Ex-Lawmaker Warns of Fiscal Instability Amid Budget Overlaps

Former House of Representatives member for Etsako Federal Constituency of Edo State, Hon Johnson Oghuma, has expressed concern over fiscal management risks arising from the continued implementation of the 2024 budget into 2025.

He also lamented the delayed commencement of the 2025 budget despite its passage, and the enactment of the 2026 budget in December 2025.

In a statement submitted to the Federal Executive Council, Oghuma, also a public affairs commentator, warned that these developments could result in overlapping budget authorisations, particularly in 2026, with negative implications for fiscal discipline and economic management.

Oghuma stressed that the situation undermines the Medium-Term Expenditure Framework (MTEF), designed to provide a stable three-year fiscal anchor linking government policy objectives to realistic macroeconomic assumptions.

According to him, the credibility of the MTEF depends heavily on the timely commencement and orderly closure of annual budgets.

He argued that prolonged reliance on earlier budgets weakens policy effectiveness, as such budgets are based on macroeconomic assumptions that may no longer hold.

According to him, inflation trends, exchange rate movements, energy prices, and debt servicing costs often change significantly over time, making delayed implementation less responsive to current economic realities.

“Capital expenditure is one of the most affected areas. Projects approved under outdated cost assumptions are increasingly exposed to rising input prices, financing pressures, and contract variations.

“This leads to slow execution, extended completion timelines, and reduced developmental impact, ultimately weakening the growth and employment benefits expected from public investment.

“Overlapping budgets also complicate fiscal monitoring and debt management, as commitments from earlier budgets run concurrently with new appropriations.

“It becomes more difficult to accurately assess the government’s fiscal position, manage deficits, and align borrowing with medium-term targets, potentially increasing reliance on short-term financing.”

He recommended prioritising the timely commencement of each fiscal year’s budget, clearly closing or ring-fencing prior-year commitments, and aligning appropriations strictly with updated macro-fiscal assumptions.