The Federal Government’sN8.83 trillion 2019 budget bill earlier passed by the National Assembly was assented to by President Muhammadu Buhari on Monday last week, May 29. It was almost six months lateand in breach of the provisions of both the Constitution and the Fiscal Responsibilities Act. Both instruments provide for an annual budget cycle that runs from January to December. However, the budget proposal was presented to a joint session of the National Assembly on December 19, last year, which inevitably set in motion the delay associated with its late passage. The fear now is that its implementation could also face slips and failures.
The projected expenditure is N8.3 trillion,which represents a shortfall from the N9.2 trillion budget for 2018 and N8.61 trillion budget for 2017. Meanwhile, the expected revenue for 2019 is N6.18 trillion, which is expected to come from sources including the daily sale of 2.3 million barrels of oil at a benchmark price of $60 per barrel. The mismatch between the expenditure and revenue comes to N1.43 trillion which the government hopes to fill in with borrowed funds. The government has attributed the revenue shortfalls to lost earnings from investments including the Joint Venture Contracts (JVCs)with oil companies.
Meanwhile, debt servicing is to gulp N2.14 trillion, 80% of which is to service domestic debts that constitute 68.18% of the government’s total debt portfolio. According to Director General of the Debt Management Office [DMO] Patience Oniha, the country’s total debt stock as at April 2019 was N24.4 trillion.This is hoping that the measure will bring relief to the large number of government domestic creditors ranging from contractors to banks,for whom the government’s serial indebtedness has dampened growth in the economy.
Another significant feature of the 2019 budget is the reduced statutory allocation to MDAs including the National Assembly which stand at N492.36 billion. This is a marked drop from the figure of N530 billion for 2018. The reduction of allocation to statutory bodies could go even further, as it only fuels unjustifiable expenditure as well as personnel costs for a largely idle and overbloated public bureaucracy. Such savings could have been channeled to the capital sector which in the budget is allocated N2.03 trillion as against N6.18 trillion for recurrent. While this may reflect an improvement on government’s perception of the need for enhancing capital development in the country with respect to infrastructure growth, the adequacy of such allocation is doubtful.
All said,the 2019 budget may not have generated much hope for change in the country’s budget culture.There is the urgent need to end the culture of delayed budget presentation, passing and signing into law, all of which have been tardy since the return of democracy in 1999.Secondly, government’s sustenance of the tight money policy into its second term could push the Nigerian economy back into the abyss and could intensify the already harsh conditions of living for most Nigerians. While the tight money policy adopted by the administration at its advent in 2015 could be justified by the circumstances it met then, the deleterious effect such has imposed on Nigerians from virtually all walks of life demands its relaxation. Life in the country has become anything but comfortable for the citizens with the more restive elements engaging in vile conduct and criminality.
Beyond every consideration is the need for the 2019 budget to facilitate the actualization of the government’s flagship economic development blue-print which is the Economic Recovery and Growth Programme, ERGP. The success of the 2019 budget will not be measured in the quantum of figures on paper but on how many Nigerians are impacted on by its implementation.
For a country that is presently cowed down by the image of being the poverty capital of the world, the promise of budget 2019 offers the government the opportunity of making a change.
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