• Friday, June 21, 2024
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Analysts oppose Capital Expenditure Budget Roll-Over Bill

budget calculation

bill to authorise the roll-over of all unspent capital expenditure of  the Federal Government Ministries, Departments and Agencies (MDAs) from a budget period to the next financial year is currently before the Senate.

The Capital Expenditure Budget Roll-Over Bill ensures that whenever it is impossible for MDAs to utilise capital expenditure appropriations to them in the current year, such MDAs shall roll-over the balance of the appropriated capital expenditure to the next financial year, under the same capital expenditure item.

Ali Ndume, Senate Leader and sponsor of the bill, says the essence  is to ensure continuity and completion of all capital projects.

Hitherto, unspent capital funds in the budget year are returned to the treasury for fresh appropriation in the next budget.

However, while some analysts believe it ensures transparency and accountability, others are of the opinion that this has led to abandoned projects across the country, especially where such capital projects are not captured in the next budget period.

According to a report by the Abandoned Projects Audit Commission, set up by former President Goodluck Jonathan, an estimated 11,886 Federal Government projects were abandoned across the country in the past 40 years.

While Section 3(2) of the proposed law states that unutilised capital expenditure in the current year shall be rolled-over and added to the amount appropriated in the next year’s budget until the completion of the multi-year capital project, Subsection 3 proposes that this will be done until the completion of the capital expenditure item.

Speaking with BusinessDay, Jude Ohanele, Programme Director, Development Dynamics, kicked against the bill, saying it is in conflict with Section 1 of the Financial Year Act of 1980, which stipulates that Nigeria’s budget year shall run from January 1 till December 31.

Ohenele said if the bill is passed into law, it would promote ineptitude in both the executive and legislative arms of government in early submission and  scrutiny of the document. 

He therefore called for the budget to be submitted to the National Assembly, four months to the end of the year, in line with the Fiscal Responsibility Act, 2007.

The budget, he posited, should run for one fiscal year. 

“The bill is  going to provide a window for our legislators and people in the executive arm of government to be lousy on the need for timeliness around the budget. Because of what they are seeking to smuggle in, there is a situation where they can cover for their own ineptitude, which I think is not very healthy.

“If they want us to change our financial year from January 1st to 1st of April – as some countries do – that is a different game. But if our financial year starts on the 1st of January, it ends on the 31st of December. That way, it also creates better room for accountability and other issues connected to that, which includes the audit process. 

“We need to clearly define what our fiscal year is. But if our fiscal year is from 1st of January to 31st of December, what it means is that our budget should be ready before the 1st of January.

“If the executive arm of government can present the budget as early as August, between September and end of November, the National Assembly should be able to tidy up with the passage of the budget, so that it can receive presidential assent before the 1st of January. So, that bill will cover up for the recklessness and the very lousy thing they are doing with our budget. And I personally do not support it”, he submitted.

A budget historian, Adetunji Ogunyemi, called for the completion of budget scrutiny by October every year, to allow for signing of the document by January 1.

He said: “If a budget needs to be run, it has to be completed by October. There is no way the government would pass the budget by January 1, because the National Assembly needs at least 90 days to scrutinise it”.

Recall that President Muhammadu Buhari submitted the 2016 budget on December 22, 2015 and signed the document on May 6, 2016.

OWEDE AGBAJILEKE