FG’s delay in transmitting 2025 proposal threatens budget cycle

About seven weeks to the end of the 2024 fiscal year, the Federal Government has yet to transmit the 2025 proposed expenditure to the National Assembly, raising concern among experts as to Nigeria’s ability to maintain the January-December budget cycle.

Experts and some lawmakers argue that the delay could have significant implications for the country’s financial planning by either disrupting the budget cycle, while an attempt to fast-track the process could pave the way for ministries, departments, and agencies (MDAs) to exploit the situation to insert projects outside their mandates, ultimately leading to a waste of public resources.

BudgIT, a civil tech organisation disclosed that the National Assembly inserted 7,447 constituency projects worth N2.24 trillion in the 2024 budget. According to BudgIT, these projects have no national significance but are narrowed to personal interests.

Andrew Orlando, stakeholder manager at BudgIT, observed that the insertions were part of the reasons the 2024 budget performed poorly and did not have the necessary impact on the lives of the citizens. In his assessment, the 2024 budget’s effectiveness was limited, performing at only 30 percent in terms of impact, partly due to insufficient scrutiny.

Currently, the National Assembly is on recess and will resume on November 19, leaving the executive and legislature with about six weeks to scrutinise and pass the budget if they are to meet the January-December cycle.

While President Bola Tinubu has been commended for sticking to this cycle, he, however, presented the Medium-Term Expenditure Framework (MTEF), Fiscal Strategy Paper (FSP) and 2025 Budget Estimates late. For instance, the 2024 estimates were only submitted at the end of November last year.

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This practice violates Section 11(1)(b) of the Fiscal Responsibility Act, 2007 which stipulates that “The Federal Government must, not later than four months before the commencement of the next financial year, cause to be prepared and laid before the National Assembly an MTEF for the next three financial years.”

Last year, lawmakers complained that the 2024 budget was presented late which gave MDAs limited time to defend their estimates. Some lawmakers have again expressed their displeasure at the delayed presentation of annual budget proposals to the parliament, which leaves them little time for adequate review.

According to Billy Osawaru, representing Orhionmwon/Uhunmwode Federal Constituency, Edo State, the late arrival of annual budget proposals allows MDAs to short-change Nigerians.

Kingsley Chinda, the minority leader, also emphasised that unless budget estimates arrive on time, legislators would struggle to scrutinise the budget in the public interest.

“We were practically rushed into completing work on the 2023 budget just to meet up with the January – December cycle. By now, the MTEF should have been with us”, he said.

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Iniobong Usen, head, research and policy advisory at BudgIT Nigeria, said the MTEF ought to be sent to the National Assembly at least two months before the budget is issued, as it provides insights, a sense of direction into the government’s priorities for the coming fiscal year.

“It’s a major concern because global best practice recommends that the budget gets to the parliament at least two months before the end of the fiscal year. Anything short of that would be too late and would only allow a little time for the parliament to do justice to the budget”, he said.

Reflecting on the 2024 budget, Usen noted it had minimal impact despite the government’s claim of increased revenue. Tagged the “Budget of Renewed Hope,” the 2024 budget allocated N27.5 trillion, with non-debt recurrent spending set at N9.92 trillion, debt servicing at N8.25 trillion, and capital expenditure at N8.7 trillion.

However, in the first half of 2024, only N1.84 billion out of N9 trillion capital allocation had been utilised, with some MDAs still awaiting funds for capital projects, according to the Senate.