As we look forward to 2026, the year of implementation of new tax reforms, which is a major factor in revenue calculation, it is important that we look at the expenditure side and try some necessary reforms, too, to correct and coordinate the way we will spend the expected increase in revenue. Unless we feel there has been judicious use of the revenues collected in the past and present, the need to look at budget formulation and implementation is imperative.
A budget normally has two sides: the revenue and the expenditure. With its overbearing reforms, the government seems concerned about the revenue side without consideration for the expenditure. I can confirm from both observations and research outputs that the Nigerian government just draws and presents a budget as a ritual, implementation focuses on the revenue side, while the expenditure is based on items of convenience and personal satisfaction. That is why the usual preamble in proposed budgets up to the 1990s is absent today. The preamble would state budget performance in terms of revenue generation and what projects and programmes were implemented in the outgoing budget before highlighting what projects and programmes the proposed budget intends to achieve. Not so anymore. We are just informed of what is intended to be done.
No accountability because there was no transparency in spending. The budget discipline has gone, and that is why the government is unable to implement the 2025 budget on time, but is concentrating on implementing the 2024 budget in 2025. When will the 2025 budget be implemented? To rub insult to injury, the Federal Government requested the legislature’s approval of loans to meet the implementation of a budget that had not yet been implemented, and it was speedily granted, instead of telling the executive to convert and implement the 2025 budget as a 2026 fiscal appropriation. In the course of the year (2025), the President had praised the Federal Inland Revenue Service for meeting the required revenue in taxes. So, what delayed the implementation?
Even if the budget for 2026 is presented now, when will it be implemented? In fact, on which premise was it formulated? A new budget is formulated to address gaps identified in the current budget implementation. It looks clear that this government (executive in connivance with the legislature) takes us for granted, running an autocratic democracy.
The government must be concerned with growing unemployment among youths, and a budget can be implemented to address it. Instead of focusing reforms only on taxes or revenue reforms on expenditure reforms are equally important. Governor Chukwuma Soludo of Anambra State has reversed the trend of overbearing recurrent expenditure over capital expenditure in the State’s previous budgets, and this has gone a long way in job creation and reduction in employment, as well as increases in revenues due to the well-known multiplier effects of capital expenditure on growth and development. That is the kind of reform that is required in the federal budget. The Federal Government may need to learn from Anambra State. After all, the federal government, in the First Republic, borrowed money from the Western Region whose economy was properly run and profitable.
The President is known to take bold steps in matters of grave economic concerns like oil subsidy removal and harmonisation of exchange rates. He needs to show interest in the overbearing recurrent expenditure and recalcitrant unemployment rate; setting up a job creation or youth employment committee that will come up with reforms via budget processes or any other economic policies, with measures to address the growing youth unemployment. I know the government does not like to talk about the unemployment situation.
It has been quite some time since the National Bureau of Statistics released the results of unemployment because, based on its methodology, the last released statistics could be interpreted that Nigeria has full employment!
Apart from reforms on the ratio between recurrent and capital expenditure, another required reforms on the budget have to do with discipline in the formulation and implementation of a budget. There is a constitutional requirement for the presentation of the budget to the legislature and the time of authorisation of the budget for approval by the President. These are not being followed presently. I thank those States that are still following the constitutional requirements.
When Muhammadu Buhari took over from Goodluck Jonathan in 2015, there was such a delay in budgeting, particularly with the legislature delaying consideration and authorisation, but it did not take long before appropriate adjustments were made, and the ritual budget exercises started taking place as and when due. Albeit there was never a lackadaisical budget implementation, as we are witnessing today. The present situation allows for spurious spending and budget reporting.
There was this story that in the First Republic, Chief Obafemi Awolowo went to Sierra Leone with a team on a mission, and one of the members fell sick. He was hospitalised, which involved money for treatment. Members of the team had to contribute from their estacode because, according to the head of the team, there was no provision in the budget for such an incident. The allocation for incidental expenses was specific and could not be diverted without some authorisation. That is budget discipline. Today, there are many diversions of funds for spurious expenditure. How many of those numerous trips by the Presidency with jamboree crowds are in the budgets? Why have the budgets not been performing?
We often deceive ourselves that the youth must be job creators. The tertiary institutions, particularly the universities, must have compulsory courses on entrepreneurship as part of their curricula. If everybody is an entrepreneur, who will be the worker? Because the students are not taught how to be good workers, they get employed if they can present good applications and perform well at interviews, but mismanage time and resources at work, leading to low productivity we observe every day.
To be an entrepreneur, you need both knowledge and funds. Setting up a business in Nigeria today is quite expensive, starting from how to generate power, rent offices or workspace, acquire equipment, and other miscellaneous items. Funds are scarce these days, except for the children of politicians. The middle class, which is usually of help, is being squeezed out of existence by the high cost of living, and possibly taxes and levies.
The established regional commissions could centre or concentrate their activities on promoting agriculture and industrialisation in the regions to improve the regional employment of youths. There is a need for the commissions to have medium to long-term development Plans, developed from the grassroots or with the people, to enhance their support in the implementation. Many youths are embracing higher education but moving towards courses that will allow them to japa, not because they like it, but because they have seen millions of jobless graduates. Those who are not sure of being qualified for medicine are rushing to nursing or science laboratory technology, which are in high demand abroad. How long will we continue to train manpower for foreign countries and face shortages at home? The unemployment rate depicts a time bomb that should not be allowed to blow. Let us declare an emergency on unemployment.
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