Key stakeholders in the Nigerian business community have raised concerns over persistent delay in 2014 budget passage, insisting that the trend does not bode well for investors and the economy, especially in a pre- election year when several uncertainties are anticipated.
Budget is an estimate of a country’s revenue and expenditure within a financial year.
It allocates monetary resources to all sectors and creates certainty and direction for the economy, according to analysts.
Nigeria’s N4.6 trillion 2014 budget contains recurrent expenditure of 74 percent and capital expenditure of 26 percent.
But mid into the second month of the year, it is yet to be passed by the National Assembly, mainly because of increase in the number of the opposition party, the All Progressives Congress(APC), especially in the House of Representatives.
“Late passage dislocates proper planning for business operators whose business plans are often directly dependent on policies and provisions of annual budgets,’’ said Mohammed Badaru Abubakar, president, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture(NACCIMA), in a document made available to BusinessDay.
“Eventually, our capital budget does not achieve 60 per cent implementation due to late passage.
We have repeatedly drawn the attention of all three tiers of government on the need for the extant practice of timely crafting, presentation, debate, passage and signing of their annual budgets,’’ he added.
The practice of passing budgets months into the year often has multiplier effects on the economy, as it brings about other risks that have direct and indirect consequences on the economy, say stakeholders. For example, the situation delays the country’s quest for reduction of unemployment which is currently 24 percent and deters investors from launching into the economy, they add.
‘’Such delay has a number of consequences for the economy. Escalation of uncertainty in the economy, delays in delivery of infrastructure projects which has profound impact on productivity in the economy, delays in payment of contractors of government projects, risk to contractual agreements on various government projects,’’ said Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry(LCCI) in a statement released by LCCI on Monday.
‘’Council accordingly called on the National Assembly to accelerate the consideration of the 2014 budget, without compromising the quality of its deliberations and scrutiny of the budget,’’ he added.
Analysts say Nigeria has particularly failed in the budgeting process as the country fails in the area of budget control which is the hallmark in other climes. They say the country must wake up to budget control measures, if it would join the league of strongest economies.
‘’Serious countries are often serious about budgets. But ours is neither here nor there. We have what is called call circular where you call ministries, departments and agencies to submit their budgets but it still one’s imagination why the delay perists. The situation calls for the legislature and the executive to sit down together, even though budgets are often not taken seriously in developing countries,’’ said Benjamin Osisioma, professor of accountancy at Nnamdi Azikiwe University Awka and secretary of the Executive Committee of Association of National Accountants of Nigeria.
‘’We must begin to modify our budget processing if we wish to see the effects. We must advance to having control over budget rather just mere budgeting,’’ he added.
By: ODINAKA ANUDU