2017 budget passage on hold as lawmakers go on Easter Break

Nigeria’s already delayed 2017 budget will see further drawbacks, as the National Assembly goes on a two-week Easter break with the said budget still pending.

The 2017 budget approval must also wait till the ten Senate standing committees, yet to submit their budget reports on Ministries, Departments and Agencies do so and that will be after the Easter break, which commences today.

The Federal Government has hinged the implementation of the National Economic Recovery and Growth Plan (NERGP) on the budget. Also, an early passage of the budget was expected to help drive the recovery of the Nigerian economy from its current recession.
The 2016 budget was passed five months into the year and now the 2017 budget is faced with a similar fate.

“I think we already set ourselves up for a late 2017 budget passage, once the 2016 budget was to run till May 2017, as all urgency to pass by December 31 2016 dissipated,” Zeal Akaraiwe, CEO of advisory firm, Graeme Black, said in emailed response to questions.

“Given what is contained in the proposed 2017 budget and the current dire state of the economy, other than the formality of passing a budget, there is not much in the budget to give the economy the required boost,” Akaraiwe added.

Gross Domestic Product sank to a 25-year low of -1.5 percent in 2016, as oil prices tumbled and militant attacks cut production by around 600,000 barrels a day, almost a third of total production in Africa’s second largest oil producer.

President Muhammadu Buhari seeks lawmakers’ approval of a N7.2 trillion budget for 2017 which is 20 percent more than the budgeted N6.06 trillion in 2016, as the country attempts to spend its way out of recession. The budget has a deficit of N2.3 trillion.

“The National Assembly does not inspire confidence that this year’s budget will be passed early,” Taiwo Oyedele, a partner and head of tax at consulting firm, Price Waterhouse Coopers (PWC) said in response to questions.

“The budget proposal was submitted by the President last December and it’s inexcusable that it is still being held back, even as the economy is yet to heal from last year’s budget passage delay,” Oyedele added. He spoke on phone.

Senate spokesman, Abdullahi Sabi warned last month, that the 2017 budget passage might be delayed, owing to the failure of government MDAs to appear for their budget defence.

Prior to the Easter break, which commences today, Danjuma Goje, chairman of the Senate Committee on Appropriation, said ten ministries were yet to meet their deadlines, meaning that the budget approval had to be postponed till they resume on April 25.

Bismarck Rewane, CEO of advisory firm, Financial Derivatives Company, says another passage delay “will hurt the economy.

“A lot of work has gone into ensuring there are no delays in passage this year, we can only hope it is passed early enough,” Rewane said in response to questions.

Lawmakers now target an April 27 deadline, after its March deadline turned untenable.

“Some of the factors likely to trigger a delay may be beyond the control of the Senate but one would expect that they at least show some urgency by working extra hours, rather than dashing off on a two-week recess,” a source familiar with the matter said.

“It is almost as if they are not in tune with the current economic malaise,” the source added.

Nigeria’s economy is widely tipped to exit recession in the first quarter, ahead of an official statement by the National Bureau of Statistics (NBS) on April 28.

Government officials released an economic blueprint, the “Economic Recovery and Growth Plan (ERGP),” outlining policies to be implemented to boost economic growth within four years.

To live up to expectation, the ERGP must overcome a familiar stumbling block; poor implementation.

In the past, government officials had never been found to lack the kind of ambition that measures up to the ERGP standard; rather, it was an inability to see through the implementation stage that often let them down.

The successful implementation of the ERGP is ever more crucial today, as it attempts to breathe life into an economy reeling from its worst slowdown in a quarter of a century.

Opeyemi Agbaje, CEO of Lagos-based RTC Advisory services, supports the principles and objectives of the plan expected to boost annual economic growth rate to 7 percent by 2020, but he is unsure if government can get implementation right this time.

“My major concern is about this government’s commitment to these principles and the likelihood or otherwise, of implementation,” Agbaje said in an emailed response to questions.

“So far I have not seen anything that leads me to think we would aggressively implement the ERGP.”

The ERGP, to span from 2017 to 2020, is hinged on making the economy more competitive by boosting oil production and revamping refineries, raising power generation and adopting cost-reflective tariffs, building food-processing zones, as well as investing in mines.

It also outlines plans to sell public assets and liberalise the foreign exchange market.

The plan is however likely to be held back by electioneering in 2018 and 2019, meaning the current administration has barely two years to swing into full action on the initiatives outlined in the ERGP document.

 

LOLADE AKINMURELE