Yesterday, President Muhammadu Buhari presented the 2020 budget tagged “Budget of Sustaining Growth and Job Creation”. The trust of the budget,according to the president, was for “fiscal consolidation, to strengthen the macroeconomic environment, incentivising private sector investment essential to complement the government’s development plans, policies and programmes, and enhancing our social investment programs to further deepen their impact on those marginalised and most vulnerable Nigerians”.
In the estimate, presented at a joint-session of the National Assembly, a total sum of N8.155 trillion is estimated as the total federal government revenue in 2020, comprising of oil revenue of N2.64 trillion, non-oil tax revenues of N1.81 trillion and other revenues of N3.7 trillion. This, according to the president, is seven percent higher than the 2019 comparative estimate ofN7.594 trillion, inclusive of the government-owned enterprises.
The estimate also comprises of an aggregate expenditure of N10.33trillion for the federal government, made up of statutory transfers of N556.7 billion,non-debt recurrent expenditure of N4.88 trillion and N2.14 trillion of capital expenditure (excluding the capital component of statutory transfers). Similarly,debt service is estimated at N2.45 trillion, and provision for Sinking Fund to retire maturing bonds issued to local contractors is put at N296 billion.
The estimate is further predicated on the 2020-2022 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) already before the National Assembly. Buhari while addressing the joint-session said that “we adopted a conservative oil price benchmark of US$57 per barrel, daily oil production estimate of 2.18 mbpd and an exchange rate of N305 per US Dollar for 2020.
He also said the 2020 budget estimate is geared towards enhanced real GDP growth of 2.93%, “driven largely by non-oil output, as economic diversification accelerates, and the enabling business environment improves”.However, he noted that “inflation is expected to remain slightly above singledig its in 2020”.
And for the first time, the budget estimate was accompanied by a Finance Bill, which the president noted has “five strategic objectives, in terms of achieving incremental, but necessary changes to our fiscal laws”. According to him, the Bill is geared towards “promoting fiscal equity by mitigating instances of regressive taxation; reforming domestic tax laws to align with global best practices; introducing tax incentives for investments in infrastructure and capital markets; supporting Micro, Small and Medium-sized businesses in line with our Ease of Doing Business Reforms”, among other goals.
Insisting that the Appropriation Bill was predicated on proposes an increase of VAT rate from 5% to 7.5%, President Buhari, said that the additional revenues will be used to fund health, education and infrastructure programmes.
The President also said that the 2019 ‘Budget of Continuity’ was based on a benchmark oil price of US$60 per barrel, oil production of 2.3 mbpd,and an exchange rate of N305 to the United States Dollar. He noted that with aggregate revenue of N2.04 trillion as at June 2019, “the revenue performance was only 58 percent of the 2019 Budget’s target due to the under performance of both oil and non-oil revenue sources”. He also said that receipts from Value Added Tax were below expectations due to lower levels of activities in certain economic sectors, in the aftermath of national elections.
On the expenditure side, he said the 2019 Budget implementation was equally hindered by a combination of delay in its approval, as well as the under performance of revenue collections. As such, “of the prorated expenditure of N4.46 trillion budgeted, N3.39 trillion had been spent by June 30, 2019,” he said.
Those said, the question remains: Are we to expect any change in the fiscal management of the public revenue or are still mired in the yearly ritual, dubbed annual budget? The reasons for asking these questions have remained very important, especially given that after 59 years of independence,Nigerians never got beyond this annual ritual. It has been observed that obligations contained in annual budgets are usually implemented the way it suited those in the executive arm of government. It is not just that the executive pick-and-chose what to implement and what not to implement, no effort is put in place to ensure that projects left behind the previous year are carried over and made a priority in subsequent years, before new items are introduced. This is partly why there is lopsided implementation of budgets to suit the whims and fancies of those charged with the implementation.
This is why Nigerians have been wondering why the National Assembly even waste their time debating budgets, instead of just rubber-stamping and sending the documents back to the executive same way they were brought in.if one recalls all the hullabaloo at the National Assembly over purported padding or no padding of budgets, one would think there was something so sacrosanct with those budgets that raised so much dust. Unfortunately, after all the noise that even threatened the seat of then Senate President and his deputy, nothing usual followed as greater proportion of those budgets were never implemented.
Several Non-Governmental Organisations have in recent past discovered that items listed in the budgets were mere repetitions, with little or no relevance, considering the presumed seriousness with which such budgets were presented, debated and passed. The NGOs and the media had discovered that budgetary items are merely regurgitated and represented, with slight modification to the financial attachments thereto. It is also true that after the media had brought such recurring anomaly to the public domain, the political actors have always turned the boat and blamed the media or other often recycled circumstances for their failure to achieve appreciable success in each successive year. No wonder the Enugu-Onitsha; Enugu-Port Harcourt; 9thMile-Makurdi; Abuja-Benin; Onitsha-Owerri-Aba; East-West Road;Uyo-Ikot-Ekpene-Calabar-Makurdi; Abuja-Kano; Zaria-Gusau-Sokoto; Lagos-Ibadan;Benin-Ore; Kaduna-Ilorin; Aba-Calabar; Ore-Akure-Lokoja;Makurdi-Jos-Bauchi-Maiduguri road and several other federal highways have remained recurring decimal in budget breakdowns. So also, the Lagos-Ibadan-Kaduna-Kano;Port Harcourt-Enugu-Makurdi-Jos-Maiduguri railway lines, have also reappeared in national budgets with nothing tangible except government propaganda and lies attached to those roads at the end of each year.
These being the case, it has therefore become necessary for our leaders to carry out thoroughly introspect whether we really need to engage in this annual ritual or not. We must understand that Appropriation Laws are sacrosanct and its breach remains impeachable and constitutes serious criminal act. We must begin accord this law the seriousness it deserves and treat any breach with the weight it deserves. We must also ensure that those items in any budget not implemented must be accorded priority in next year’s implementation since it remains a law, breach of which remains a criminal offence. Except we do these, The AUTHORITY believes there is no need wasting our precious time and energy talking or discussing budgets. It is either we take it, leave it, or tag along with dictatorial tendencies,which is where we are, budget or no budget.