Budget delay portends danger to Nigerian economy

Economists have warned that the delay in the budget presentation in the election year portended danger to Nigerian economy.
Dr Soliu Hamzat, a Lecturer in Economics Department in Ahmadu Bello University (ABU) Zaria, Kaduna State, cautioned the executive and legislative arms of government over the consequences delaying the 2019 Budget.
He explained that 2019 Budget ought to have been presented before now and expected speedy passage by the National Assembly owing to general elections that would take attention of both members of the executive and legislature.
“On careful observation you will note that the 8th Assembly takes average of seven months before passing appropriation bills since 2015.
“This means the delay being experienced now in sending the bill for legislation will further cause delay in its passage, especially as elections must have been won and lost by February 2019.
“One of the implications is that the losers in February election among the parliamentarians will not have much incentives and motivation in contributing towards early passage of the bill,” he said.
The lecturer noted that the implications of all these on the economy were that the expected recovery, using appropriation might not be achieved.
He added that the the actual fiscal period over which the new government would deliver on infrastructure would be drastically reduced.
Hamzat said that the effect would further have negative impacts on the welfare of Nigerians.
He urged executives to avoid any further delay and send the budget to the national assembly as quickly as possible.
He also enjoined the legislature to also take it up as a matter of priority and pass it as soon as possible.
Similarly, another economist from the Federal University Dutse, Dr Aminu Mustapha, said the delay would distort government’s programnes.
He explained that budget had a cycle in which it should be completed within stipulated time.
“In Nigeria, the Financial Year starts from January and ends 31st December and when a budget is approved in the months into the financial year then the programme of events will be distorted.
“The Budget Evaluation will be difficult or impossible. For instance, some time first quarter report has to be discarded or shifted.
“And sometime the Midyear review, which finding determines whether the macroeconomic trends are favorable or not and the need for prompt action, will not be possible or will come late.
According to him, this delay will slow down the economic growth as government expenditure is restricted to operation only, thereby making the real sector of the economy to suffer.
He said that this could also increase uncertainty in the business environment as Investments, especially the ones that were tied to foreign exchange and per barrel of crude oil projections needed to be captured in the budget.
He added that the increasing uncertainty could drive away foreign investment and sometimes domestic ones.
Mustapha advised the two arms of government to start working in earnest because budget was an annual programme and must be ready before the beginning of a financial year.
According to him, it is not proper to implement a 12-month programme in six or seven months.