Section 18 of Nigeria’s Fiscal Responsibility Act (FRA) 2007 states that the “President shall submit the Appropriation Bill to the National Assembly not later than September 30th of each year.” And Section 19 of the Act says “the National Assembly shall consider and pass the Bill within 90 days of receipt.”
So, as at today, Wednesday, November 13, 2024, submission of the 2025 Appropriation Bill by Mr. President to the National Assembly is already 44 days behind the FRA deadline.
This development gets curious because even the guides for the Budget, namely the Medium-Term Expenditure Framework (MTEF) and the Medium-Term Fiscal Framework (MTFF) are not known to have been submitted for Legislative review/approval. Their submission to the National Assembly is required under the FRA, Sections 14-16.
Normally, both documents (precursors to the Appropriation Bill) provide (a three-year) fiscal framework; outline revenue and expenditure projections and identify priority areas.
Today, barely 48 days to the end of 2024, all that comes from the Presidency regarding the 2025 budget is a loud silence. On their part, the Legislature merely wring their hands in frustration and forlorn hope; moving motions that turn out empty. For instance, the Federal House of Representatives on Wednesday, October 16, 2024, flayed the delay by the Executive arm in presenting the 2025 budget estimate to the National Assembly.
The House urged the executive to comply with Section 11(1) b of the FRA 2007, and submit to the National Assembly, the 2025 budget proposal without further delay. This resolution of the House followed the adoption of a motion of urgent national importance. Moving the motion, Mr. Clement Jumbo, expressed worries that “the Executive arm has failed to present the 2025 MTEF and Appropriation Bill for 2025 as stipulated by the FRA 2007.” He said that the FRA stipulated that the MTEF and Appropriation Bill are expected to be submitted to the National Assembly at least four months before the end of the financial year.
At the end their deliberations on this motion, the House unanimously adopted it and referred it to the committees on National Planning and Economic Development and Appropriations and Finance to ensure (Executive) compliance “within two weeks.” However, one month down the line, it is only speculations on the possibility of Mr. President presenting the 2025 Appropriation Bill in the first week of December 2024 that are rife in the public domain.
On their own part, the Senate has remained practically dumb. Chairman of the Senate Committee on Finance, Senator Mohammed Sani Musa a few days ago (in the second week of November) could only tell journalists that “The Executive should be able to answer that question, as I know they are doing their work.” He said: “they are working on the 2025 budget and will forward it to us once it is completed. The decision lies with the executive, not us at the National Assembly.”
And so, the 2025 Federal Budget remains a subject of prevarications, equivocations, and doublespeak. But traditionally, during the tenure of the Ninth National Assembly and under President Muhammadu Buhari, budget estimates for the upcoming fiscal year were usually presented in the first week of October, following the submission of the MTEF and Fiscal Strategy Paper (FSP) for thorough review/approval by the Legislature.
Under Buhari, these documents were typically received in September, allowing for necessary discussions with relevant revenue-generating agencies by the Finance Committees in both chambers of the National Assembly. All these conduce to robust debates and deliberations on the details of annual budget proposals; leading to the certainty of Presidential assent to the Budget before the dawn of a new fiscal year.
However, against this pattern, President Bola Ahmed Tinubu presented the 2024 budget estimate to the National Assembly on November 29, 2023. The proposed budget was N27.5 trillion. Everything was rushed to have the Appropriation Act in place. In the interim, President Tinubu requested the National Assembly to increase the 2024 budget by N6.2 trillion. After going through quick joggling and mutation, the National Assembly brought the budget size to N28.78 trillion; signed by Mr. President on January 1, 2024.
Owing to this rushed process of birthing the 2024 budget, its implementation has been mired in glitches, adjustments and avoidable delays. At a point, President Tinubu had to ‘recall’ a 2023 supplementary budget of President Buhari, and proposed his own—all leading to ‘three budgets’ in place at one time. Howbeit, there is every indication that the 2025 budget will face even a foggier path.
This is because the foundational steps to annual budget making are either not being taken, or could be jumbled or eventually sidetracked. If as of today, the basic framework or skeletons of the 2025 budget are not yet in place; or not yet approved as required by law—due process is definitely endangered.
Unfortunately, the ills of a delayed annual budget are far reaching; leading to a lot of uncertainty and distortions in the economy. Most households and businesses cannot effectively plan for the future as they wait for the budget that normally shows the direction of the economy in every year. This could lead to reduced economic growth, as vital projects and initiatives are put on hold awaiting funding approval.
Delayed annual budgets will surely lead to inefficient allocation of resources, as ad-hoc spending decisions are made without a comprehensive budget framework. This is true for the Government, businesses and households. The longer the delay in having the budget, the wider and deeper the impact of ‘unplanned’ ad-hoc fiscal outlays. This in turn gives room for poor accountability and transparency—as it becomes difficult to track government spending and ensure that funds are used effectively.
Also, there is the issue of inadequate absorptive capacity, as the country may not be able to spend so much money in such little time as the budget would eventually permit. This would obviously result in dislocations in Nigeria’s macro-economy. Besides, as proven by experience, much of the funds for capital projects are usually borrowed, and ‘irregular budgeting’ has the tendency to exacerbate debt servicing costs.
Over all, the subsisting void in the 2025 annual budgetary process (depicted by Government’s loud silence) unfortunately, signifies a relapse to the ‘dark ages’ of harmful budget delays. A bungled or botched budgetary process (as the Nigerian public perceives) foretells a stifling of economic growth and development. The delay portrays the Government as either bereft of initiatives or willfully lethargic and carelessly laidback. This is certainly ominous to the economy!
Okeke, a practising Economist, Business Strategist, Sustainability expert lives in Lekki, Lagos. He can be reached via: obioraokeke2000@yahoo.com or 08033075697. (SMS only).
In