For the first time in a long time, the Federal Government’s budget for the year 2020 is expected to take off in time with its signing into law last Tuesday, December 17, by President Muhammadu Buhari. Next year’s budget, which Buhari laid before the National Assembly in October, was passed by both chambers earlier this month.
At the brief signing ceremony at the State House in Abuja attended by Senate President Ahmed Lawan and House Speaker Femi Gbajabiamila, President Buhari thanked National Assembly members for passing the Appropriation Act “expeditiously” and he directed all Ministries, Departments and Agencies [MDAs] to ensure its effective implementation. He however said he was sending a two-year Borrowing Plan to the Assembly since the budget passed is a deficit one.
As Buhari observed, this is only the fourth time in the life of this Republic that the budget is being passed before the end of the outgoing year. All the other budget cycles were thrown out of gear due a combination of late budget presentation and delayed passage by the National Assembly often due to tardy budget defence by MDA heads. Then also, presidents sometimes took a very long period to pass the budget as passed.
While this set of problems has been admirably taken care of in this case, there are still other issues that must still be taken care of. Presidents don’t like MPs to amend their budgets. In years past it led to prolonged signing delays and accusations of budget padding. This time around Buhari did not make such allegations because of his camaraderie with the 9thAssembly’s leaders. Still, he showed unhappiness over the N264 billion increase inserted by the MPs and said he will request for “viements or other relevant amendments.”We hope this will not cause delay in implementing the budget.
Besides, delay also often arises in the release of budgeted funds to MDAs as well as the government’s cumbersome due process mechanisms. Costly project contracts are sometimes not awarded until very late in the year, all of which lead to low budget performance during most financial years. These problems too must be overcome in order to sustain the gains of early passing of the budget.
Some issues waiting in the wings would quickly determine the success or otherwise of the 2020 budget. One of them is the promise to implement the new minimum wage and the consequential adjustments from January. More controversially, increase in VAT is expected to take off in January and could lead to price increases of many goods and services. Trouble could also surface on university campuses. So far, non-academic staffers have enrolled in IPPIS but lecturers have refused to at the behest of their union, ASUU. The government insists that anyone not enrolled in IPPIS will not be paid from January, meaning we are headed for another period of campus unrest.
The government’s borrowing plan is also causing unease in many quarters. Fourteen years after we exited from Paris Club debt traps, there are fears that we are sleep-walking back into another debt trap. It is an area that the Administration must be very careful about despite the necessity of financing a deficit budget.