Budget and Plans | |
Budget and Plans | |
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Friday,
December 06, 2019 /12:29 PM / By CSL Research / Header
Image Credit: KPMG
In what can be
regarded as a move that may put an end to Nigeria's budget cycle conundrum, the
Senate and the House of Representatives in a joint session passed the 2020
Appropriation Bill that was presented by the President on 8 October. The
passage followed the consideration and unanimous adoption of the reports on the
bill by the Senate and House Committees on Appropriation. Notably, the National
Assembly raised the total estimates from the proposed N10.33tn presented by the
President to N10.6tn. Interestingly, the National Assembly also put a clause in
the bill that it runs from January 1, 2020, raising hopes that the nation's
budget can be restored back to a January-December budget
cycle.
Historically,
the nation's budget has never fit into the fabled January - December fiscal
year- referred to as an organic budget calendar. Since 2014, the gap between
the presentation and the final assent to the budget averaged five months. The
impact of this trend has been that funds meant to be released for key capital
projects are usually rolled over into subsequent fiscal years.
In the case of the 2019
budget, the conduct of the general elections and the supposed power tussle
between the Executive and the Legislature delayed the passage and by extension
the implementation of the budget. Asides availability of finance, we believe
the time lag between the presentation and assent to the budget contributed to
the sub-optimal 22% budget performance as at November (based on N650bn released for capital projects thus far in
2019 compared to budgeted sum of N2.93tn), according to the Minister of Finance.
With the passage of the appropriation bill
by the National Assembly, attention will now be directed towards the executive.
Thus, the fundamental question is- Will the President give assent to the budget
before the end of the year?
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