The Lagos Chamber of Commerce and Industry, LCCI, at the weekend said late passage of the budget is a threat to achieving the ERGP targets and to Nigeria's goal of becoming one of the top 20 economies by 2020.
In a statement by the Director General of LCCI, Mr. Muda Yusuf, he said some of the implications of the late passage of the 2018 budget include a slowdown in the economic recovery process by postponing the multiplier effect of government spending.
"If funds for critical projects are not disbursed on time, the tempo of economic activities will be reduced, dragging the economy into a state of inertia and economic decline. The late passage of the budget is therefore a threat to achieving the ERGP targets and to Nigeria's goal of becoming one of the top 20 economies by 2020"
"Capital expenditure such as infrastructural development, construction work and payment of contractors will also be affected. This is especially of concern when these funds are meant to be channeled towards sectors that improve the ease of doing business, such as transportation and electricity" he stated. Performance of these sectors, he stressed, is correlated with the success of Nigerian businesses, which are key players in the effort to combat the country's high unemployment rate. It also affects private sector operators that depend on the budget to plan their activities for each fiscal year.
"Delay in passing the budget therefore slows down their activities, with negative economic consequences, In addition to adversely affecting the economy, slow provision of critical infrastructure needed to boost industrial activity negatively affects the country's ability to export locally made products, and therefore reduces its revenue and foreign exchange from non-oil exports; and, there is also the issue of inadequate absorptive capacity as the country may not be able to spend so much money in such little time. This may result in dislocations in the macroeconomy" he said.
According to him, delay in Nigeria's budget process has become the new norm in recent years, and has often been caused by disagreements between the executive and legislative arms of government.
"It is crucial that both arms work on improving the schedule of the country's budget process.
Going forward, the executive order of May 2017 by the Vice-President Professor Yemi Osinbajo, which placed emphasis on the timely submission of the annual budget estimates of MDA's, needs to be strictly adhered to. The executive order directs all federal government MDAs to submit their schedule of revenue and expenditure estimates for the next three years to the Minister of Finance and that of Budget and National Planning on or before the end of May of every year. It also directs the MDAs to forward their annual budget estimates to the two Ministers on or before the end of July every year" he stressed.