2025 Budget as gross violation of Nigeria’s Fiscal Responsibility Act

Whenever (and if ever) it comes into existence, Nigeria’s 2025 Federal Budget is already a gross violation of the letter and spirit of the country’s Fiscal Responsibility Act (FRA) 2007. Specifically, the timelines enshrined in the Act with respect to the budgetary process have all been thoroughly breached by the current Alhaji Bola Ahmed Tinubu administration.

For instance, an annual budget is supposed to commence with the preparation of the Medium-Term Expenditure Framework (MTEF), four months before the commencement of the next financial year. Meaning that the MTEF (covering three years) should be ready, and presented to the National Assembly no later than August 31st each year.

Section 14 of the FRA says the Minister shall before the end of the second quarter (that is June) of each financial year, present the MTEF to the Federal Executive Council (FEC) for consideration and endorsement. This document, after approval (or adjustments) by the National Assembly, becomes the basis for the preparation of the estimates of revenue and expenditure for the actual budget.

The FRA also mandates Mr. President to present the budget to the National Assembly at least three months before the commencement of the next financial year. (This means not later than September 30th). This provision is aimed at ensuring that the National Assembly has sufficient time to scrutinize the budget, and make necessary adjustments before its passage.

However, for Nigeria’s 2025 budget, it was not until Thursday, November 14, 2024 that the FEC approved the MTEF (2025-2027) together with the Fiscal Strategy Paper (FSP). This NEC approval, going by the provisions of the FRA 2007 ought to have taken place by end-June 2024. And not later! Shockingly, the federal government went to town with the critical components of the MTEF and FSP, as if the final job has been done on the budget. The wild publicity was advertently pre-empting the duty of the National Assembly that must vet those documents.

Now, almost one month after the ‘improper release’ and publicity for the contents of the MTEF and FSP (including the proposed budget size of N47.9 trillion), the 2025 Appropriation Bill is still in the cooler. Although the National Assembly has hastily rubber-stamped the MTEF and FSP, the submission of the 2025 Budget to the National Assembly has remained in the realm of speculation.

At one point, the rumor mill was awash with stories that Mr. President would be submitting the 2025 Appropriation Bill after his state visits to France and South Africa. President Tinubu was in France from November 27 to December 1, 2024 for a three-day state visit. On Monday, December 2, Tinubu departed France for South Africa. He returned to Abuja On Wednesday, December 4, 2024. One week after his return, no word on the 2025 budget; but Mr. President has, instead, spent the days following his return, playing host to visiting German President, Frank-Walter Steinmeier. 

Unsurprisingly, however, President Tinubu is only on the road to beating the record he made last year, when he presented his very first budget, for 2024, on Wednesday, November 29, 2023. The upshot of this was the rushed and muddled up legislative action on the budget by the National Assembly. In a bid to maintain the budget cycle (by having the 2024 budget from January 1), the National Assembly jumbled and joggled figures in the Appropriation Bill.

This hurried approval of the 2024 budget has since led to the resort to a Supplementary Appropriation Bill 2024 as well as the ‘recall’ of some portions of 2023 budget. And so, in fiscal 2024, there is the approved budget, the supplementary budget and the ‘brought forward’ of the 2023 budget. 

A peep into the not-so-glorious recent past shows that the restoration of the January to December budget cycle had been attained. Thus, in 2022, President Muhammadu Buhari presented the 2023 Appropriation Bill to the National Assembly on Friday, October 7, 2022. A year earlier, he had presented the 2022 Appropriation Bill on Thursday, October 8, 2021.

In line with the rule of law and due process, therefore, the provisions of the FRA 2007 as regards the budgetary process, were almost strictly adhered to under the Buhari administration. And without a doubt, the benefits of the certainty of a national budget cycle to businesses and other stakeholders cannot be overemphasised.

Conversely, the uncertainty, indiscretion in fiscal management and lack of transparency embedded in muddled up budgets are a present danger to economic progress. Clearly, a delayed or rushed budgetary process, such as President Tinubu is reinstating (unwittingly, perhaps), is a recipe for failed public finance management. It is anathema to accountability and transparency in budgetary management.

At present, keeping the 2025 Appropriation Bill in limbo and putting virtually all government resources in pursuit of the Tax Reform Bills presents an ominous augury. President Tinubu seems to be deploying everything in his ‘political armory’ to push the Tax Bills through the legislative process. This has been heating up the polity; ruffled not a few feathers, and drawn the ire and opprobrium of some groups and interests.

Although the Presidency has not linked the delay in presenting the 2025 Appropriation Bill to the National Assembly to its feverish push for the approval of the Tax Reform Bills, the speculation is already gaining traction that the government would most likely anchor the 2025 budget on the provisions of the Tax Bills. Unfortunately, the Tax Reform Bills are already entangled in a web of ethno-political contentions and contestations, with a number of groups calling for their withdrawal from the National Assembly.

Howbeit, the continued delay in the presentation of the 2025 Appropriation Bill for legislative deliberations, a few days to end-2024, amounts to pulling the entire economy far into the woods. The distortions and disruptions inherent in truncating the budget cycle are enormous. The ripple and multiplier effects on economic agents (locally and internationally) are really unfathomable.

It goes without saying that the subsisting delay of the federal budget is rubbing off on the sub-nationals: states and local governments. Some provisions of the FRA 2007 make it imperative for these governments to take a cue from the fiscal stance and profiles of the federal government for their budgeting. No wonder therefore that a number of state governments are also yet unable to put their budgets 2025 together.

As the year 2024 is fast drawing to a close, we hope the federal government appreciates the enormity of economic disaster ahead, without the 2025 budget in place. Time is indeed fast running out!

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