only to serve to bring about further delay and as current events show are not in the best interest of the citizenry.

The post Recurring delay in passage of Budget: Matters arising appeared first on Vanguard News.

Source: http://www.vanguardngr.com/

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