The Federal Government has extended the life cycle of the N21.8tn 2023 budget and the N2.17tn supplementary appropriation from June 30 to December 31, 2024.
The Spokesman for the President, Bayo Onanuga, in an interview with The PUNCH, said the budget cycle was extended to December to ensure that the capital projects contained in the appropriations were not abandoned.
During Thursday’s plenary, the Senate suspended its rules and gave an expeditious passage to the first, second and third reading of the budgets in barely one hour.
However, it was not a smooth sail for the 2023 Appropriation Amendment Bill, 2024, and the 2023 Supplementary Appropriation Amendment Bill, 2024 in the House of Representatives as the move was opposed by the opposition lawmakers, leading to a rowdy session, which was deftly managed by the leadership.
Defending the elongation of the budget cycle, Onanuga explained, “It is because it (the 2023 supplementary budget) is running simultaneously with the 2023 budget. There are some elements of that budget that were not implemented. That is why they are moving it forward to be implemented.
“They have already got the provisions meant for them. So, they are trying to make sure they implement them based on the provision of that budget. It means the 2023 and 2024 budget will run concurrently.’’
The parliament, which had adjourned plenary till June 10, cut short its Sallah recess to reconvene on Thursday to elongate the budget cycle for the third time.
The PUNCH gathered that the emergency plenary was at the request of President Bola Tinubu.
Last December, both chambers extended the implementation period for the capital component of the budget from December 31, 2023, to March 31, 2024, along with the 2023 supplementary budget passed in November 2023.
Budget extension
Following a request by the President, both the Senate and the House of Representatives again extended the implementation period for the budgetary appropriations from March 31 to June 30, 2024.
With just a few days remaining until the June 30 deadline for the 2023 budgetary appropriations, the two chambers again resolved to extend the budget cycle.
The Appropriation Bills were considered by the Senate Committee on Supply while the Senate Leader, Opeyemi Bamidele, presented the lead debate on the extension of the budget cycle.
Bamidele, in his debate, claimed that the extension was required to allow the Federal Government to complete ongoing projects captured in the budgets.
“This Bill, therefore, intends to extend further the implementation period of the Acts to 31st December 2024, because of the strategic importance of some key projects nearing completion and to allow for continued implementation for the maximum benefit of the country.’’
Abandoned projects
“Undoubtedly, this would go a long way to avoid the compounding problems of abandoned projects. Hence, the need for the enactment of this proposed legislation to extend the implementation,” he added.
Given the critical importance of key projects nearing completion, the Senate leader argued it is expedient to approve the supplementary budget extension to avoid compounding the abandoned projects because some of the projects were not provided for in the 2024 budget.
The Minority Leader, Senator Abba Moro, supported the extension of the appropriation bills, stressing that it was necessary to extend the budgets.
Ali Ndume (APC, Borno South) observed that the primary reason for the extension was to allow the Federal Government to complete ongoing capital projects.
Orji Kalu (APC, Abia North) mentioned that numerous projects remained unfinished across the country.
He urged his colleagues to disregard criticisms regarding the budget extension.
Abdul Ningi (PDP, Bauchi Central) argued against the continuous extension of the budgets.
Ningi advised the lawmakers to ensure that the Federal Government implemented the projects as specified in the approved budgets.
But the Senate President, Godswill Akpabio, assured that the upper chamber would oversight the implementation of the capital component.
Akpabio said, “Implementation is the responsibility of the executive, while oversight is the responsibility of the legislative.”
Following the contributions, Akpabio put the budget extension to a vote, and it was supported by the majority of the lawmakers.
The Senate President subsequently approved the extension.
Earlier, before the bills’ passage, the lawmakers held a closed-door session for two hours.
In the N2.17tn 2023 Supplementary Appropriation Act, N1.01tn was allocated to recurrent expenditure, while N1.16tn was earmarked for capital expenditure.
Major capital projects in the budget include N300bn set aside for the rehabilitation of Eko and Third Mainland Bridges, along with the development, repair, and maintenance of various roads across the country.
The sum of N200bn was earmarked for the provision of seed, agricultural input, supplies, and agricultural implements and infrastructure to support the expansion of production.
The Federal Government also allocated N210bn for Wage Awards to federal civil servants across the country and about N5.5bn for the take-off of the student loan programme.
Like the Senate, the House of Representatives on Thursday passed the 2023 Appropriation Amendment Bill, 2024, and the 2023 Supplementary Appropriation Amendment Bill, 2024.
The chamber voted in support of all the clauses contained in the two bills, but this was not without some rancour as the opposition lawmakers faulted the President’s request, leading to a rancorous session.
The bills sought the extension of the implementation of the capital aspect of the 2023 Appropriation Act from June 30, 2024, to December 31, 2024, as well as the extension of the implementation of the 2023 Supplementary Appropriation Act from June 30, 2024, to December 31, 2024.
President Tinubu presented the two bills via a letter transmitted to the parliament read on the floor of the House by the Speaker, Tajudeen Abbas, on Thursday.
At the resumption of plenary, the executive bills were introduced by the House Leader, Julius Ihonvbere and read for the first, second and third time.
As it was being read for the second time, Ihonvbere, noted that there was no alteration to the contents of the 2023 supplementary budget but “A request for an adjustment of the date to enable the administration to complete the projects that have been started.”
This argument did not sit well with the minority leader, Kingsley Chinda, who contended that the implication of running four different budgets simultaneously might be too burdensome for the Federal Government.
He said the Peoples Democratic Party administration was criticised for lacking a clear budgetary cycle, adding that the current administration was potentially repeating the mistake.
The ranking legislator demanded that the bill be stepped down to enable the government to “Go back to the drawing board.”
He said, “We are aware of the importance of the implementation of capital projects and we know what we know what capital projects can do in the lives of our people.
“But the application for extension of the 2023 Appropriation Act is also coming with the request to extend the life of the 2023 supplementary budget. We are also expecting the 2024 supplementary budget.’’
“A situation where we may have four budgets running concurrently is a bit of a problem. I will suggest that the House leader (Ihonvbere) step this bill down. Meanwhile, the projects not completed in the 2023 budgets can be transferred to the 2024 supplementary budget,” he counselled.
In his contribution, a member of the All Progressives Congress representing Jibia/Kaita Federal Constituency, Sada Soli, noted that the 2023 supplementary budget could not be extended without simultaneously extending the implementation life span of the 2023 Appropriation Act.
Alhassan Ado-Doguwa (APC-Kano) agreed with Chinda’s submission, noting that “There’s a need to put party differences aside and align with the truth in the interest of Nigerians being represented by the lawmakers.’’
He said though running two or more budgets at the same time might be legally defensible, he reminded his colleagues of the moral dilemma of doing so.
Contrary to his submission, Ado-Doguwa pleaded with his colleagues to pass the bill, a demand that the opposition lawmakers rejected.
Before the House dissolved into a closed-door session, Abbas, who presided over the session, said the 2023 supplementary budget is about national security.
“The supplementary budget of 2023 is 90 per cent security-related. Because we couldn’t do everything we wanted to do, the President is asking that an extension be granted. Please, let’s kindly support this,” he pleaded.
When the House reconvened from its closed-door session, members voted in support of all the clauses contained in the two bills.
Meanwhile, a member of the Minority Caucus has described the passage of the two executive bills as an aberration.
Speaking on condition of anonymity because he did not want to be seen as anti-establishment, the member argued that the capital projects in the 2023 budget ought to have been transferred to the 2024 Supplementary Appropriation Bill being expected from the President in the weeks ahead.
He warned against violation of the January to December budget cycle.
He said, “What happened today (Thursday) was an aberration. We are now going to be running three budgets at the same time. Not only is this worrisome, we just have to ask ourselves what is happening in this country.
“The more you think things are changing in Nigeria, the more they look the same. Yes, the argument that the 2023 supplementary budget is largely about security is valid, but isn’t there a better way of handling this?’’
‘’Why not identify what is left undone, put it in the supplementary budget and transmit it to the National Assembly? I can tell you for free that before we go on our next break, we will receive the 2024 supplementary budget. By then, we will be running four budgets concurrently,’’ he lamented.
Meanwhile, the National Vice President of the Nigerian Association of Small-Scale Industrialists, Segun Kuti-George, described the development as a positive move.
He said, “Typically, a budget runs for a 12-month cycle, but sometimes items in the budget remain unimplemented. In such cases, an extension is usually sought until June.
“However, the president is now seeking to extend the capital component of the 2023 budget until December.
“This means the government can implement additional capital projects contained in that budget, which is a positive development.
“It will lead to more projects being carried out under the old budget, impacting the economy positively.”
Speaking on the benefits of the extension, Kuti-George said the extension would create more jobs.
He posited, “This extension will enable more road constructions, create more jobs for contractors, and generate more income and employment opportunities, especially in agriculture. Once the constructions are completed, it will benefit the population even more.”
Small business owners
The National President, Association of Small Business Owners of Nigeria, Dr Femi Egbesola, queried the inconclusive implementation of the 2023 budget by the Federal Government.
He said, “We would have expected that any unfinished business in the 2023 budget be included in the 2024 supplementary budget rather than an extension of 2023 budget implementation.
“One wonders how a government can conveniently run three or more budgets together concurrently, for that is what is playing out now, with this extension.”
Speaking on the implications of extending the budget, Egbesola said it sent a negative image of the government.
He posited, “The implication is that it sends a negative picture of government unseriousness and ability to effectively plan to the international community, particularly international investors.
“This in a way may slow down foreign investment into the country and capital flight from the country by existing investors.”
According to him, at a time of food inflation and insecurity, the government’s concentration on capital components of the budget implies that the immediate welfare of the average citizen may worsen.
He added, “The disposable income ultimately will affect the existence and productivity of the average Small and Medium Enterprises, whose businesses are mostly on the verge of collapse.
“To an average Nigerian, it may paint a picture of government’s insensitivity to the immediate welfare, livelihood and their short term and immediate expectations of a responsible government.”
The National President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, Dele Oye, said the budget extension demonstrated a commitment to completing vital projects that are crucial for national development, adding that it is essential to acknowledge that timely completion of infrastructure and other capital projects can catalyze economic growth, enhance productivity, and improve the overall quality of life for Nigerians.
He, however, asserted that while the intention behind the extension was commendable, it was imperative to consider the broader economic implications, especially in light of the Central Bank of Nigeria’s current monetary policies aimed at reducing the amount of naira in circulation.
He said, “The decision to inject substantial funds into the economy through capital expenditures must be carefully managed to avoid adverse effects such as inflation and currency devaluation.
“Pumping too much money into circulation can lead to inflationary pressures. Inflation erodes the purchasing power of consumers, leading to higher costs of goods and services, which can adversely affect both businesses and households.
“In an economy where the private sector is the primary driver of growth, uncontrolled inflation can disrupt business planning, reduce consumer spending, and ultimately slow down economic progress.”
Oye noted that the CBN has been implementing stringent monetary policies to curtail the amount of naira in circulation, suggesting that the measures were designed to stabilise the currency and control inflation.
He added, “An influx of funds from the extended budget implementation could counteract these efforts, creating a challenging economic environment where the CBN’s policies may lose effectiveness. This could result in a scenario where inflation remains high despite aggressive monetary tightening, leading to stagflation, a situation characterised by stagnant economic growth and high inflation.
“Another critical aspect to consider is the transparency and efficiency in the utilisation of the extended budget funds. While the details of the projects involved in this extension have not been provided, there is an inherent risk of duplication in the current budget.
“Duplication not only wastes valuable resources but also undermines the effectiveness of public spending. It is crucial for the government to ensure that the projects funded under the extended budget are unique, necessary, and contribute positively to the country’s development goals.
“To mitigate these risks, rigorous monitoring and evaluation mechanisms should be put in place. The government must adopt a meticulous approach to project selection and execution, ensuring that each naira spent delivers maximum value to the economy.
“This approach will help in maintaining fiscal discipline, prevent wastage, and ensure that the extended budget serves its intended purpose of fostering sustainable development.”
In conclusion, Oye maintained that while extending the implementation of the capital component of the 2023 budget held significant promise for completing critical projects and stimulating economic growth, it was essential to proceed with caution.
He added, “The potential adverse effects of injecting too much money into circulation, especially in the context of the CBN’s current monetary policies, cannot be overlooked. NACCIMA urges the Federal Government to balance the need for infrastructure development with the imperative of maintaining economic stability.
“Transparency, efficiency, and careful planning should guide the execution of the extended budget to ensure that it delivers the desired economic benefits without triggering unintended negative consequences.”
