By Nse Anthony-Uko
(Sundiata Post) –The Senate on Tuesday increased the 2018 budget by 6 per cent to N9.12 trillion preparatory to passing I today.
Recall that President Muhammadu Buhari on November 7 last year had presented an estimate of N8.612 trillion proposed 2018 budget to a joint session of the National Assembly
The budget increase was the highest in six years since the 2012 increase of 6.2 per cent by the legislative arm of government under the Goodluck Jonathan led administration.
“It is not surprising that there was an increase of the budget, especially in light of the political cycle and recent increase in oil prices,” Rafiq Raji, Chief Economist at Macroafricantel.
Oil prices have rallied some $78.6 per barrel as at Tuesday 15 May 2018, representing a 74.7 per cent increase from the 2018 budget benchmark of $45 and a 67.2 percent increase from the $47 benchmark reversal that was made.
Bismarck Rewane, CEO at Lagos-based Financial Derivative Company said “A 6 percent increase in the budget is nothing compared to our GDP. So it is not significant, hence will make no impact.”
The increase comes as the Senate received the long-awaited report on the 2018 Appropriations Bill from its Committee on Appropriations on Tuesday.
A breakdown of the proposal shows that the sum of N530 billion was earmarked for Statutory Transfer; N2.2 trillion for Debt Service; N199 billion for Sinking Fund for maturing loans; N3.5trillion for Recurrent (non- debt) Expenditure, while N2.9 trillion for development fund for Capital Expenditure.
The report was laid in plenary by the Chairman, Senate Committee on Appropriations, Danjuma Goje, and comes six months after President Muhammadu Buhari presented the N8.612 trillion budget estimates to a joint session of the National Assembly.
Trend analysis reveals that the National Assembly often increases the budget estimates given by the executive.
For example, in an election year in 2011, the budget recorded a 17.8percent increase to N4.9 trillion from N4.2 trillion submitted by the executive, accoording to data compiled by BusinessDay
In 2013 under former president Goodluck Jonathan administration, the senate increased the budget by 1.4 percent to N4.99 trillion from N 4.92 trillion submitted.
In an election year 2015, the senate increased the budget by 4.5 percent to N4.49 trillion from the N 4.3 trillion submitted by the executive. Under the current administration of president Buhari, in 2016, the senate reduced the budget by 0.3 percent to N6.06 trillion from the N6.08 submitted.
In 2017, the senate increased the budget by 1.9 percent to N7.4 trillion from the N7.2 trillion submitted by the executive.
In Nigeria, the normal financial year starts in January and ends in December in line with the provisions of the 1999 Constitution. In the last nineteen years of democracy, budgets have always been delayed.
With this development, the January to December budget cycle would not be obtainable with the 2018 budget.
Recall that President Buhari had submitted the proposal to a joint session of the National Assembly on November 7, 2017, with a call on the legislature to quickly pass the proposal and return to January to December budget cycle.
The president, who announced the 2018 budget as “Budget of Consolidation”, said the projected expenditure would drive rapid economic recovery.
He said at the session that with a benchmark of 45 dollars per barrel at an exchange rate of N305 to a dollar in 2018, the budget would consolidate on the achievements of previous budgets to aggressively steer the economy to the path of steady growth.
However, the Senate had on several occasions accused Ministries, Departments and Agencies (MDAs) of not keeping to appointments with the various standing committees to defend their budgets.
The 2018 budget is the most delayed since Nigeria returned to democratic rule in 1999, with May 15, 2018 marking 190 days from November 7, 2017 when President Buhari presented it.
The budget is however expected to be passed by Wednesday or Thursday this week.