ANALYSIS OF FEDERAL GOVERNMENT OF NIGERIA’S 2018 BUDGET

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Introduction

President Muhammadu Buhari, on Wednesday 20 June 2018, signed the 2018 Appropriation Bill of the Federal Government of Nigeria (FGN) into law. The final assent came 7 months after presenting the Appropriation Bill to a joint session of the National Assembly on 7 November 2017.

It would be recalled that the President presented a Budget of ₦8.61 trillion to the lawmakers in 2017. However, this figure has increased by ₦508 billion (6%) to ₦9.12 trillion, due to changes made by the National Assembly. While the President appeared to have signed the Budget amidst concerns of delays, reduction of allocation to certain propriety projects and the addition of new projects by the National Assembly, he reiterated his commitments to speedy execution of the Budget. However, these concerns may affect the full implementation of the Budget.

2018 Budget at a Glance

With an aggregate expenditure of ₦9.12 trillion, proposed revenue of ₦7.17 trillion and a deficit of ₦1.95 trillion, the 2018 Budget is the largest in Nigeria’s history (in Naira terms). The Budget 2018, which is tagged Budget of Consolidation, is aimed at consolidating previous years’ achievements and ensuring growth and stability as Nigeria recovers from a period of economic recession.

Some of the challenges that may create impediments to full implementation of the 2018 Budget, particularly the capital expenditure, include the following:

  1. Being a deficit budget, the President will be required to secure approval of the National Assembly for the borrowing plan. The speed with which this process is completed will affect the execution of capital projects.
  2. In view of some cuts in the allocation to certain capital projects, the President has indicated an intention to submit a Supplementary/Amendment Bill. How quickly will this process be completed?
  3. The due diligence process required for the award of government projects may inadvertently delay the commencement of capital projects. How quickly will the procurement process be completed?
  4. Ministries, Department, and Agencies (MDAs) of government will be required to implement the newly introduced capital projects for which the required ownership of conceptualization, design, and costing needs to be passed over by the National Assembly. Do the MDAs have the required capacity and commitment to execute these projects?
  5. With six months into the calendar year, elections scheduled for February 2019 and subsequent inauguration, it is unlikely that the Budget can enjoy the full fiscal year of implementation.

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