For the first time in the history of the country, the budget is likely going to be read by someone other than the finance minister due to his inability to appear before the Appointments Committee of Parliament for health reasons: a situation former finance minister Seth Terkper says can impact the budget’s quality.
For people like the former finance minister, the relevance of this concern hinges on the fact that this is a budget meant to outline government’s strategy and policies to reverse damage the coronavirus pandemic has inflicted on the economy; hence, it is important to have a substantive finance minister execute it.
Even though the law allows the president to choose any representative other than the finance minister to present the budget on his behalf, Mr. Terpker says considering the role of a finance minister in the budget process, even after it is presented in Parliament, it is important to have him present.
“The budget has four components, some of which may require only the minister of finance or his deputy to address them. The first component is the budget speech, which is read in parliament. The second aspect is the budget statement, which is tabled in parliament. The third aspect is the economic policy; and the fourth is the appropriation bill.
“The third component is the referral of estimates to relevant standing committees of the House. Each committee comes back with a report to the House. When all these estimates come to the House, they are put together and referred to the finance committee.
“All these put together are transformed into the appropriation bill and Parliament passes it into law. So, the content of some of these things will require the Minister of Finance who has deeper knowledge of it than other ministers from different sectors,” Mr. Terkper said in an interview with the B&FT.
Secondly, Mr. Terkper adds, the finance minister-designate’s appearance at the vetting before the budget presentation would have clarified certain important issues which have become a matter of concern for many, as they border on revenue and expenditure issues.
“There are substantive issues coming out of the on-going vetting, and it would have been good for the finance minister to clarify at the vetting before the budget is read. If you look at the expenditure in advance for appropriation in 2021, there is no provision for energy arrears and a banking sector bailout.
“These are important, because if you look at the expenditure in advance of appropriation and you take it in conjunction with the mid-year review, we started with a deficit of 4.5 percent, then it went up to 11.5 in the mid-year review – without bailout cost. If you add bailout cost, it is 13.5 percent. The IMF says we could end the year [2020] at a deficit of more than 15 percent, which is consistent with the Moody’s report.
“But if you take the expenditure in advance of appropriation, which does not include adequate arrears and the rest, it is about 8 percent. So, it begs the question of whether the minister believes that with all the problems we are pointing out now, we can do a deficit reduction from 15 percent to 8 percent? That would have been the severest austerity that we have ever experienced. And this could have come up at the vetting for the minister to address the issue,” he said.
He further raised concern about the timing of the budget, saying it will give members of parliament a short time to deliberate and they are likely to rashly pass it.
“Now, my final concern is timing of the budget. If you read the budget on 12th March, you are giving government just two and half weeks to pass the budget, because the existing one ends at the end of March. Meanwhile, the process usually takes six weeks. So, it means the budget approval is going to be rushed; and that may not a good thing for us,” he added.
