The federal government’s decision to extend the 2023 budget implementation cycle from June 30 to December 31, 2024 has drawn mixed reactions from economic analysts. The extension was approved by both the Senate and House of Representatives
Commenting on the development, the head of Financial Institutions Ratings at Agusto & Co, Ayokunle Olubunmi noted that the move may see the government abandoning the 2024 projects to focus on the 2023 projects.
“This is not the first time the implementation period for the capital project component of an annual budget was extended. However, this is the first time that the implementation period has been extended until the end of a fiscal year.
“There are positives and negatives to this approval. On the positive note, the approval will provide enough time for projects highlighted in the budget to be executed instead of abandoning it and including it in another budget.
“However, this approval and relatively long extension period may be a disincentive to ensuring that the capital components of budgets are implemented on time. This approval may result in prioritising the 2023 budget at the expense of the capital component of the 2024 budget.
Economic experts say the extension of the 2023 budget means that it would run concurrently with the 2024 budget. They said the government may have decided to extend its implementation to be able to implement some line items that may not have been captured in the 2024 budget.
“It is not totally a bad idea. Maybe there are some projects in the 2023 budget that were not captured in the 2024 budget and they want to implement them at all cost,” said economic analyst, Sunday Adaji, adding that, “those projects may have been delayed by paucity of funds, rains or any other factor that made it impossible for them to implement the items.”
He said, the government must have extended the lifespan of the 2023 budget to still make it legal for them (government) to implement the specific items. The explanation is that if the budget life is not extended, it would mean that the authorities are spending without budgetary provision, a move that would imply that the government runs afoul of the law.
This is not the first time Nigeria is extending budget implementation. However, no budget has been extended to cover the budget cycle of another year.
The experts said, it may not have a negative impact on the economy and the January-December budget cycle.
With the budget cycle now extended, analysts will be closely watching to see how the government manages the overlapping fiscal years and ensures efficient utilisation of public funds.
Earlier, the Senate in Nigeria has decided to extend the implementation of the 2023 budget until December 31, 2024.
The 2023 supplementary budget will be implemented alongside the 2024 budget, which is worth N28.78 trillion.
This decision was made during an emergency plenary session, presided over by Senate President Senator Godswill Obot Akpabio.
The Senate Leader and Senator representing Ekiti Central Senatorial District, Michael Bamidele Opeyemi, sponsored the 2023 supplementary budget bill and requested the extension of its implementation.
Senate President Godswill Akpabio expressed his gratitude to the Senators for their understanding and patriotism.
He believes that this extended implementation period will enable the executive to complete all the unfinished projects.
