10 Important Points from Budget and Planning Minister’s Channels TV Interview on Implementing the 2017 Budget (June 22, 2017)

In an interview with Channels Television on Thursday June 22, 2017, Senator Udoma Udo Udoma, Minister of Budget and National Planning, addressed concerns regarding the implementation of the recently signed 2017 budget. Here are ten key issues he clarified.

1. On the controversies surrounding the budget: Budgets are always controversial because basically, the Executive makes proposals and the National Assembly makes proposals, so there are various interests and therefore, it is a negotiation. We have limited resources and those limited amounts of resources and those resources have to be spread and spent consistently with the administration’s programmes and policies.

2. On managing the controversies between the executive and the legislature over the budget: Through engagements. We start early, engage the national Assembly early, explain what the government programmes and objectives are, and with such engagements, there will be improvement. At each stage, we explain the objectives of the government. In this particular case, it was likely to get easier because we have an Economic Recovery and Growth Plan (ERGP), and this plan was developed after extensive consultation with the National Assembly. I worked and led teams and we met with the National Assembly and relevant committees and we took their input on board in developing the ERGP. So that will help, because when we are engaging, we will both have to agree that the budget has to be in accordance with the plan, and that limits the areas of disagreement.

3. On the threat of going to the Supreme Court to interpret the powers of the National Assembly: Basically, you discuss and negotiate and at the end of the day, you will see how far you can go but ultimately, whether anybody goes to court or not, in the end, you are going to have to sit down and talk, so disputes over budgeting have to be discussed.

4. On the feasibility of spending 30% of the budget on capital expenditure: We are hoping to change the fiscal year. We are hoping, for the 2018 budget, to submit the budget to the National Assembly by early October [2017] so they can pass it by December. If that works out, which we are very optimistic it will, then the 2017 budget will be a very short one (six months instead of one year) and that means that when we’re preparing the 2018 budget, we should roll over a number of the projects in the 2017 budget into the 2018 budget so that we can now start from January to December and go back to the normal fiscal year.

5. On the budget calendar: The constitution provides for yearly budgets. The issue really is to try and get the sequencing right. We try to get the budget to the National Assembly in time; we encourage them to pass it in time so that we start January to December. That makes planning for everybody easy because this budget just like the 2016 budget focuses on the private sector. We want to create the enabling environment for the private sector, so the private sector needs to know what the budget is so they can plan. So to have a more predictable budget, January to December, is our aim.

6. On the ability of the budget to take Nigeria out of recession: The aim of the budget is to get us out of recession and we are doing this by spending. This is why we have 30% for capital and out of that capital; over 50% is for infrastructure. So we want to do roads, railway, power — all the things that will get contractors back to work and stimulate the economy. That is the target of the budget.

7. On the private sector’s response to the budget signing: It is still early days since the budget has been signed but I notice a lot of enthusiasm. A lot of people who are feeling more optimistic about the country, the direction of policy, the support that the government is giving the private sector. The Acting President issued some Executive Orders to try and make it easier to do business. One of the things is that a company’s incorporation must be done within 48 hours and we understand that it is already being achieved and also, 24-hour service is now being provided at the ports. So we are focused on getting the private sector working again, and people are responding to it.

8. On whether the budget can/will stimulate a stronger private sector: We are trying to address the Small and Medium Scale Enterprises, particularly in things like the agriculture industry. We are recapitalizing the Bank of Agriculture (BOA) and the Anchor Borrower’s Programme (ABP) by the Central Bank, to deliver single-digit-interest loans to farmers. We know that bringing down interest rates across the board is challenging. We are trying to work together to bring interest rates down over time for the Small and Medium Enterprises by having specialised institutions giving them [credit].

9. On procurement timeline challenges: The procurement process is a cause of concern, but we had encouraged the MDAs to start the procurement process before the budget was signed. There are also a number of ongoing projects for which procurement had already been concluded, and so those projects can get up and running immediately.

10. On increased engagement between the government and Citizens: We are addressing that issue. The Director-General of the Budget Office actually made a presentation. There is an interactive website where questions can be asked, information can be retrieved and answers can be gotten. We have also prepared a “Citizens Guide to Understanding the 2017 Budget” booklet. It is available in hardcopy and is also on the website. We are also encouraging the citizens to help us monitor projects. We need everybody to be engaged in it for the success of the budget.