The National Assembly will soon set legislative machinery in motion to amend the Financial Year Act 1980 which states that the financial year will run from January 1st to December 31st every year.
Although Section 318 (1) of the 1999 Constitution (as amended) defines financial year as “Any period of 12 months beginning on the first day of January in any year, or such other date as the National Assembly may prescribe,” BusinessDay leant that plans have reached an advanced stage by both legislative houses to specifically prescribe the financial year to be 12 months from the date of the signing of the Appropriation Bill.
This comes as financial experts have expressed concern that the Presidency has violated the Fiscal Responsibility Act 2007, which stipulates that the Presidency shall transmit the Medium Term Expenditure Framework (MTEF) to the National Assembly, at least four months to the end of the next financial year.
Specifically, Part II (Sec. 11 1b) of the Fiscal Responsibility Act 2007 states that: “The Federal Government shall not later than four months before the commencement of the next financial year, cause to be prepared a Medium-Term Expenditure Framework for the next three financial years”.
Going by this provision, the MTEF ought to have been transmitted to the National Assembly as of August 31st this year.
But three weeks to the end of 2015, neither MTEF, which precedes the budget, nor the 2016 Appropriation Bill has been submitted to Parliament.
The report of the Ad-hoc Committee on Legislative Agenda for the 8th Senate, had called for harmonisation of the election cycle with the budget cycle of the country.
“Given that our election cycle runs from the end of May, there may be need to synchronise this with the budget cycle to avoid the budget distortion and non-implementation that arises in any election year which affects delivery in the critical first year of a new government”, Senator Ali Ndume, Senate Leader and Chairman of the 18-man Committee, stated in his report.
Speaking in the same vein at a two-day National Assembly Dialogue in Abuja with the theme, ‘Economy, Security and Development’, Yakubu Dogara, Speaker, House of Representatives, advocated an amendment of the Financial Year Act to be 12-months from the signing of the budget into law.
He said: “The only way a Budget would have any realistic chance of full implementation is if it is operated for 12 calendar months as the spirit of Section 318 of the Constitution seems to suggest”.
Although the National Assembly last week passed the 2015 supplementary budget, economist and budget historian, Tunji Ogunyemi said the time spent on passing the supplementary budget is part of the time that should been spent on passing the 2016 budget, had the Executive sent the document on time.
Ogunyemi expressed concern that no single budget in the last 16 years had been passed expeditiously enough to commence from January 1, according to the Financial Year Act.
“The budget is not just an economic statement. It is also a law that has expiry date from January to December”, Ogunyemi stated.
He submitted that the National Assembly would need at least three months to do a thorough scrutiny and passage of the 2016 budget when submitted.
He said: “I am giving the benefit of the doubt to this government that this time around, it will be able to call the National Assembly outside of the chambers and agree with it on the need to expeditiously pass the (2016) budget (when submitted)”.
Vice President Yemi Osinbajo had disclosed that the Federal Government would use a zero-based budgeting format for its 2016 budget planning.
But Ogunyemi canvassed for a multi-year budgeting system, which he hoped would enable government to tap into revenue profile more efficiently in such a way that it gives a long-term plan for revenue generating agencies like Nigerian National Petroleum Corporation (NNPC), Nigeria Customs Service (NCS), and Federal Inland Revenue Service (FIRS) amongst others.
This, he said, is achievable with the implementation of the Treasury Single Account (TSA), which ensures that all government revenue, receipts and income are collected into one single account, maintained by the Central Bank of Nigeria (CBN).
OWEDE AGBAJILEKE
