A financial expert, Prof. Uche Uwaleke, has urged the National Assembly to ensure a proper and efficient scrutiny of the 2025 budget proposals presented by President Bola Tinubu.
Uwaleke, a Professor of Capital Market, is also the Director, Institute of Capital Market Studies at the Nasarawa State University Keffi.
He said this in an interview with the News Agency of Nigeria (NAN) on Sunday in Abuja.
NAN reports that Tinubu had on Wednesday, laid the 2025 budget proposals, tagged “Budget of Restoration: Securing Peace, Rebuilding Prosperity” before a joint session of the National Assembly.
The budget had an expenditure projection of N49.7 trillion, with a projected N13.4 trillion deficit.
The key parameters adopted for the 2025 budget included crude oil price of 75 dollars per barrel and oil production of 2.06 million barrels per day.
According to Uwaleke, as the lawmakers consider the budget proposals, it is important that the contents are properly scrutinised before the appropriation bill is passed.
He said that a major snag to a thorough interrogation of the bill is its late presentation to the National Assembly.
“Section 81 of the constitution allows the president the liberty to lay the appropriation bill at any time before the commencement of the next financial year.
“However, late submission of the budget bill makes it difficult for the National Assembly to undertake proper scrutiny of the proposals.
“The approval process is, thus, hamstrung by the limited time available for debate,” he said.
He said that extant literature supported the fact that the timing of the submission of the budget proposals significantly affected the quality of analyses and deliberations by the legislature.
“As a rule of thumb, a national legislature requires a minimum of three months for effective consideration of the annual budget estimates.
“Regrettably, this has not been the practice in Nigeria over the years,” he said.
Uwaleke suggested a budget law similar to the U. S. Congressional Budget Act of 1974, which lays out a formal framework for developing and enforcing a “budget resolution” to guide the budget process.
He said that the envisaged budget law should provide a timetable for the various budget stages, and strengthen a nonpartisan National Assembly Budget Office to aid in budgetary information and planning.
He said that the law would also encourage stronger collaboration between the various stakeholders.
“Such a law should ensure that, like the general bills, the appropriation bill is subjected to public hearing.
“Indeed, the review of the budget bill by the National Assembly provides a major opportunity for public scrutiny and civic engagement in respect of any concerns the public may have,” he said.
He, however, said that the budget reflected its title, with the lion shares going to defence and security (N4.91 trillion), infrastructure (N4.06 trillion), education (N3.52 trillion) and health (N2.48 trillion).
He said that the budget projected that inflation would moderate to 15 per cent in 2025, while the Naira would appreciate to N1,500 per U. S. dollar.
According to him, the projections are on the back of expected reduction in importation of petroleum products.
“This is alongside increased export of finished petroleum products, bumper harvests enabled by enhanced security as well as increased foreign exchange inflows,” he said.
Uwaleke expressed concern that the 2025 budget would most likely witness a high level of off-budget funds, thereby, masking the true picture of government fiscal position.
He said that recurrent (non-debt) spending made provision of N846 billion for the new minimum wage related adjustments.
He, however, said that it was doubtful if that amount would be sufficient to accommodate the attendant bailouts to sub-nationals by the Federal Government in support of the implementation of the new minimum wage.
“These potential off-budget funds are capable of undermining government’s plan to progressively reduce deficits and borrowings over the medium term.
“For the 2025 budget not to run into a major hitch, it is important that as much as possible, all claims on public financial resources are identified and reconciled within the framework of the budget,” he said.
The expert also raised concern about financing of the N13.4 trillion deficit, in which asset sale and privatisation proceeds would contribute N312 billion, while N3.8 trillion represents multilateral/Bilateral project-tied loans.
He said that the bulk of the borrowings (N9.3 trillion) would be largely discretionary and non-project tied.
“In order not to compound the already huge debt burden the country is facing, every effort should be made to ensure that all long-term funds sourced from the debt capital market are tied to self-liquidating projects.
“The budget breakdown, contained in the executive proposal, is meant to provide the nuts and bolts that will facilitate budget implementation and control.
“Besides the concern which the financing of the deficit raises, there are equally other weighty issues that deserve careful scrutiny by the National Assembly.
“For example, a thorough review of the line items that make up service wide votes and capital supplementation can free-up significant funds that can be channelled to other critical areas such as agriculture and solid minerals.
“The National Assembly should interrogate the composition and rationale for the margin for increase in costs and recurrent adjustment (N12 billion) as well as the line item tagged “contingency recurrent” (N36 billion).
” Curiously, the same figures appeared under service wide votes in 2024.
” Equally, under capital supplementation is a line item known as “contingency capital” (N200 billion), which also featured in 2024 budget for same amount,” he said.
He said that the opaque description of those items, as well as their presentation, called for closer scrutiny.
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