By Eze Onyekpere
The recent extension of the 2024 budget implementation from June 2025 to December 2025 by the National Assembly upon a request from President Bola Ahmed Tinubu is fraught with a lot of challenges and illegalities. This discourse reviews the implications of the extension for Nigeria’s public finance management as well as the welfare of the citizens. It further examines the legality of the action and ends with recommendations on the way forward.
It is imperative to begin with the constitutionality and legality question. The Financial Year Act provides that the financial year shall, pursuant to S.318 (1) of the Constitution of the Federal Republic of Nigeria 1999, be the period of twelve months commencing on1st January and ending on 31st December. The referenced S.318 of the constitution is the interpretative part of the Constitution and it states that “financial year means any period of twelve months beginningon the first day of January in any year or such other date as theNational Assembly may prescribe”. In furtherance of these two provisions and the general legislative powers to make laws for the peace, order and good government of the Federation, the 2024 Appropriation Act provides in S.1 (3) that no part of the amount provided in this Act shall be released from the Consolidated Revenue Fund after the 31st of December 2024. Furthermore, S.12 of the Act provides that in accordance with S.318 of the Constitution, the Act will expire on December 31 2024. These provisions of the 2024 Appropriation Act are standard clauses in every appropriation process and in tandem with the Constitution and Financial Year Act.
With the foregoing as indisputable legal facts, a proper reading of the meaning of financial year in the Constitution and the Financial Year Act will show that what is conferred on NASS is a power to make laws and to prescribe a new financial year if in its wisdom and judgement, it is convinced that the 1st January to 31st December period is no longer in the best interest of the Federation of Nigeria. It is not a power to attempt to arbitrarily redefine the financial year, from year to year. Furthermore, what the National Assembly has done over the years is not an extension or redefinition of the financial year and I have never heard NASS make a claim to have redefined the financial year. All the NASS has done is an extension of the period for capital budget implementation. This is a not a practice supported by the Constitution, case law or any other jurisprudential authority.
Secondly, the Appropriation Act 2024 is valid law and cannot be amended by a mere resolution of NASS. To amend a law, a bill must be presented and go through the legislative mill, be passed and thereafter get presidential assent to become law which amends a previous law. From available public information, the legislature proceeds by way of resolution which to all intents and purposes cannot amend a law. It is also not constitutionally recognised that the exercise of legislative powers for redefinition of the financial year will be done by resolution.
The next issue is that requests for the extension of the period for capital budget implementation is usually a result of the negligence, tardiness and incompetence on the part of the key functionaries of the executive arm of government. Budgets, of late, have been passed on time and ready for implementation from the 1st day of January in each year. To fail, refuse and neglect to implement the core part of the budget and come forward with a request for extension is like a request to be commended for incompetence and failure. NASS has the power of oversight and should have seen this failure all along and taken steps to avert it. NASS becomes an accomplice in the act of illegality by obliging failure.
Beyond legalism and constitutionality, the budget is divided into recurrent and capital expenditures. Recurrent non debt is about salaries of public officers and overheads. While this expenditure may impact of the welfare of public officers, their limited number limits the overall economic impact of this public expenditure. Recurrent debt expenditure is about debt service and money that goes to creditors, some of whom are foreign and paid in foreign currencies. It takes away rather than adding to the economy. On the other hand, capital expenditure especially developmental capital is what touches the lives of citizens in a massive way. The implication of the foregoing is that high level public officers including the President have failed, refused and neglected to implement the component of the budget that improves lives and livelihoods. The President made the first request and got a six-month extension, which from available facts, was not sufficient to finish the implementation of the 2024 capital budget. And he now has 12 months after the expiry of the financial year to implement the 2024 capital budget.
To worsen matters, the President did not tell Nigerians the truth in the 2025 budget presentation speech when in reporting on the implementation of the 2024 federal budget he stated: ”I am happy to inform this National Assembly that our administration attained remarkablemilestones in implementing the 2024 Budget. In 2024, we achieved: 14.55 trillion naira in revenue, meeting 75 percent of our target as of the third quarter, 21.60 trillion naira in expenditure, representing 85 percent of our target, also in the third quarter”. If it is true that 85 percent of expenditure had been made by the third quarter of 2024, why is it so difficult to implement the balance of 15 percent in the fourth quarter and thereafter, in the first six months of 2025, which warranted the extension to December 2025.
This development leads to another enquiry. The 2024 federal budget is the first full year budget of the administration. If the implementation of the part that impacts positively on citizens has been delayed, where did the administration get the facts for the claims it made during its second anniversary on touching lives and livelihoods? The facts and figures are not adding up.
Therefore, what NASS has done in the purported extension of the period for capital budget implementation is unconstitutional, illegal and ultra vires their powers.It is not a fit and good or best practice worthy of replication. It is a retrogressive step and a practice that should be discontinued. Common sense dictates that in preparing a budget for an incoming year, the parts of the extant budget that have not been implemented will form the opening project balance for the incoming year and combined with very important new projects to ensure continuity and effectiveness of expenditure.
Available information from MDAs indicate that little or no releases have been made for the implementation of the 2025 federal capital budget. This is already laying a solid foundation for 2025 capital votes to be implemented in 2026 and the fiscal aberration continues. Running two or three budgets concurrently is a very good plan for mismanagement of resources, project failure and lack of value for money. The federal government should draw a line and start on a clean slate in accordance with the law.