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Saturday, April 15, 2017

2017 Budget: An Observation

    When President Buhari made 2016 budget presentation to the national assembly he apparently was unaware of the politics and corruptions that went with passing of budgets through the two chambers of our national assembly. Mr President state of mind might have been formed under the impression that the budget would be scrutinized diligently and pass over to him in due course to start the implementation of it recommendation. Alas, our honorable parliamentarians had different idea on mind. By the time the budget was pass it was already middle of the year, people in budget office (including the director) have lost their jobs, national assembly was in crisis due to budget padding, and Nigerian economy was on the brink of recession. Up til today, 2017 budget has not reached implementation level, and 'if' and 'when' it is ready for implementation what shall the world expect from it? According to the minister of finance about N1 Trillion worth of projects have been executed in the 2016 budget, a record in the history of Nigeria corrupt budgetary process. Is this a glimpse of what to expect in 2017 budget as Buhari government continue to pump money into capital projects? Already one can noticed the increase in number of infrastructural projects being undertaken by this government from roads, railways, power to airports buildings, as well as increase in commitment toward human development and social projects.

    In term of budgeting for development, Buhari government can learn from the example of China, Malaysia, Singapore and South Korea in the 1980s and 1990s. How they were able to maintained rapid economic growth with equity? According to authors of 'the East Asian Miracle', they combined rapid demographic changes with dynamic agricultural sector and rapid export base. They also maintained macroeconomic stability with human capital investments, strong institutions and effective legal framework. so far Buhari has shown his old conservatism in managing the Nigerian economy in the mids of cash crunched and falling global oil price. One area that Buhari is doing well is in creation of strong institutions and legal environment to ensure corruption free atmosphere for rapid economic growth and development. Looking at the borrowings arrangements of his government over the next two years one can rightly say that Buhari government would not back away from deficit budgeting. Deficit budgeting is not bad in itself in as much as the borrowed money is put into most productive sectors of the economy that will quickly facilitate the creation of conditions necessary for smooth repayment of the loan and the general development of the economy. My advice to this government is that it shall find it priorities and focus on them as time is of essence.