ADEDOKUN: Projected Revenue Requires Serious Commitment
Bayo Adedokun is an economics lecturer at the University of Lagos. In this interview with TEMILOLUWA ADEOYE, he calls for a fast-track of budgeting and approval to prevent a sluggish economy in first quarter of 2016.
What’s the implication of delayed 2016 budget?
THE Economy will be sluggish, at least, in the first quarter of 2016, as newly sworn-in ministers will be incapacitated by this delay, which has become our norm in this country. The delay is not justifiable, because the job of everyone comes with a deadline, so is that of political office holders and career civil servants that work with them. Budget in Nigeria dictates the tune of the economy; public sector budget determines the direction the pendulum of economic growth will swing.
Governments in Nigeria have been spending before the National Assembly gives approval, but I suppose there is a limit to what can be spent without allocation from the budget. There are loopholes in our Constitution and these loopholes create avenue for constitutional lawyers to express divergent views, all the same, government must rise up to its responsibilities, the era of alibi is over.
In the absence of timely budgeting, what do you expect from government?
I expect the government to be proactive by fast-tracking the whole process of budgeting and approval by the National Assembly, if it requires extra working hours on the part of the budget office and the presidency, it is worth the sacrifice. PMB came in since May 29, seven months is enough notice for preparation of next year’s budget, after all, and we only have 12 months in a year.
We hear government is projecting N8 trillion for next year, is this feasible in terms of the dwindling fortune from oil?
Currently, Nigeria is disappointed with revenue from crude oil, as the price is not in a hurry to recover, none the less, a realistic budget assumptions should be made this time around in order not to build castle in the air, some significant amount can still be realised from sales of crude oil if oil theft and other leakages in the sector are blocked.
Custom duties and other ports charges are significant sources of revenue in Nigeria. As it is, the revenue from the ports is under reported, if government can work hard to ensure proper reporting of the revenue, more than half of the budget can be sourced from this neglected cash cow.
Non-oil revenue can also help, particularly, solid minerals sector. Government needs to ensure reforms in the sector continue to yield expected results. N8 trillion budget is not over ambitious for Nigeria, the largest economy in Africa.
What do you think should be the focus and priority of the government in its maiden budget?
The focus and priority should be security, agriculture, solid minerals, education, health, social welfare and hard infrastructure.
The Vice President was quoted as saying 2016 budget will be one of zero budgeting. How practical is that?
I suppose he meant the budget would be based on what needs to be done, and what it costs. However, a balanced budget is one where all expenditure is covered by revenue. But Projections cannot be taken out of budget process; the oil benchmark that will be assumed is a projected price of crude oil in future contracts, actual revenue may fall below the projected revenue. In such a case, will the government not implement the budget? Definitely, the budget may have to be financed through borrowing, depletion of reserves. If government is confident that projected revenue will become actual in 2016, it is a possibility, but it requires serious commitment on the part of the government, and the people of Nigeria.