Budget 2012 And The Transformation Agenda

The National Assembly of the Federal Republic of Nigeria last week announced the passage of a budget of N4.8trn for the year 2012. Coming only two weeks to the end of the first quarter of the year, the budget raises concerns that need to be addressed.

While it may have been accepted by all that the one that fails to plan may have planned to fail, no one has come up with the fate of the one that consistently makes his plans come out late. But everyone knows that it cannot go without a consequence, a costly one.

It is regrettable that Nigeria has not been able to help herself in the area of late budgeting. It is even more so under an administration that pledges to be transformational. Knowing how the economy revolves around the government and its policies, people in government must endeavour to overcome this snag.

All over the world, governments, organisations and even individuals target the end of year to make plans for the succeeding year. For some serious minded economies like that of the United States of America, their budgets for the next year comes out nearly six months before.

This allows for all the players in the economy to perfect their roles before the time for execution. Consequently, when the time comes, the plan for the year kick-starts with purpose  and on target. But coming out late with ones budget is to stand isolated and to miss the competitive bargaining of resources when it mattered.

Being an economy that depends almost wholly on government is bad enough, but to also fail to capture the interest of the private sector and other countries to develop our economy that requires a lot of outside input, is nothing short of shooting one’s self in the foot.

But that is not the only area of concern; the allocation of resources have continued to worry many Nigerians. The development of infrastructure is still very critical in Nigeria. But to allocate only N1.519trn to capital development and to allocate N2.425trn to recurrent expenditure does not portray Nigeria as a country that wants to develop in a hurry.

Again, it appears the authorities want to keep things the way they were or have not found ways of focusing on development rather than heap money on a system that is not producing for Nigeria. In fact, we expected that by now the number of MDAs would have been cut down to reduce the sum spent on administration.

Also worrisome is the relapse to excessive debt that now attracts N559.6bn for debt servicing. Sadly, this sum is higher than N372.5bn that is allocated to statutory transfers.

It is impressive that the National Assembly tried to reduce deficit in the budget, but the raising of the benchmark for crude at the international market to $72 to achieve the goal, also opens another window for fears.

Last year, the benchmark was $75 per barrel and there were fears in some quarters that the budget could blow in Nigeria’s face if pressures at the crude market pushes the price below $80. Pegging it at $72 is still too close to crisis as the volatility of the market remains high.

Although the budget is expected to do well, because a number of the projects it is to service are on-going, the performance rate of the 2011 budget is yet to be ascertained. Similarly why some projects under that budget were not handled even when the country did not lack revenue has not been addressed.

We think it was high time Nigeria took budgeting more seriously if any appreciable improvement is to be recorded in the country. Clearly, both the executive and the legislature can do better to announce budgets in December to allow wider participation in the economy.

Also worrisome is the retention of an ever-bloated administrative machinery. The culture of setting up more agencies to handle issues that specific ministries can take up can only create the avenue for a few people to be serviced with funds that can provide services to all under capital projects.

This administration prides itself to be a transformative one. We hope that at least the transformation would be seen in the implementation of the budget.