Implementing 2015 budget

Just before the House Representatives adjourned for its usual annual recess news filtered out that the House had raised issues with regard to the extent of implementation of Budget 2015 and in furtherance to its interest in ensuring that the Budget was implemented the House proceeded to constitute an ad hoc Committee to investigate this matter. The Committee was also mandated to examine the extent to which the Ministry of Finance had discharged its mandate as contained in the 2015 Appropriation Act and Sections 30(1) and 30(2) of the Fiscal Responsibility Act in this respect. The Committee voiced its concern regarding its worry that it would appear that President Buhari’s administration had abandoned the implementation of the Capital Budget component mid-way in the year consistent with the experience in the recent past whereby the Budget suffered from inadequate implementation. As should be expected all this concern is not altruistic as the House members are particularly worried about the constituency component of the Budget whose non implementation would rub off badly on the relationship with their constituents who might accuse them of not making any meaningful contribution to their welfare.

The President following the briefing made to him by the National Planning Commission advised the Commission to work to reduce the recurrent component of the Budget 2015 as if the recurrent component of the Budget could be simply turned on and off like a tap and of course one empathized with the Commission because the membership is certainly not in a position to give a suitable and appropriate response. It is not the President alone that comes with this mindset. Even members of the organized private sector also often lament and bemoan the fact that the Capital component of the Budget is marginalized which as we all know is not conducive to the rapid growth and development prospects of the National economy. If we have a full appreciation of what constitutes recurrent expenditure in the Budget we would understand that it is not realistic to expect that you can suddenly wake up, use a magic wand and expect the recurrent Budget to come tumbling down. The recurrent budget includes wages, salaries and sundry overheads and except we are prepared to shut down operations, sack everyone we most certainly do not have a chance of expecting that this component of the budget will be reduced overnight.The reduction of the recurrent component of the budget can only be achieved by a focused determined attempt as we were beginning to witness under the immediate past administration through plugging of loopholes and leakages for instance the elimination of the ghost worker syndrome which was already being positively impacted through the intelligent use of technology; biometrics etc. and probably through the implementation of the rationalization agenda ala Oronsaye’s report. But it would appear that this is the wrong time to attempt to implement this report except that we could do so with a mind of avoiding as much as possible the incidences of staff layoffs as we observed in an earlier article that it is time to deliberately adopt supply side economics to boost productivity in the economy and get more hands back to work. It is also a win-win situation if we could increase the budget size through tapping into other revenue channels while keeping the recurrent budget in check.

President Buhari would be expected to send a supplementary budget to the National Assembly as soon as he empanels his team ready to run. I recall in one of my many interventions on the budget that I had argued that Budget 2015 being introduced in an election year was going to be particularly a problematic child and commended the presence of mind as well as the patriotic zeal of the immediate past National Assembly for the extent of work it did on the budget up to seeing to its approval in spite of the prevailing unconducive scenario and the fact that it was singing its swan song. Even if former President Jonathan won the election there is no way he could continue with the implementation of the Budget as approved after the election and his constituting the new Executive. Therefore it is rather unrealistic for anybody to be talking of implementing Budget 2015 at this period in the Budget year. We have barely four months to the end of the fiscal year and the Fiscal Responsibility Act is quite explicit in its recommendation that the draft budget should be ready for consideration and appropriation by the members of the national Assembly four months to the commencement of the Budget year if we are to have a chance of commencing the implementation of the budget starting from the first day of the new year. It should not by any stretch of the imagination be construed that we are recommending that the House should terminate its enquiry except that we would wish to caution that it aligns its expectation of the outcome of its investigations accordingly with the view expressed herein. It is quite possible that some of the insights arising from such work would inform activities in this connection as we all join hands with the President as he endeavors to reposition this country for the realization of its potential which has been unconscionable delayed.

The successful adoption of the national budget as a blue print to drive rapid growth and development of the national economy had been hamstrung from various perspectives partly structural and partly procedural and tactical and it is opportune in the context of the change agenda that this opportunity must be ceased to adopt the correct template in this regard. The budget is an annual plan and it is erroneous to have the Budget Office report to the Minister of Finance. That is an anachronistic arrangement; a throwback which envisaged the budget is a revenue and expenditure platform. As we prepare the Medium Term Expenditure Framework (MTEF) which to all intents and purposes is a three year rolling plan; its implementation can only be effected through the budget. In fact quite often the first year of the MTEF should be coterminous with the budget following its approval.And therefore it makes little sense to have the Budget office report to any other authority than the Planning Ministry. It is therefore little wonder that we have not been known for our prowess with good budget implementation. The MDAs would have responsibility for the articulation of their respective budget using guidelines provided by the Budget Office and part of the problem as I heard the Planning Commission lament is the  lack of capacity at the respective ministries and this is a major handicap as the saying goes it is not possible to make omelet without breaking eggs!

There are issues relating to the actual approach to preparing the budget as we adopt an incremental mindset in this regard. Sometimes in some respect it is inevitable not to adopt an incremental approach particularly with regard to recurrent expenditure. But otherwise we must always get down to brass tacks to ascertain actual figures to use in the budget. And as we have heard there is an aspect of lobbying in determining the actual amount of budget allocated to which budget head which ab initio creates the ideal environment for rent seeking behavior. One expects that this will no longer be an issue in the prevailing environment of zero tolerance for corruption. Then when the Budget is sent to the National Assembly it comes back mutilated that sometimes the budget sent in is barely recognizable and it begs the question who in the first place has responsibility for the National Budget! This matter has gotten so bad that it is on record that I had recommended judicial intervention for this matter to be settled once and for all. That eminent jurist and renowned Constitutional lawyer; Professor Benjamin Nwabueze had recommended in the past that the National Assembly could reduce the budget size but not increase it which resonates with common sense as it is patently easier to manage surplus. The Executive must rise to the challenge of working to readjust the structure of the budget vis-a –vis augmenting the capital component of the budget and to ensure that the budget details are ready in good time for the consideration of the National Assembly and making focused and concerted efforts to upgrade implementation commencing from the first day of the calendar year but in any case not very much later. The Executive must adopt a mindset in every respect that sees the budget as a veritable blue print for facilitating the rapid growth and development of the National Economy.

 

Boniface Chizea