Stakeholders are worried that the National Assembly is not in a hurry to pass this year’s Appropriation Bill – three months after it was presented to it by President Muhammadu Buhari. OKWY IROEGBU-CHIKEZIE and CHARLES OKONJI capture the concerns of manufacturers on the budget passage delay.
WHEN President Muhammadu Buhari presented a budget proposal of N8.612 trillion to the joint session of the National Assembly for the 2018 fiscal year on November 7, last year, hopes for an early passage were high.
But, three clear months after the presentation of the N8.612 trillion Budget 2018 proposals, Nigerians are still awaiting the nod from the Red and Green chambers for the President to sign it into law.
The Senate had raised the hope of an early passage when it disclosed that it would pass the Appropriation Bill on December 19. It went ahead to direct its Committee on Appropriation to ensure that the report on the budget was ready on the date.
It consequently adjourned plenary session to December 19, to enable other standing committees have enough time to engage the various ministries, departments, and agencies (MDAs) on budget defence having passed it for second reading.
Speaking on the passage of the second reading of the budget, Senate President Bukola Saraki, said: “We know that the timetable is very tight. We will be suspending plenary for us to be able to start the defense of this budget. Committee chairmen and members should please ensure that we keep to this timetable.”
Saraki warned ministers and heads of agencies and parastatals of government to cooperate with the National Assembly during the budget defence to enable the apex parliament pass the bill on target.
He said: “Let me respond with a general note of warning to all heads of MDAs to ensure that they strictly respect the letters of invitation and the timetable. This is not time for excuses for ministers or heads of parastatals to be travelling and not be able to attend their budget defense.
“We do not have the time. This is a very short timeframe, therefore, I expect all MDAs to be able to respect our invitation and be there on time so that the committees can wrap up and be able to present their reports by the time we come back on Tuesday, December 19.”
Dr. Saraki said the upper chamber would hold a public hearing on the budget estimates during defence session.
“There will be a public hearing on the budget. We are looking at Monday, the 11th of December; however, in the next few days, an announcement will be made,” the Senate President said.
With that assurance, many had expected an early passage for the budget implementation to start in earnest.
“I sincerely hope that the National Assembly will pass the 2018 appropriation in good time to allow for effective implementation”, Musiliu Obanikoro, a one-time senator and former Minister of Senate for Defence, told TORIREPUBLIC, recently.
He went on: “If the budget is not passed before the end of February, it will be a bit difficult to achieve much in terms of implementation before the year ends because of 2019 elections.
“Presently, there is the need to sustain and consolidate on massive investments in infrastructure and to continuously grow the post-recession economy, and the appropriation bill is crucial to achieving all these.”
However, spokesperson of the Senate, Aliyu Sabi Abdullahi (Niger State), explained the delay, saying that no date has been fixed for the passage of the budget.
Sabi blamed the delay on what he called the ‘lackadaisical attitude’ of heads of the Ministries, Departments and Agencies (MDAs) toward the ongoing budget defence.
He said: “The MDAs are still interacting with committees, many of them are not responding. They are not responding as it should be, thus they have slowed down the pace of work on the budget proposal.
“We can’t give time because the heads of MDAs are not responding.”
The delay has become worrisome not only to the Presidency, but to major stakeholders in the economy.
Speaking the mind of the executive, Boss Mustapha, who is the Secretary to the Government of the Federation (SGF), warned of the consequences of a delayed passage of the Appropriation Bill.
Raising the alarm, the SGF said the delay in the passage of the budget can affect its implementation, noting that it would also affect the delivery of the campaign promises of the President Muhammadu Buhari administration.
The Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, said the delay will further compound the uncertainties in the local economy.
In a chat with The Nation in Lagos, Yusuf noted that the continued delay in the passage of this year’s budget have thrown investors into confusion in taking business decisions.
He said: “When the budget is delayed, investors are not sure of the policies of the government, how it affects businesses, and its policy direction. Early passage of budget helps in guiding investors on some of the investment decisions made.
The serious implication of delay in budgetary passage is that it will affect the implementation of capital projects and it is not good for an economy that is just recovering from recession.
“Investment in infrastructure is a very big issue. Delay in passage of budget affects investment in infrastructure adversely, and this is not good for the growth of country’s economy.
“When budget is delayed, development of infrastructure would be put to halt, this means that investors would be discouraged in investing. It also leads to a drop in Foreign Direct Investment (FDI).
“The long delay in budgetary passage would further compound the problems of implementation. There is a need for all organs of government to put their heads together to ensure that the issues with the budget are resolved timely.”
President, Manufacturer’s Association of Nigeria (MAN), Dr. Frank Jacob, described the delay as regrettable, given the expectations that it was designed to address the massive infrastructural deficiency and gap in the country.
The MAN chief said: “We were optimistic that they were going to start off immediately with the implementation. Unfortunately, the politicians and their ways of handling issues are adding to the delay, and I don’t know what is going on.
“The appropriation has been in favour of the manufacturing sector and the private sector, because we have been clamoring for the development of infrastructure. We are hopeful that that it would soon be approved and the implementation will follow, because any further delay will make a mess of the whole thing.
“Railway and road construction can only be done during dry season, but the way it is now, it is not encouraging. Very soon the rainy season will set in and that will further hamper construction. All these will adversely affect the economy.
“It is obvious that an improvement in road infrastructure would enhance movement of goods and services within the regions that the projects are located. No doubt, these projects would ensure seamless haulage with minimal damages on transit; improve economic activities, access to market; access to education and healthcare facilities, while at the same time narrow the infrastructure gap in the economy.
“Based on the report of World Economic Forum (WEF) which affirmed that every dollar spent on any capital project such as road construction generates an economic return of 5-25 per cent; every Naira spent on provision of road infrastructure, may trigger at least five per cent economic growth.
He observed that despite the claim in some quarters that the economy has sailed out of recession, going by the figures realised by relevant authorities, the manufacturing sector is not yet out of recession considering developments in the manufacturing sector in the last three months.
Jacobs appealed to the National Assembly to pass the budget as soon as possible, noting that to do otherwise will spell doom for the economy.
He, however, commended the sector’s budget. He said the interest of manufacturers has been taken care of with the N46 billion proposed for the development of industrial parks and industrial clusters.
According to him, the development of these industrial parks as it is done in other climes will move the economy forward.
“If Nigeria can develop these industrial clusters and parks with the N46 billion, I believe that it will help the manufacturing sector and it will help grow the economy”, he added.
Besides, Jacobs said the dearth on infrastructure and lack of access to credit facilities were limiting the productivity of the Small Medium Enterprises (SMEs).
He argued that when these industrial parks are developed, SME’s would grow into big enterprises, thereby creating rooms for more players in the economy.
On power, Jacobs described as reasonable the appropriation in the budget for the sector, even as he noted that the allocation remained a far cry from what is required to take care of all the challenges in the power sector.
Commending some of the policies from the Ministry of Power, he stressed that, if implemented, such policies would revolutionalise the sector and help the manufacturers, who devote over 30 per cent of their cost to energy provision.
The electricity challenge, which he said, “is in dire strait”, cannot be solved overnight but with consistent budget provision and implementation.
His words: “My thinking is that the power situation in this country is in a very bad shape, and cannot be solved over night, but I think this budget made provisions enough to tackle it.
“We seem a bit confused because the appropriation has been in favour of development of infrastructure which we have been clamouring for. But, the way it is now with the budget delay, we are of the view that it will further compound the problems.
“We are skeptical that we are going to have a repeat of budget of 2017, which was approved almost at mid-year, which implies that the implementation cannot be more than 50 per cent, and with only 50 per cent of budget implementation, the budget won’t really make any impact on the economy or on the manufacturing sector”.
He added that MAN is still hoping that the previous year’s budget would be carried over into this year, and if that is done, it may translate to the full implementation of the budget.
Jacobs lamented that last year’s budget did not make any significant impact on the economy as its implementation started very late and not much was achieved.
He urged the lawmakers to go beyond passing Appropriation Bill, but keep a tab on its implementation to attain 100 per cent implementation without leaving out any fraction.
A player in the processing and packaging industry, Mr. Duro Kuteyi, urged the Federal Government on the need to pass the budget without further delay.
The Chief Executive Officer of Spectra Industries Limited warned that delaying the budget passage further will negatively rub off on manufacturers, and by extension, on the economy.
A teacher at the Nassarawa University, Uche Uwaleke pleaded with the government not to tinker with the budget size as a result of the rise in oil price while asking for its immediate passage.
The Assistant Professor of Finance argued: “What controls budget is conservatism and not otherwise, the economy is fragile and cannot sustain borrowing.
“We should not increase the budget because of the increase in oil price as we depend almost solely on oil. Any increase will reduce our fiscal deficit gap.”