After the finger-pointing, accusations and horse-trading, it seems Africa’s largest economy might be having a signed budget this Friday or latest over the weekend.
The budget approval process dragged over time because of a glaring gap between the executive and legislature. Bukola Saraki, the Senate president has also been facing corruption charges at the Code of Conduct Bureau, CCT.
While Saraki has blamed his trial as a political motivated move to punish him for contesting and winning the contest that made him the senate president. It is a material fact that the same imbroglio is a cog in the wheel of Nigeria’s budget approval and signing process. He has been accused of using the budget impasse as a payback for his trial at the CCT
President Buhari has refused to sign the budget after he received it from the senate in early April. His case were alleged series of discrepancies between the first draft and the passed version. According to sources from the presidency, key projects such as the Lagos-Calabar rail lines were expunged form the document an replaced with smaller and token projects.
Nigeria’s economy has been in the doldrums since the global crude oil price plummeted. The government revenue has tanked by over 70%. Most states in Nigeria are virtually broke owning months of salaries to their public workers.
On the economic side of things, the Nigerian business community are under the worst stress ever. The Nigeria Stock Exchange has fallen by more 16% since the global oil rally started. Many companies quoted on the exchange are declaring huge losses for the last quarter across key sectors of the economy.
The budget is the biggest in the country’s history, referred to as an ‘expansionary’ budget. Imbued with social welfare and infrastructural projects, the USD 32 billion budget is expected to be used as a litmus test of performance by the APC Party government.
President Buhari has refused calls from him to devalue the Naira. The country has been punished for its currency controls and lack of transparency of its currency pricing,. JP Morgan had delisted the country from its bond index. While Morgan Stanley Capital International has rescinded its decision to delist Nigerian bonds and equities from its MSCI emerging market index, the company will be selectively delisting equities that does not meet its criteria through a ‘special treatment‘.
Getting a budget signed will be a good thing for the markets. It will reduce the tension and suffering of Nigerians who are at the same time grappling with the worst petroleum scarcity in a long time.