Budget: Stakeholders on expectations, lessons for 2017

MAN Urges Speedy Implementation, Starting From Infrastructure
Manufacturers have called on the government to apply speed in the implementation of the just signed budget. They also urged government to identify the most pressing issues and tackle them without delay, as Nigerians are running out of patience.

The president of Manufacturers Association of Nigeria (MAN), Dr. Frank Udemba Jacobs told The Guardian that it is imperative that government executes the contents of the budget urgently, in view of its late passage.

To achieve this, Jacobs recommended identifying the “low hanging fruits and starting with them.” This, he said, would require urgent action on infrastructure development because of the huge multiplier effect on the economy. He identified infrastructure requiring urgent action to include electricity supply, which is abysmally low currently and road construction.

Said he: “The President was quoted to have said that the signing of the budget will trigger concerted efforts to reflate the economy, a key element of which is an immediate injection of N350bn by way of capital projects. It is important, therefore, that the said money should be urgently released and its utilisation seriously monitored,” he said.

The manufacturers also urged government to give priority attention to diversification of the economy in order to stop the current reliance on one commodity to survive as a country.

“The process of diversifying the economy should be commenced immediately. Urgent action should be taken to address challenges of the manufacturing sector, while agriculture and solid minerals should be placed on the front burner. The manufacturing sector is key to the diversification of the economy, employment creation, technology acquisition and skill development. It is, therefore, important that challenges should be quickly addressed. The Export Expansion Grant, which was suspended some years ago, should be reviewed as it was meant to encourage export of non-oil products, as well as attract more foreign exchange inflow into the country,” he said.

On the role of MAN in the budget implementation monitoring, Jacobs said MAN tries to do it through a number of ways.
“MAN prepares pre-budget memorandum, which it submits to government before the budget preparation exercise. This document tries to give direction to government on the performance of the economy and ways of improving it. The Association further does a post-budget review, where the budget is analysed and presented to government. It also carries out periodic examination of the budget performance and the economy generally and engages the government, from time to time, to discuss and find ways of moving the economy in the right direction. It should be noted, however, that non-government organisations are hardly consulted on the implementation or otherwise of the budget. I do not know if this practice is the best for a country that is trying to develop,” he said.

The Director General of the Lagos Chamber of Commerce (LCCI), Mr. Muda Yusuf, said basic assumptions components of the fiscal policy is important to its implementation, as any of them could collapse the entire budget.

He enumerated some of the assumptions, as expected oil revenue, Customs revenue, tax revenue and crude oil output. According to him, all the assumptions, which form the basis of the budget, must be strong and achievable for the budget’s sustenance.

The signing into law of the budget, he said, has removed the uncertainty faced by investors and other players, just as citizens will now look eagerly to its implementation and the subsequent benefits.

“The much desired delivery of infrastructure by the federal government can now commence,” he explained. “No major infrastructure contracts have been awarded by the current administration since inception. The expectation now is that subsequent capital spending will positively impact infrastructure provision. We expect contractors arrears will be paid so that they can return to site, especially in the case of uncompleted projects.  The payment of contractors will enhance the tempo of economic activities in the country.”

The LCCI boss was optimistic that economic stimulation process would now kick-start in earnest. “The social intervention programmes of the federal government, the school feeding programme, the microcredit scheme, the mass recruitment of teachers and many others will have a positive impact on the economy. New jobs will be created through relevant value chains and government expenditure. However, there is also need to moderate expectations.  The problems of the economy are much more than what a year’s budget can solve. It is important for government to put in place policies that would boost private sector contribution to economic recovery.”

To avoid delay in the years ahead, Yusuf emphasised need for a timely presentation of the appropriation bill to the National Assembly.
“The bill should be presented much earlier than what has been traditionally the case. This will give sufficient time for the Assembly to deliberate on it. There should be statutory timelines for the various stages of the budget process, from preparation to assent. Such timelines should cover the period of presentation of the bill, period for deliberation in the National Assembly and timeline for assent by the President. There is currently too much discretion on timing regarding the budget process. This needs to be corrected.

“There is also the constitutional dimension to the budget process. It is important to seek judicial clarification on the powers of the National Assembly and the executive on the appropriation act. Sections 80 and 81 of the constitution need to be properly interpreted to define the limits of the powers of the National Assembly and the executive on budget issues. We need to know which organ of the state has the final say on the budget. We also need to know whether the National Assembly has the powers to remove or include items or projects in the budget,” he said.

Dele Oguntebi, an economists and consultant at consolidated Management Consultant Ltd., said when a budget implementation is delayed more than necessary, it would be difficult to achieve the intended development, as envisioned by the government.

“A budget is a written plan for accomplishing programmes of government in line with its objectives and goals within a definite time. It is expected to paint a picture of where the country would be at the end of the year in terms of development and social well being of the citizen. When resources are expended as allocated and in accordance with economic priorities, it will stimulate economic growth by mobilising resources for investment in the public sector, reduce the gap between the rich and poor through some sort of social engineering, including imposition of taxes on the rich and spending more on welfare and preventing business fluctuation of inflation and deflation to achieve economic stability.”

According to him, the budget is the rallying point for the private and public sectors, as it gives the economic direction of the country in a particular year.

He explained that when the budget is delayed in the manner that was experienced, it calls to question government’s seriousness and its ability to manage the economy. It also casts doubts on the integrity of process.

Continuing, he said: “Business of government is slowed down and at the end of the day, developmental targets set in the budget may not be met within the budget year. Invariably, we are being left behind by other more organised nations in the area of socio-economic development.”

He believes there could be loss of foreign investment, as investors want to know what incentives are available for them and where information is not available, they seek options from neighbouring countries.