…Say action will spur GDP growth
…Want execution of critical projects
…Late passage ‘ll affect full implementation’
Ahead of the passage of 2018 Appropriation Bill by the National Assembly, financial experts have said that although the federal lawmakers’ resolve to do the needful this week came seven months after President Muhammadu Buhari presented the N8.612 trillion budget before them, its passage will further help in reflating the economy as well as support the Gross Domestic Product (GDP) growth rate.
For his part MD/CEO, Cowry Asset Management Limited Lagos (Member of the Nigerian Stock Exchange), Mr. Johnson Chukwu, told The Daily Times in an interview that ‘‘this (passage of the budget) is expected to enhance job creation with the consequent positive impact on personal income, consumer demand and productivity’’.
Chukwu, also said that when the approval is granted, the Federal Government should be able to engage in more physical infrastructure development in the course of implementing the capital expenditure component of the budget.
Commenting on the late passage of the budget, he enunciated that the ‘‘delay until almost the end of the second quarter of 2018 implies that it will be near impossible to have a 100% implementation of the capital expenditure component of the budget’’.
Such failure, the financial expert noted, is ‘‘partly responsible for the dearth of supporting infrastructure in the economy’’, saying ‘‘until we begin to fully implement our development plans, which the budgets represent, we will not be able to close the huge infrastructure gap that is required to make our economy competitive’’.
‘‘The government is yet to achieve full budget implementation in the three years it has been in power. The challenge, Chukwu pointed out, ‘‘has always been the failure of the Executive and Legislature to harmonize the content of the budget and reduce the multiple frictions that have led to consistent delays in the budget approval’’.
Also reacting on the implications of late passage of the bill, Professor of Economics, Nasarawa State University, Joseph Uwaleke, said that the delay in the passage of the 2018 budget is slowing down the pace of economic recovery given that the execution of critical capital projects will have to wait until funds are duly appropriated.
Uwaleke said, ‘‘It is also contributing to uncertainties in the business environment with many investors both local and foreign choosing to stay on the sidelines till a clear economic direction is provided following the approval of the budget”.
According to him, this has impacted negatively especially on the stock market since February this year.
He noted that with a few months to the end of the year and the rainy season now at hand, coupled with the lengthy procurement process and possible distractions from heightened political activities, the execution of the capital component of the budget may not record significant success.
“Like the previous budgets which also suffered the same fate, the implementation of the 2018 budget will spill over to 2019”, the economist said.
Uwaleke also said that ‘‘with very high chances of meeting projected revenue against the backdrop of improvements in crude oil price and output as well as non oil tax revenue, all the critical capital projects provided for in the 2018 budget should be undertaken’’.
The Professor of Economics added that any uncompleted portion should be carried over to subsequent budget periods.
The Daily Times recalls that President Buhari had on November 7, 2017, presented the N8.612 trillion budget proposal to a joint session of the National Assembly with an expectation that it would be passed by the end of December and signed into law very early in January.
Buhari had met with Senate President Bukola Saraki and Speaker, House of Representatives, Yakubu Dogara and other principal officers of both chambers to lobby them with a view to ensuring timely passage of the 2018 Appropriation Bill.
Based on the outcome of the meeting, both chambers on December 5, 2017 had suspended plenary to accelerate the budgetary process of meeting with heads of ministries, departments and agencies (MDAs) of government for the defence of their respective budget estimates.
Saraki, had also directed the Joint Committee on Finance, Appropriation and National Planning to submit its report on the Appropriation Bill.
Chairman, House of Representatives Committee on Legislative Budget and Research, Hon. Timothy Golu, noted that late submission of Medium Term Expenditure Framework (MTEF) to the National Assembly and refusal by MDAs to comply with relevant laws guiding budget preparations had always been the causes of challenges dogging Nigeria’s budgeting process.