‘The 2022 Budget will be the last full year budget to be implemented by this administration. We designed it to build on the achievements of previous budgets and to deliver on our goals and aspirations as will be reflected in our soon-to-be launched National Development Plan of 2021 to 2025’. – President Muhammadu Buhari, 2022 Budget Speech.
The Federal Government 2022 budget proposal was presented by President Muhammadu Buhari to the joint session of the National Assembly on October 7, 2021. Labelled the Budget of Economic Growth and Sustainability, the appropriation bill has a revenue projection of N10.13 trillion and planned expenditure of N16.39 trillion, resulting in a deficit of N6.26 trillion which is to be financed mainly from new borrowings.
The objective of this write-up is to stimulate discussions on whether there is indeed a linkage between the proposed 2022 budget and the goals and aspirations of the development plan that President Muhammadu Buhari made reference to. Specifically, the President mentioned the soon-to-be launched National Development Plan 2021-2025, a medium-term plan that is the successor to the Economic Recovery and Growth Plan (ERGP) 2017 – 2020.
Revisiting the conversation on the plan-budget nexus is important at this point given the context in which the 2022 budget was prepared. In the FGN 2022 Budget Call Circular issued by the Ministry of Finance, Budget and National Planning (MFBNP) on August 19, 2021, the Ministries, Departments and Agencies (MDAs) were instructed to link their capital projects to the Medium Term National Development Plan (MTNDP) 2021-2025 core objectives. This means that the 2022 budget is the short-term instrument for achieving the goals of the MTNDP 2021-2025. The main objectives of the plan are as follows: (a) Establishing a strong foundation for a diversified economy; (b) Investing in critical physical, financial, digital and innovative infrastructure; (c) Building a solid framework and enhancing capacities to strengthen security and ensure good governance; and (d) Enabling a vibrant, educated and healthy populace.
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Prior to developing the MTNDP 2021-2025, the hitherto medium-term plan was the ERGP 2017-2020, which had the following key objectives: (a) Restoring economic growth by ensuring macroeconomic stability and economic diversification; (b) Investing in the people through social inclusion, job creation and human capital development; and (c) Creating a competitive economy by building infrastructure, improve the business environment and promoting digital-led growth.
The 2022 budget, and indeed the previous 2021 budget, may not facilitate the achievements of the goals and aspirations of the MTNDP 2021-2025
To achieve the ERGP objectives, the government implemented expansionary budgets, which among other achievements, led to the exit from economic recession entered into in 2015.
The opinion herein however is that the 2022 budget, and indeed the previous 2021 budget, may not facilitate the achievements of the goals and aspirations of the MTNDP 2021-2025. This notion is based on the fact that these budgets were prepared using the ERGP codes for MDAs capital projects. In other words, the MDAs linked their capital projects in both the 2021 and 2022 budgets to the objectives of the defunct ERGP 2017-2020, instead of the goals of the MTNDP2021-2025. What this means essentially is that the 2021 and 2022 budgets were not linked or were de-linked from the objectives of the MTNDP 2021-2025. This calls to question the efficacy of the plan-budget nexus and also defeats the aim of merging the Ministry of Budget and National Planning with the Ministry of Finance, to have the Ministry of Finance, Budget and National Planning.
Another implication of linking MDAs capital projects in the 2021 and 2022 budgets to the ERGP objectives is that evaluating the performance of the MTNDP 2021-2025 upon its expiration will be technically challenging. This is because the first two years of the implementation is already knocked-off with the 2021 and 2022 budgets connected to the ERGP. It thus means that any assessment of the MTNDP will be between 2023 and 2025, and this is based on the assumption that the subsequent budgets in the plan period will not be linked to the already expired ERGP.
Overall, this piece argues that the MTNDP 2021-2025 may already be failing even before being launched. The2021 and 2022 budgets, which are supposed to be the execution plans in the first two years, were de-linked from it. The MFBNP needs to develop the codes that MDAs will use to link their projects to the objectives of the MTNDP 2021-2025 starting with the 2023 budget.
Ekor, (PhD) 09068833710, [email protected]
