The annual budget of the Federal Government is central to the success of virtually all sectors of the economy. In Nigeria, delays and poor implementation have been its hallmark. OKWY IROEGBU-CHIKEZE writes that stakeholders in the manufacturing sector, at a forum, stressed the need for proper implementation of the budget to grow the sectors.
Operators have outlined steps to effective budget implementation. They said the late submission of budget proposals by the executive arm of government to the National Assembly and extended deliberation by legislators have remained stumbling blocks on the way of
effective budget implementation.
Speaking at this year’s Seminar/Luncheon of the Financial Services Group of the Lagos Chamber of Commerce and Industry (LCCI), its President, Mr. Goodie Ibru, said: “Over the past decades, we have hardly seen budget implementation at the federal level begin in January of any fiscal year. In fact, it is difficult or nearly impossible for private sector operators to accurately forecast when the annual budget will be approved. To illustrate, it took an average of five months and two weeks from presentation to passage and approval of the Federal Government annual budgets in the last 12 years.”
He warned that unpredictable budget approval timelines make planning difficult and cause inefficient allocation of resources.
Ibru, who was represented by the Deputy President, Alhaji Remi Bello, frowned at the recent findings by the probe panel of the House of Representatives Committee on Budget and Appropriation that less than 45 per cent of the capital component of the Federal Government budget was implemented over the past 10 years.
Stressing the need for an early passage of the budget, he added that the private sector relies heavily on the Federal Government budget to take critical investment and financing decisions.
The LCCI chief maintained that beyond infrastructure deficit, weak institutions and corruption, delays and poor implementation of budget were increasingly inhibiting productivity and private sector growth.
Chairman of the Financial Services Group Mrs. Olajumoke Fashanu said budget implementation has become a major challenge at different levels of governance. She said though it has remained a major issue, the case of the Federal Government was quite pertinent considering that over 50 per cent of revenue is spent at the federal level.
Key implementation challenges she said included extra budgetary spending, procurement problems, poor revenue collection and remittance. She berated the government for what she described as weak budget monitoring with spending agencies not accounting for funds allocated to them.
Mrs Fashanu said this constituted a weak link in the budgeting process, resulting in a low rate of performance and inability of the government to achieve most of its target development goals and objectives.
The Director-General, Lagos Chamber of Commerce and Industry (LCCI), Mr Muda Yusuf, said the budget is predicated mainly on oil revenue and, therefore, vulnerable.
His words: “We have assumptions on inflation and exchange rate. If these indices fail, the budget is affected.”
He advised the government on budget conception, preparation and implementation, noting that poor skill in any of the above affects overall delivery.
“Our public servants can be better at implementing budgets through training and learning more about private sector strategies. There should be capacity building in the public sector for budget planners to improve on planning and implementation. The public-private partnership initiative can come in handy here,” he said.
He also said corruption was affecting the successful implementation of public sector budgets.
“Even where projects have been well articulated and approved, corruption often frustrates the delivery of value to Nigerians.
“There is so much talk about fighting corruption, yet there is little action. Unless we address this malaise, there will be no concrete outcome from our annual budgets.
“The issue of value-for-money needs to be tackled more seriously and the crusade against corruption should go beyond rhetorics,” he said.
Earlier, the Guest Speaker and Lagos State Commissioner for Economic Planning & Budget, Mr. Ben Akabueze, said the state internally generated revenue (IGR) accounted for 60 per cent of the state’s annual budget. He said the state accounted for over 70 per cent of national industrial investments and 65 per cent of commercial activities with the GDP estimated at N13.71trillion or $91.40 billion as at last year.
He said Lagos has infrastructural gap due to lean resources, adding to bridge the gap, it has courted the private sector.
Akubeze said: “Our policy focus is driven by public-private partnership, private sector-led growth, transparency and accountability, human capital development, good governance and participatory planning.”
To implement the state’s budget adequately, he said the government engaged in multi-year perspective to budget planning, revenue forecasting capacity, expenditure ceilings, participation of the public in budget preparation and effective procurement system.
Akabueze added that the measures, last year, improved budget performance from 80 to 89 per cent while it increased IGR in addition to improved public service delivery.
He said the state had demystified budgetary system and has remained a benchmark for the federal and state governments.