The National Assembly yesterday passed the sum of N13.58 trillion budget for the 2021 fiscal year after increasing it with N505.6 billion from the N13.08 trillion presented by President Muhammadu Buhari in October.
In two separate approvals but containing similar details, the two chambers of the National Assembly also approved the sum of N496.5 billion for statutory transfers; N5.6 trillion for recurrent expenditure; N3.3 trillion for debt servicing and N4.1 trillion for contribution to the Development Fund for capital expenditure.
The budget was passed after the two chambers considered and adopted the report of their Committees on Appropriations.
Experts in financial affairs said there was positive prospects in the projections but called on the federal government to be meticulous in utilising resources by executing viable projects that would improve the life of the citizenry.
They called on the government to closely monitor revenue generation agencies by blocking leakages, and also called on members of the National Assembly to carry out oversight functions for the right thing to be done without intimidation.
Why we increase the budget
Explaining the increase, the Chairman of the Senate Committee on Appropriations, Senator Barau Jibrin (APC, Kano), said there was the late receipt of a spending request for the upscaling of the National Social Investment Programme (NSIP) from the executive amounting to N365 billion.
He also said that the committee, while processing the budget, noted that there was a remarkable increase in Nigeria’s oil price, which is hovering between $47 and $50 per barrel in the international market.
“This is above the benchmark price of $40 per barrel approved by the National Assembly,” he said.
Barau also said there was the discovery of under projection of the total revenue to the tune of N100 billion.
He said his panel also observed “the need to enhance the structure of the budget to allow for the reflation of the economy to accelerate the process of taking out the economy from its current state of recession.”
The Committee, he added, recommended that “because of the increasing global oil prices beyond the benchmark of US$40, the Executive may wish to submit a supplementary Appropriation Bill whenever it deems fit to fund critical areas that will further help to accelerate the movement of our economy out of its current state of recession.”
NASS budget increased by N6bn
The National Assembly’s budget was increased from N128 billion to N134 billion, an increase of N6 billion.
Some of the allocations to the National Assembly and its organs indicated that the National Assembly Management was allocated N15.967 billion
The Senate got N33.267 billion while the House of Representatives was allocated N51.994.
The National Assembly Service Commission got N5.734, while Legislative Aides were allocated N9.602 billion.
The Public Accounts Committee (PAC) of the Senate got N118.970 million while its counterpart at the House of Representatives was allocated N142.764 million.
N9.134 billion will be spent by the National Assembly for general services while the National Institute for Legislative and Democratic Studies (NILDS) was allocated N7.373 billion.
N389.354 million was voted for Service-Wide votes while N275.243 million was allocated to the office of the retired clerks and permanent secretaries.
No more extension for 2020 budget
In his remarks after the passage of the budget, Senate President Ahmad Lawan said the National Assembly would not accede to another request from the Executive to extend the capital implementation of the 2020 budget.
According to the Senate president, the National Assembly’s approval granting an extension for implementation of the capital component of the 2020 budget last week should be fully utilised by Ministries, Departments and Agencies (MDAs) of government.
He added that the extension of capital implementation of the 2020 budget till March 31, 2021, alongside the implementation of the 2021 budget starting January 2021, would guarantee sufficient injection of funds into Nigeria’s economy.
“For Nigerians, this budget that has been passed in the National Assembly today (yesterday) is to ensure that the economy is supported fully through public expenditure because the economy of our country depends largely on public expenditure.
“The budget extension period for implementation of the 2020 budget, which we did last year, is to ensure that the funds that are available for 2020 are not lost.
“So, there will be two budgets running; funds from 1st January 2021, up to 31st March 2021; and then the implementation of the 2021 budget itself to start from January. That is an absolute fight against the recession we are suffering from.
“With a projected three per cent growth in our Gross Domestic Product (GDP) in the 2021 budget, we believe that the recession, which Nigeria is in will be over before the end of the first quarter,” he said.
“I want to urge the executive arm of government, first to ensure that they implement the 2020 budget that will last up till 31st March 2021. And for 2021, we have to do everything and anything possible to ensure that we implement the budget like we tried to do in 2020.
“I believe that the economy of Nigerians will receive the right kind of boost from the implementation of the two budgets,” the Senate president said.
Analysts see prospects, caution on spending
The Managing Partner/CEO Mhoa & Co Chartered Accountants, Abuja, Mustapha Hussain Olarewaju, said the N13.5 trillion budget passed is ambitious, laudable and capable of driving Nigerian development if properly implemented.
He, however, said that the realisation of the revenue target and debt servicing were serious areas of concern that may constrain the budget.
The Director-General of LCCI, Dr Muda Yusuf commended the National Assembly for passing the budget before the end of the year, saying they had demonstrated their commitment to a return to the January – December budget cycle.
According to him, if this is sustained, the level of uncertainty around the annual appropriation and fiscal operations of government will be reduced.
Dr Muda also said it was commendable that N4.1 trillion Development Fund for capital projects was included in the budget.
“We hope that these capital provisions would be committed largely to strategic economic infrastructures,” he said. He stressed the need to build the productive capacity of the Nigerian economy, emphasising that infrastructure was needed to make it happen.
“Budgetary allocations are necessary but are not sufficient to fix the economy. We need to complement the appropriations with quality fiscal, trade, foreign exchange and investment policies,” he said.
The Director, Centre for Economic Policy Analysis and Research of the University of Lagos, Professor Ndubuisi Nwokoma, in his reaction to the budget passage described it as a mere ritual for government operation.
Nwokoma said: “This current government has not been realistic with budgeting. None of the budgets has performed from 2015 till date. From the outset, this government said it wants to archive a 60/40 capital to recurrent expenditure budget structure, this has not happened.
“So much was said about the cost of governance. With all that happened this year, we had the opportunity to restructure the budget but what did we do? We jacked it from N10.5 trillion to N10.8 even with the huge burden of debt service.”
He said a government that was battling revenue and not thinking of cutting the cost of governance was not realistic.
“Security votes are flying all over the place. The size of the presidential fleet is still there. If we are not careful, we will remain in this recession for a while,” he said.
Reacting to the operation of two budgets concurrently, the forensic accountant said: “The government has only given out what they have been doing all these while.
This has always been the informal practice until this government came and said they were doing a zero-based budgeting cycle from January to December.”
He said the budget does not inspire much as the government had not convinced Nigerians that the budget had any real impact in the wellbeing of Nigerians.
The Director-General of the Nigeria Employee Consultative Association (NECA), Dr Olawale Timothy said: “We commend the efforts of the National Assembly for adhering and maintaining the January-December fiscal year. As a check to the Executive arm, we call for more proactive measures in achieving a higher performance of the budget, which currently stood at just 50% in previous fiscal years.
“To achieve some of the provisions of the budget assumptions vis a vis daily oil production of 1.86 million BPD, inflation rate closing at 11.95% and exchange rate at N379/USD requires proactive measures from the monetary and fiscal authorities in developing pro-business measures to stem down the rising rate of inflation and generating adequate FX through exports in the non-oil sector of the economy,” he said.