Business
‘Budget Cycle Inconsistency, Hindering Economic Dev’
Over the years, the nation’s budget cycle has been inconsistent without a definite pattern, giving room for speculations and poor implementation.
According to data obtained from the Fiscal Responsibility Commission (FRC) 2016 Annual Report and Audited Accounts, from 2011 to 2017, the time of approvals of the budgets is well into the New Year.
The earliest was that of 2013 which was submitted to the National Assembly on Oct. 10, 2012 and assented to by President Goodluck Jonathan on Feb. 26, 2013, indicating a five month time lag.
All others were presented to the National Assembly in December and assented to in April, May or June.
In seperate interviews with the News Agency of Nigeria (NAN), experts said that the inconsistency does not bode well for the economy.
The Head of Research, BudgIT, Mr Atiku Samuel, said the economy depends on fiscal, monetary and trade policies to power it.
“Monetary authorities look closely at the budget for direction and that is why the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), was reluctant at its first meeting in 2018 to take action.
“Trade policy formulators sometimes bury decisions inside the budget.
“As such, the budget is an important planning tool within any functional economy”, he said.
He added that inconsistency in the budget cycle meant that both monetary and trade policy formulators could not act or take informed actions at the appropriate time.
“That typically cascades across the economy, making decisions irrational and sometimes irrelevant.
“The organised private sector also suffers. For instance, government spending accounts for about 50 per cent of construction related spending.
“If the budget is not presented and passed at the right time, an inconsistent pattern follows as we have in Nigeria and players in that sector will also have to restructure.
“They cannot recruit in anticipation of an increase in spending and that inevitably kills jobs.
“Some even sack workers because revenue is inconsistent, as we have seen in the construction sector.”
Samuel said that inconsistency in the budget cycle also renders fiscal stimulus ineffective and makes the pattern of spending difficult to trace and follow through.
He added that no investor likes volatility because it creates huge unmanageable risks.
Lead Director, Centre for Social Justice (CSJ), Mr Eze Onyekpere, a Civil Society Organisation (CSO), said the fact that the nation no longer had a fixed budget calendar had introduced inconsistency and uncertainty into the economy.
He said this trend had influenced poor economic performance in terms of Gross Domestic Product (GDP), growth and ability to meet sectoral objectives.
“This has also led to haphazard budgetary and economic policy implementation. Capital budget implementation has suffered under this budgeting scenario.”
He, however, said that the executive and legislative arms of government had specific roles to play in rectifying and addressing the budget calendar and implementation challenge.
“First, the executive have to start the budget preparation process early through the Medium Term Expenditure Framework (MTEF).
“The MTEF should be ready for the endorsement of the Federal Executive Council (FEC), on or before the end of the second quarter (June).
“It should be submitted to the legislature which should vet and approve of same before proceeding on their legislative break in July.
“Thereafter, the executive budget should be ready by the first week of September and submitted to the National Assembly which will then have four months to approve same before the end of the year.”
According to Onyekpere, there should be a commitment on the part of the legislature to approve the budget before proceeding on Christmas and New Year vacation.
This, he said, would enable implementation begin on Jan. 1 of the New Year.
The Acting Chairman FRC, Mr Victor Muruako, also said the trend reduces predictability and affects planning even within the Ministries, Departments, and Agencies (MDAs), and with those doing business.
“It is also not very encouraging to investors because government being the highest spender, it is good that there should be a level of predictability”, he said.
Muruako, however, said that though the inconsistency was not a good precedent, the commission was working closely with other MDAs, particularly the Ministry of Budget and National Planning, Budget Office of the Federation and Ministry of Finance to improve on it.
This, he said was to ensure stricter compliance with timelines so that the right thing would be done at the right time.
“It is an evolving thing and we are not there yet but I believe that with the level of commitment of the Federal Government, particularly the financial team, I see a silver lining in the horizon and we will definitely get there.
“We are hoping that we will soon see a January to December financial year, but there is need to improve the relationship between the executive and legislative arms of government, because that is another thing that affects it.”
He recalled that the budget was submitted to the National Assembly in the first week of November 2017, but was only passed by the legislature in May, adding that the legislature had a greater role to play.
Muruako said there was the need for better relationship between the executive and legislature so that there would be synergy.
He also said that if the legislative arm was involved from the point of formation or articulation of the estimates, there would not be need for too much scrutiny.
“The theory of separation of powers is there, but they are supposed to work as one.
“Anytime they are not working together, it is evident and this is affecting the nation, but I believe that democracy is still evolving here and we will get there soon,” he said.
The FRC report also said that a strict budget timetable should be incorporated into the Fiscal Responsibility Act (FRA), 2007.
It said that through that, relevant agencies would be committed to specific tasks, timelines and deadlines, which if enforced would help solve the perennial problem of late preparation and passage.
NAN reports that the 2018 Appropriation Bill of N8.61 trillion proposed by President Muhammadu Buhari, was presented to the National Assembly in November 2017.
It was, however, raised to N9.12 trillion and passed by the National Assembly on May 16.
Folarin writes for News Agency of Nigeria.
Folasade Folarin
The Nigerian Communications Satellite Limited (NIGCOMSAT), the country’s satellite operator, has called for immediate promolgation of policy action that will enable the country to harness the potentials of Artificial Intelligence (AI).
NIGCOMSAT, also warned that Nigeria risks missing out on Africa’s projected $1.2trillion share of the global AI economy by 2030.
Managing Director of NIGCOMSAT, Nkechi Egerton-Idehen, disclosed this in a statement issued at the weekend following her participation in the Meeting of the National Council for Communications, Innovation, and Digital Economy.
“Artificial intelligence is reshaping industries, economies, and societies worldwide, with projections that it will contribute up to $15.7trillion to the global economy by 2030. Africa stands to gain $1.2trillion of this if the right policies and innovations are in place”, Idehen said, citing a PricewaterhouseCoopers report.
The NIGCOMSAT MD underscored the transformative potential of AI in agriculture, highlighting its applicability in Benue State, widely regarded as Nigeria’s “food basket.”
According to her, machine learning tools could revolutionize agricultural practices by improving pest detection and optimizing planting schedules using satellite imagery.
“AI offers us the chance to not only flourish economically but also to achieve food security. However, we must ask ourselves if we are prepared to manage this technology responsibly”, she added.
Idehen also noted that internet access remains a significant barrier to AI adoption in Nigeria.
“For AI tools to be effective, basic digital infrastructure is essential. Addressing this gap must be a priority.
“AI is happening. We have the opportunity to manage this technology revolution responsibly, both in Africa and globally, through innovation and governance”, she said.
In August 2024, the Federal Ministry of Communications, Innovation, and Digital Economy released a draft National Artificial Intelligence Strategy, aiming to position Nigeria as a global leader in AI.
Corlins Walter
The Chairman of Emohua Local Government Council, Chief David Omereji, has said the council has so far spent over N1 billion for the electrification of communities in the area.
Omereji said this while addressing staff of the council at the council headquarters recently.
He said the move was part of his administration’s resolve to ensure peace and development of the LGA.
According to him, the Council spent about N29 million on monthly basis for the maintenance of the Emohua Local Vigilante group known as OSPAC, with each member being paid a stipend of N100, 000 monthly.
He diaclosed that 11 out of the 14 wards are currently enjoying electricity, while efforts are on to light-up the remaining ones.
“I also want to use this opportunity to inform the political class for purposes of records and for the understanding of the people that the Council under my watch have done more than enough”, he said .
The Emolga boss explained that all that have been achieved were through the personal effort of the Council, without support from anybody as rumoured in some quarters.
Omereji further reaveled that a number of other projects, including roads, fencing of schools, hospitals, courts premises, and reconstruction of some abandoned buildings at the Council Headquarters are being undertaken by his administration.
He enjoined the people of the area to support his administration’s drive to bring purposeful development to the LGA.
The Emohua Council boss, who reiterated his hatred for noise making, stated that his works would speak for him, and solicited the support of staff of the council and the entire people of the area.
He noted the fact that some people may not be happy with his achievements, saying that he would remain focused, while advising critics of his government to do so constructively with facts and figures.
King Onunwor
The Movement for the Survival of the Ogoni People (MOSOP) has raised some ethical questions over a Financial and Technical Services Agreement (FTSA) between Sahara Energy and West African Gas Limited (WAGL), an affiliate of the Nigerian National Petroleum Company (NNPC).
MOSOP said the agreement was not done in good faith, not in the interest of the Nigerian people, and did not follow due process.
Foremost Ogoni born activist and MOSOP leader, Fegalo Nsuke, who made this known in Abuja, weekend, described the Sahara-WAGL deal as fraudulent, deceptive and an insult on the intelligence and integrity of the Nigerian nation.
Nsuke called on President Bola Ahmed Tinubu to cancel that FTSA between Sahara Energy and WAGL, noting that the agreement is fraught with irregularities and deceptive.
“What Sahara and the NNPC did in the FTSA between Sahara and WAGL is shameful and depicts high level corruption in public service of our country.
“WAGL is an affiliate of Sahara and the NNPC. How then can Sahara go into an agreement with its own affiliate? It’s as good as going into an agreement with itself. This is deceptive and fraudulent”, Nsuke said.
He continued that “Sahara Energy is certainly not a company the Ogoni people want on their soil and we are calling on Mr. President, Bola Ahmed Tinubu, to terminate any deal between the NNPC and Sahara Energy over OML 11, and to allow for an inclusive arrangement that considers a fair treatment of the Ogoni people in the distribution of revenues from natural resource extraction on Ogoni soil.
“The last Ogoni Congress has been unequivocal on the Ogoni demand for justice and has given a clear path to resolve the three decade old conflict between all critical parties.
“It will be good to explore this path to peace and development for Ogoni and for our country”.
Nsuke accused Sahara Energy and the NNPC of frustrating the progress made by MOSOP to achieve a permanent solution to the Ogoni problem.
He urged a presidential intervention with deep consideration for a fair treatment of the Ogoni people in order to permanently address the problem.
He noted that Sahara Energy should give up on the Ogoni area to allow for an engagement in the interest of the country and the people.
Recall that MOSOP and Sagara Energy have recently been engaged in a row in what MOSOP describes as an unholy relationship between Sahara Energy and the NNPC over OML 11.
MOSOP expressly rejected Sahara Energy and called for a fair treatment of the Ogoni people in natural resource extraction in Ogoni.
It noted that Ogoni people, led by MOSOP, paid the sacrifice to take the oil from Shell, hence “the position of MOSOP must be taken into consideration in decisions relating to resumption of oil production in Ogoni”.