… as analysts commend early passage of N10.6tr budget
By Kayode Tokede
President Muhammadu Buhari has signed N10.6 trillion 2020 budget into law. The President signed the bill at his office in the Presidential Villa, Abuja, on Tuesday to return Nigeria to January-December budget circle.
The 2020 Budget passed by the National Assembly provides for aggregate expenditures of N10.6 trillion, an increase of N263.95 billion over the Executive’s Proposal that was submitted in October 2019.
Accoridng to him, “It is my pleasant duty, today, on my 77th birthday, to sign the 2020 Appropriation Bill into law. I thank the National Assembly, in particular, the Senate President, the Speaker of the House of Representatives, and indeed all the Distinguished and Honourable Leaders, and Members, for passing the 2020 Appropriation Bill, expeditiously.
“You will recall, that I laid the 2020 Appropriation Bill before the Joint Session of the National Assembly on 8th October, 2019 and forwarded the 2019 Finance Bill shortly thereafter.
“I am very pleased that the National Assembly worked uncommonly long hours in the interest of our people and the national economy to ensure detailed legislative review and passage of the Budget within two months.
“This patriotic zeal adopted by the Ninth National Assembly has restored our budget cycle to a predictable January to December fiscal year.
“Furthermore, in the twenty years since the return to civilian democracy, this will be just the fourth time that the Federal Budget was passed before the end of the previous year, and this is the earliest.
“The passage of the Finance Bill, which I am told will be done in the coming days, will also be a landmark achievement worthy of recognition, being the first time, this has been done in the last twenty years.
“We look forward to receiving this Bill, shortly, for Presidential Assent. Once passed into law, the Finance Bill will support the funding and implementation of the 2020 Budget. We shall sustain this tradition by ensuring that subsequent budgets are also accompanied by a Finance Bill.
“For these achievements, I must therefore congratulate and thank the Distinguished Senate President, the Right Honourable Speaker and indeed, all members of the Federal Legislature for their commitment and support.
“I equally thank the Ninth National Assembly for supporting important legislations such as the Deep Offshore and Inland Basin Production Sharing Contract Amendment Act and the 2019 Finance Bill. These laws are vital to the successful implementation of the 2020 Budget.
“I am aware of the regular high-level discussions that took place, between senior officials of the Executive and the Legislature during this period. I commend this renewed partnership, the mutual understanding as well as collaboration between these two arms of government.
“Now, we are well positioned to effectively implement the budget and deliver our promises to Nigerians. Businesses will also benefit as they are now in a position to plan more effectively.
“We have to sustain this harmonious working relationship. I expect that, going forward, this will be the norm.”
He said directive has been given to ensure the presentation of the 2021 Appropriation Bill to the National Assembly by September 2020.
He expressed optimism that all Federal Ministries, Departments and Agencies will cooperate with the Ministry of Finance, Budget and National Planning to keep to this timeline.
“I will work with the Ninth National Assembly to give effect to the constitutional, legislative and other actions that may be necessary to address the various challenges currently associated with our federal budgeting process, including the enactment of an Organic Budget Bill.
“The 2020 Budget passed by the National Assembly provides for aggregate expenditures of N10.594 trillion, an increase of N263.95 billion over the Executive’s Proposal that was submitted in October 2019. We have examined the adjustments and may revert to the National Assembly with a request for a Virement or other relevant amendments.
“The Honourable Minister of Finance, Budget and National Planning will make a public presentation of the details of the approved budget.
“With today’s global oil market outlook and our strategic approach to revenue growth, we are optimistic that we will be able to finance the 2020 Budget.
“However, being a deficit budget, an appropriate 2020 – 2022 Borrowing Plan will be forwarded to the National Assembly, in due course.
“Mr. Senate President, Right Honourable Speaker, for this submission, I will once again count on your usual cooperation and support by ensuring quick consideration and approval of the Plan.
To optimize the desired impact, I have directed the Ministry of Finance, Budget and National Planning and all Federal MDAs to ensure effective implementation of the 2020 Budget.
However, analysts have commended President Muhammadu Buhari early passage of 2020 budget into law. Speaking with Nigerian NewsDirect, they expressed optimistic that the nation’s economy would witness effective implementation of the proposed N10.6 trillion budget,
The Managing Director, Enterprise Stockbrokers Limited, Mr. Rotimi Fakayejo commend government efforts in passing the 2020 budget before the end of 2019, stressing that funding the budget might a major headwinds.
In his words, “the funding side of the 2020 budget might be an issue. The early passage gives hope unlike in the past budget was signed into law around June. A budget is never perfect but for the early passage by federal government speaks volume of good things to happen in 2020”
In his response, the chief economist/head of research of PAC research, Mr. Moses Ojo said, the early signing of the 2020 budget is a good sign to the nation’s economy come next year.
According to him, the nation has returned to January to December fiscal year in budget implementation.
He said, “The early signing also means that the federal government by December 2019 will terminate this year’s budget and start implementing 2020 budget, most especially the capital expenditure before the rain begins.”
Speaking on $57 per barrel, he said, “the bench market for 2020 oil price was pegged at $57 per barrel and crude oil price currently at $63 per barrel.
“Mind you, the forecast for 2020 global oil price is $55 per barrel. What is going to happen is that once there is decline in global oil price, it affect on government revenue, especially the expenditure.
“Something may happen that can trigger increase in global oil price up or down. For me, the $57 per barrel oil price propsed by federal government is good for the 2020 budget.”
In addition, the managing director, Cowry Asset Management Limited, Mr. Johnson Chukwu said, the early signing of the 2020 budget is a good move the Buhari’s led-administration.
According to him, “This is for a very long time we’ll have a budget that will run between Janaury and December. It gives the government enough chances to start implementing capital projects.”