The House of Representatives has passed for second reading a bill to provide the legal framework for the January-December budget cycle.
The national budget bill was debated and passed for second reading on Thursday. The bill, sponsored by Tajudeen Abbas (APC, Kaduna) seeks to define the budget cycle and create a timeline for each stage of the budget.
Over the years, the January-December budget cycle has been an issue of discretion between the executive and legislature.
In the 8th Assembly, it was difficult to maintain the January to December fiscal cycle because of what many believed to be caused by the friction between President Muhammadu Buhari and the leadership of the 8th Assembly.
The 2016 budget was signed in May 2016, while 2017 and 2018 budgets were signed six months into the year. Also, the 2019 budget was signed in May.
However, since the emergence of the 9th Assembly, the country has been able to maintain the January to December cycle.
Even though Section 89 of the 1999 Constitution made reference to financial year, it did not define a financial year.
Clause 2(2) of the proposed bill defines the financial cycle as twelve months, from January to December.
Mr Abbas in his lead debate said the bill specifically provides a timeline for the different stages of the budget process, namely, planning, preparation, passage, execution and auditing.
He stated that Nigeria lacks “an organic law on the processes and procedures for budgeting for the federation.” He added that the bill seeks to complement the Constitution.
“The Constitution is silent on the responsibility of the executive arm or the legislative arm on the various stages of the budget process,” he said.
According to the lawmaker, the bill will define the limit of deficit budgeting and reasons for borrowing.
Although the fiscal responsibility act makes provision for deficit ceiling, for two years in a row, the government has exceeded the 3 per cent deficit-to-GDP threshold, citing national security.
Mr Abbas explained that the Constitution, the FRA, the finance (control and management) act and the financial regulations have not been able to comprehensively address the process of budgeting.
Also, the bill seeks to empower the minister of finance with the power to make regulations on budget. Mr Abbas said, “these regulations may address some issues in detail for better understanding of actors, stakeholders and the general public.”
In 2018, Mr Buhari had rejected a bill that sought to provide a time for the budget. The constitution alteration bill was passed by the National Assembly and the Houses of Assembly, however, Mr Buhari declined assent.
The bill had proposed, among others, that the president or governor must present the budget before the parliament not less than three months to the end of the year.