Release the budget, economy needs capital

The Federal Government has a document at the National Assembly worth N8.61 trillion, which is still being debated on by men and women of the hallowed chambers in Abuja. e amount represents the Federal Government’s spending proposals for 2018; and it is supposed to be the last full budget this government would be implementing before the elections, next year.

This delay in passing the budget is not a new thing. Delay happened with the first and second budgets of this administration. While it is welcoming to see the National Assembly carefully scrutinize the spending plans of the government, despite the ruling party controlling both chambers, it is also a reflection of the fact that both the executive and the legislature are working at cross-purposes.

How government continues to carry on despite these yearly delays remains one of the wonders of Nigeria. We believe that at this time, when the budget has not been approved, government spending is being undertaken from money appropriated and approved as 2017 budget, which, obviously has been extended. This approach to the budget continues to leave a lot to be desired given that the Nigerian economy is in dire need of a massive injection of capital.

For decades, perhaps since independence, the government has remained the main driver of the economy, despite the lip service often paid to wanting to see a private-sector led economy. For the size of Nigeria and its population, N8.61 trillion is not a lot given the dire need of the country for capital. To then delay its approval, and consequently, its implementation does not show seriousness on the part of both the executive and the legislature; especially as it concerns the need to work together speedily and judiciously for the good of the country and its people.

This recurring attitude to the budgeting process, we think, is a clear sign that something is seriously wrong. If this were to be the United States, where things are done by the books, the government would have come to a halt. But in Nigeria, the executive carries on, just waiting, without trying to trigger o the much acclaimed political tool of lobbying to see that things get quickly done. We are already in March, and it is projected that the way the debates are going, we might not see an approval until April. As men and women of the chambers keep the executive arm of government waiting, the economy suffers.

Yet, it is this economy that is at tenterhooks about what could become of it in the face of the starvation of much-needed capital. It is even more worrying given that this is the year before the elections. The International Monetary Fund (IMF) has already drawn attention to the danger Nigeria faces if what needs to be done in the area of policy formulation is allowed to suffer through delay because of the approaching elections.

It would seem to us that the advisory warnings were often given by individuals and institutions when seemingly unpalatable in the ears of government are taken wrongly and the response is antagonistic. The IMF has said, after studying the Nigerian situation critically, that people are getting poorer. It has acknowledged that progress was being made with Nigeria getting out of recession, but it says real GDP per capita was falling and that Nigeria has an economy that is scally domineering and with structural constraints.

We agree with the IMF that Nigeria still needs “comprehensive and coherent economic policies” and that these are urgent as the government gets on its final lap heading towards the elections in 2019. Nigeria needs investments. Those investments will only come when investors see that there are seriousness and belief in the economy through the actions that the government takes.

There must be clarity that this is not a government that is at war with itself, unable to speedily pass its budget with its majority at the National Assembly. To investors looking in from outside, it would seem Nigeria was operating a government of one party, many voices.

We think that the government has all too soon forgotten the promises it made about spending its way out of recession. While Nigeria has come out of recession, it is very obvious that, as the numbers show, the government did not spend its way out of recession but was fortunate to have oil prices former and stable production figures. And there are many things it has paid lip service to which do not bear being repeated here. But it must wake up and get serious with the business of economic management and listen to wise counsel.

There is demand deficiency in the economy, which needs to be addressed so that investment can pick up. We think addressing that demand deficiency needs to start with government getting its budgetary act together and the APC government, which controls the executive and legislature, getting serious to resolve the budget logjam. For if the budget was designed to spur investment and jobs, how would it do that if it is held up by this showboating of a sort? The Nigerian budgeting process takes too long, for no meaningful reasons.