2015: Jonathan or Buhari Budget

It is now four months into the New Year and the 2015 budget has not been passed. This is not unusual in Nigeria, where records show that it takes about four months, on average to complete the budget process from “submission” to “assent”.

What is unusual, however, is the season in which this budget impasse has fallen into; when we consider the fact that the ruling party will give way for the first time in 16 years to an opposition party government led by President-elect Muhammadu Buhari.

This raises the question: do we pass the budget now or do we wait for Buhari?

Oil prices have fallen by 52 percent since June last year; exchange rate pressures have led to double naira devaluation; and external reserves have plunged below $30 billion.

These factors and many more have led to a precarious situation for the economy with revenue shortfalls and payment arrears stacking up.

As it stands before the National Assembly, the 2015 budget has been revised to an oil benchmark price assumption of $52 per barrel among other reported adjustments, in a bid to tighten the fiscal envelope.

On one hand, the major rationale for passing the budget should be a keen adherence to an institutional process that respects the continuity of the state over change of government. In other words, the outcome of an election should not hinder on-going economic development from spending the ‘very little’ that has been budgeted for capital projects; neither should it hinder the continuity of state machinery in terms of wages and other recurrent spending.

On the other hand, there are equally rational reasons to wait for the Buhari administration. Owing to differences in approach to governance and national development, implementation of the budget and the medium term expenditure framework (MTEF) would be the full responsibility of the new administration.

A third scenario to consider is the likelihood of a supplementary budget as has been predicted by many experts. This would incorporate the necessary and most beneficial initiatives from the current administration while capturing the totality of the development goals and objectives of the incoming Buhari government.

As the National Assembly members make a second attempt to reconvene after the March 28 elections, they must be reminded of their duties to the nation and the need to sustain the continuity of the state.

A recent report by the Central Bank of Nigeria (CBN) showed that the government expended N367 billion in January 2015, incurring an estimated deficit of N101 billion.

Leaving a budget ‘un-passed’, effectively gives an outgoing executive a ‘carte blanche’ of up to 50 percent of the previous year’s spending plan. This may not be the most prudent of decisions.